WHAT IS A BRAND ?

Brand

What is a Brand?

• According to American Marketing Association, “Brand” means a name, term, sign, symbol or design or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors, e.g. "Intel Inside" is a popular brand, used by Intel Corporation for PCs containing Intel chips. Other Examples include Disney, Pepsi, Coca-Cola, Microsoft, Apple iPhone, Sony, Samsung, Google, and Facebook etc.

• “A brand is an identifying symbol, mark, logo, name, word or sentence that companies use to distinguish their product from others. A combination of one or more of those elements can be utilized to create a brand identity. Legal protection given to a brand name is called a trademark.”

• “Brand is the idea or image of a specific product or service that consumers connect with, by identifying the name, logo, slogan, or design of the company that owns the idea or image.” The brand can be acquired from the outside or can be developed internally within the enterprise.

What is a Branding and its Objectives?

Branding refers to the act of creating, developing, and maintaining a brand. In the modern business world, branding has become very important due to heavy competition. The objective of branding is as follows:

1.    It helps in creating an identity for the enterprise and its products in the market, and distinguishes them from rival enterprises and products in the market.

2.    Strong brands combine with quality products results in customer loyalty, giving an edge over the competition, and the customer can enjoy a “brand premium” in its pricing decision.

3.    Using a particular brand gives an advantage of status fulfillment to customers.

4.    Brands are important tools to enterprises to achieve market segmentation and employ different segments.

5.    Its enables the adoption of Total Quality Management (TQM).

Importance of Brand

1.    Brand creates trust

2.    Brand supports advertisement

3.    Brand improves recognition

4.    Brand builds financial value

5.    Branding inspires employees and

6.    Brand generates new customers.

 

Types of Brand

There are some of the most common types of brands are-

1.    Product Brand

Product Brands are associated with tangible products such as cars, household goods, or lifestyle products. This can either be a specific individual product or cover a range of products. Individual Products like Coca-Cola or Pepsi. Product Range like Car Brands.

2.    Service Brand

Service Brands is just that a brand that is defined by the service that it provides. Service brands need to develop and maintain a strong positive image and customer interactions. Service is all about the relationship between you and your customer or service user. Service brands – like Ola, Oyo, Uber, and AirBnb etc.

3.    Corporate Brand

Corporate Brands reputation plays a massive role in the success of a business. Everything a company does the products it sells, target audience, how it treats suppliers and employees, and even its name affects reputation. It can also impact your pricing strategy. A good example of corporate branding is the automobile industry.

4.    Retail Brand

Retail brands are the stores we all engage in our day-to-day lives. Many retailers sell products from many different manufacturers. In a supermarket, find similar products from competing brands side by side on the shelf. The store's aesthetic design reflects the importance of good design for the company’s products. 

Retail branding is complex because stores have layered objectives. For example - Apple Stores, Big Bazar Stores, Reliance Stores, and Amazon Bookstore in Seattle.

5.    Personal Brand

Personal brands are often associated with public figures such as politicians, athletes, movie stars, successful entrepreneurs, and social media influencers. Celebrities are the most common examples of personal brands people like - Apple founder Steve Jobs, Tesla CEO and SpaceX founder Elon Musk, and Facebook CEO and founder Mark Zuckerberg.

The entrepreneur Richard Branson is a good example of a personal brand that has spent a lot of effort creating a recognizable personal brand fun, adventurous, disruptive, philanthropic – which is well known globally. His branding has rubbed off on some of his companies, which are all under the Virgin brand.

6.    Global Brand

Global Brands are widely marketed and recognized worldwide. For Example - Google, Microsoft, Apple, Amazon, McDonalds, and Disney, etc.

7.    E-Commerce Brand

E-Commerce Brands or Online Marketing Bands are existed in the virtual world and have a presence over the web. They provide products or services depending on their categories and available products. For Example – Amazon, Flipkart, JioMart, Alibaba, etc.

8.    Luxury Brand

Luxury Brands are through quality, association, and storytelling, prestige brands example like - Louis Vuitton, TIffany, Balenciaga, and Cartier, deliver social status and endorsement.

9.    Event Brands

Event Brands is typically strongly connected with the experience the attendees gain from being at the event and creating long-term consumer loyalty. For Example - Sporting events like the Olympics, ICC World Cup, Indian Premier League (IPL), etc.

10. Geographical Brands

Geographical Brands are countries, cities, streets, and buildings such as landmarks that have distinct key qualities that can be seen as identifications of a brand. Cities, regions, and entire countries practice geographic branding by capitalizing on the things that set them apart from other areas, such as tourist attractions or areas of natural beauty. 

For Example - The Eiffel Tower. It’s a French national icon. Numerous businesses use the image of the Eiffel Tower to identify themselves as Parisian.

Creating of Brand

• When a company decides to settle on a brand to be its public image, it must first determine its brand identity, or how it wants to be viewed. For example, a company logo often incorporates the message, slogan, or product that the company offers. The goal is to make the brand memorable and appealing to the consumer. The company usually consults a design firm or design team to come up with ideas for the visual aspects of a brand, such as a logo or a symbol.

• Once a brand has created positive sentiment among its target audience, the firm is said to have built brand equity. Some examples of firms with brand equity possessing very recognizable brands of products — are Microsoft, Coca-Cola, Ferrari, Apple, and Facebook.

• A Brand results in an increase in sales for not just the specific product being sold, but also for other products sold by the same company. A good brand engenders trust in the consumer, and, after having a good experience with one product, the consumer is more likely to try another product related to the same brand. This phenomenon is often referred to as brand loyalty.

 

Accounting of Brand

Brand Accounting refers to the identification, valuation, and reporting of brands of enterprise in its financial statements. The main objective of brand accounting is to enable a correct assessment of the real value of an enterprise and its correct profitability by both the management and the outsiders through recognition of brand assets.

Valuation of Brand

Valuation of Acquired Brand

• When a band is purchased from outside separately, it is valued at the price paid.

• When a brand is purchased as a part of the acquisition of a business, then the excess of purchase consideration over the Net assets taken over is considered as representing goodwill, which includes various factors such as brands, advantage of location, the advantage of cheap raw material availability, etc.

Valuation of Self-Generated Brand

There are the various models for the valuation of self-generated brands. They are as follows:

1.    Historical Cost Model

2.    Potential Earning Model

3.    Market Oriented Approach

4.    Market Price Model

5.    Replacement Cost Model

6.    Current Cost Model

7.    Present Value Model

8.    Sensitivity Model

9.    Life Cycle Model

10. Incremental Model

11. Super Profits Model

12. Whole Organisation Model

Advantages of Brand Accounting & Valuation

1.    Makes the enterprise’s Balance Sheet transparent.

2.    Serves as a basis for fixing compensation for key executives.

3.    Helps to make better decisions in acquiring an enterprise as a whole along with branded employees.

4.    Makes valuation is easier as the products, services, etc. which contribute to the brand are distinguished from the employees who contribute to the brand.

 

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