Looking out into the world today, it’s easy to see why brands are more important now than at any time in the past 100 years. Brands are psychology and science brought together as a promise mark as opposed to a trademark. Products have life cycles. Brands outlive products. Brands convey a uniform quality, credibility and experience. Brands are valuable. Many companies put the value of their brand on their balance sheet.
Why? Well you don’t have to look very far. When Tata Motors of India bought Jaguar and Range Rover from Ford, what did they buy? Factories? Raw Materials? Employees? No Goldman Sachs and Morgan Stanley helped Ford sell the brands to Tata for $2.56 billion, and the brands were worth more than all other ingredients combined.
Likewise, when Kraft bought Cadbury for $19.5 Billion what did they buy? The chocolate? The factories? The recipes? The candy makers? No they bought the brands.
And when Four Seasons Hotels, Inc., a Canadian-based international luxury, five-star hotel management company, sold itself to Bill Gates and and Prince Al-Waleed bin Talal of Saudi Arabia for $3.8 billion what did they buy? Locations? Restaurants? Staff? Beach front property? No they bought the brand. The list goes on with many examples such as Geeley Motors of China acquiring cult Swedish Auto brand Volvo.
Branding is fundamental. Branding is basic. Branding is essential. Building brands builds incredible value for companies and corporations.
If you are still not convinced, let me give you another example. The dollar is a world brand. In essence it is simply a piece of paper. But branding has made it valuable. All the tools of marketing and brand building have been used to create its value. On the front you will find the owner of the brand: the Federal Reserve.
I mentioned earlier that brands are more important today than in the past. There are a few reasons for this. Firstly, the world has come online and there are many new markets and a growing middle class in places like India, China, Brazil, Russia, South Africa, Nigeria, Indonesia and in many more places. These consumers buy brands. They buy premium brands. The best branding today is based on a strong idea. The best brands have remarkable creativity in advertising to help them break through people’s wall of indifference to create brand heat and product lust. Case in point the recent turn around of Chrysler and it’s reliance on marketing and advertising. Or look at the reinvention of Levis. And a final example is this campaign by my own agency which has helped reenergize one of America’s great iconic brands Jim Beam.
Secondly, when we create new brands at my New York City advertising agency StrawberryFrog, we have fewer brand names to choose from. The Pharmaceutical Industry has patented everything under the sun for new medications. This makes existing brands, with their strong, well-known names and credibility more valuable. It also means creating a new vibrant brand is a challenge which requires a sophisticated strategy. It is not just about a product and a name, it’s about a lot more.