Research Paper. Sergii Nedoboi

Sergii Nedoboi

Yaroslava Fedoriv

Course of Academic Writing, A-14

10.04.2013

Brand Value

Branding expert indicates that “when we brand things, our brains perceive them as more special and more valuable than they actually are” (Lindstrom 54). Business in many countries around the world has changed in terms of important components and in level of competition in technology and pricing during the last couple of decades. Small enterprises and large corporations are making a transition to compete at the level of brand. According to such basic changes, brand has become one of the main components of a successful business for many companies, both international and local. Nowadays, brand has transformed from a standard attribute into an intangible asset which is valuable for business. From business point of view an interest to a brand value as to an intangible asset is in its market price and in return of investments in its development. This research work will examine the prices of 10 most expensive brands in the world, 10 most expensive brands in Ukrainian market, and the decision of importance of investing in brand development will be summarized. 

BRAND TYPES

Lynn Upshaw, an expert in the field of marketing, distinguishes such brand types (Upshaw 86): product brand, service brand, organizational brand, event brand, personal brand, and geographical brand. The first type clearly prevails in number over the other types of brand and usually consumers recall it first (example: Nestle). The second feature identifies an intangible service, which is much harder to present in an attractive way because it is impossible to touch it or to see it (FedEx). The third form is a brand of corporation, non-profit organization, political party, educational institutions (IPRA). Occasionally going sports, entertainment or art events are the next group (Olympic Games). The fifth form is a brand of celebrity which extends much further than the scope of their activity (Michael Jordan). The last but not least is a brand of a city, country, and resort (Cannes). There are many different approaches to classify brands. Moreover, a consumption society is growing and this growth demands new ideas in branding.

IMPORTANCE OF BRAND INVESTING

The question of investing or not investing in brand is urgent during the last few years. Financial costs are reduced in each and every company in times of crisis. Firms shortcut their stuff, cut production, and close their branch offices to reduce costs and to stay alive. So, the importance of investing in a brand for a company is discussed since the term “brand” was firstly used, but nowadays this topic is especially hot. 

One reason is that brand investment is important for successful business. A company creates an intangible long-run asset. This asset can help a firm to stay on market for a long time and produce an extra profit. An easily recognizable brand can give a company an extra credit while IPO is executed, when franchise branches are widening, and when a company is sold to another owner. The other reason to invest in brand is that positive image of company helps to sell products. A growth of a firm will lead to widening of a product range and highly-appreciated image of the whole company will help to start selling new goods easily (Kotler 159). A well-known logo, pleasant emotions connected with brand, and goodwill are those intangible parts of successful business which can get a company on a new level.

On the other hand, there is a position that investment in quality of goods is more important than investment in brand. Modern laboratories and highly educated stuff will produce products and services of better quality. However, people choose goods by famous brand more often than by quality of a product. Everyone wants to be in fashion trend and usually spend money to buy goods of a famous brand but lower quality of a product itself.  It should be admitted that a new high quality product does not need much of an advertisement.  Still, a modern company cannot sell any product without explanation of its advantages and building a strong positive image of its brand even when it is a multi-level marketing sales approach.

Therefore, a modern company should invest in its brand to build profitable business. Moreover, a firm should invest in marketing research and in public relations to build strong long-term relationship with its customers which will help a company to achieve a financial well-being.    

BRANDING CHANGES ON GLOBAL MARKETS

Robert Jones, a practitioner at the brand consultancy Wolff Olins, sees many signs that branding is changing (Jones). Many things also remain the same, and practitioners tend to over-emphasize change, in the interests of keeping what they do exciting and urgent. Nevertheless, there are big tectonic shifts, which the theory of branding is struggling to keep up with. These shifts are happening in many ways, in many places, in many sectors – and at different speeds, and to varying depths. But there are five things happening with the potential to be revolutionary.

