Table of Contents
- Meaning of brand power
- 6 Important Characteristics of Power Brands
- 1. Brands determine the market value of a business corporation
- 2. Brands familiarity and esteem underlie power brands
- 3. Power brands transform the value of product to the higher end
- 4. Power brands are the basis of consumer relationship
- 5. Power brands have value differentiation
- 6. Power brands attract consumers and secure purchases
Meaning of brand power
Power brands are key drivers of economic values of a corporation. Brand power transforms a plain product into an economic entity worth many times more than its content. The essence of power brand lies in transforming the value of product to the higher end that is unleashing a branding wave. Power brands determine the market value of a business proposition.
For example, the market value of HUL is disproportionately higher than its assets. It is the value of brands in all the categories which has the capacity to generate value for the company. In some cases such as amazon.com, Yahoo, etc., have nearly zero tangible assets base. But their brands are most valuable assets for them.
6 Important Characteristics of Power Brands
The following are some of the important characteristics of power brands.
1. Brands determine the market value of a business corporation
A company’s worth is not dictated by its conventional assets. Powerful brand in categories a company operates have unparalleled capacity to generate value for the company. Strong brands generate attractive returns to the shareholders above the industry average. But weaker brands lag behind the industry average. At present several most valuable brands have a tiny tangible assets base.
2. Brands familiarity and esteem underlie power brands
Power brands are viewed as intangible assets that create revenue stream. Brands like Coca Cola, Microsoft, and IBM are some of the world’s most valuable brands. Brand familiarity and esteem add strength to brands.
3. Power brands transform the value of product to the higher end
Power brands are admired for their qualities. Awareness, perception and acceptance of the brand and bonding with the brand contribute exceptionally to the strength of brands. Top most brands transform the value of product to the higher end.
4. Power brands are the basis of consumer relationship
Powerful brands bring consumers and marketers closer and bind them together. This may allow a marketer to leverage a brand into new product categories. The product can be copied. But a brand in its totality can never be replicated. It exists in perceptual space and is a perceptual entity.
5. Power brands have value differentiation
The distinction between marketing and manufacturing is more pronounced. Manufacturing is not where much value differentiation takes place. Only marketing is responsible for value differentiation. Marketing competency lies in building brands. Power brands are better positioned to understand consumer problems and develop viable solutions.
6. Power brands attract consumers and secure purchases
Factories play an insignificant role in adding value to products. Generic products coming out of factories fail at securing a purchase. Power brands add value to products in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing etc. Brands offer great scope in this transformation. They are capable of attracting consumers and securing their purchases.