From persuasion to platform. The first substantial shift that is observed is the result of the changing consumer. As consumers become better informed, more ethical, more skeptical, they are less ready to be persuaded by brands to buy things, and are much more interested in using brands to do things. Brands act much less as persuaders, much more as platforms.

From positioning to purpose. Practitioners all over the world find themselves talking much less about positioning and much more about purpose. The idea is now commonplace that the best way to achieve profit is to have a purpose beyond profit.

From consistency to experimentation. Third, and this is the most visible change, brands are less obsessed with consistency. These days, brands are much more relaxed about varying their visual. Companies are looking not for a monotone, but a theme with variations; not a slogan, but a story; not a message, but a pattern; not a set formula, but constant experimentation. Brands increasingly see themselves as continuously changing things, co-created with users.

From control to liberation. Fourth, many companies are less concerned now to use their brands as a means of control inside their organizations, but more as a means of liberation. They no longer think of brands as a mindset or ideology, but more as a starting point for individual initiative and innovation of people.

From ownership to boundless. Finally, brands are becoming more relaxed about ownership. Today, as organizations are forced to collaborate more, brands are being shared. They serve less to divide organizations apart, more to multiply them together. Brands today live in the boundary less world of social media. Brands are described as the intellectual, social and cultural medium connecting inside and outside of an organization.

           

GLOBAL BRAND MARKET

Global companies are following the trend of changes in branding. There are different approaches to shortlist the best brands in the world, but the most popular is Interbrand rating. Interbrand is an international company, which provides the data analysis of global trends in marketing, management, and branding. The company summarizes data each year to help entrepreneurs and managers of corporations to be informed about market changes. The following table shows top ten of the most famous and expensive brands of 2012. All of these companies have become so famous not only because of goods and services they produce, but also they invested in gradual development of their unique design, logo, and other features of brand.      

Brand Name	Price $ mln
Coca-Cola	77 839
Apple	76 568
IBM	75 532
Google	69 726
Microsoft	57 853
General Electric	43 682
McDonald’s	40 062
Intel	39 385
Samsung	32 893
Toyota	30 280

Table 1. Top ten most expensive brands in the world (Interbrand).

BRAND MARKET IN UKRAINE

On the other hand, Ukrainian branding market is quite young and began to develop at the very end of twentieth century (Kiselev). There were created really strong and successful brands during that time, famous not only in domestic but also in overseas markets. Among the successful Ukrainian brands are such companies as “Kyivstar”, “Roshen”, “Nemiroff” and many others. All of these companies have been using different technologies and techniques to achieve higher success, but all of them were consistent in their branding and promotion strategy.

Brand Name	Price, $ mln
Nemiroff	510
Obolon	371
Morshinska	287
Kyivstar	263
Sandora	203
Chernigivske	199
Torchin	190
Life J	185
Roshen	179
Nasha Ryaba	155

Ukrainian brands are able not only to form the domestic market, but also release goods to foreign markets. Creation and developing of the brand is a complex but manageable process that allows to turn the brand into a powerful marketing tool that provides an extra profit. The companies, which are already actively developing branding, provide a guarantee of the stability of the business and its successful development.

Table 2. Top ten most expensive Ukrainian brands (Consulting).  

Branding in Ukraine is actively developing in different segments. However, such spheres of market as automotive, pharmaceutical, household appliances, cosmetics are still almost entirely controlled by foreign brands. Branding opportunities in banking and in insurance are used insufficiently.

In the table of top ten most expensive brands of Ukraine 8 of 10 brands are presenting companies, which are specialized on nutritive products: food and beverages. The other two brands are companies of telecommunication. This statistics shows, that in other fields of Ukrainian market, there are a lot of opportunities to build a strong brand. Such fields as agriculture, energy sector, and micro technologies have the best potential of development. 

CONCLUSION

From examining different opinions on global changes in branding, the conclusion of importance of stable investing in brand development even in crisis times can be made. However, companies should not omit the quality of their goods and service. It should be a balanced long-term strategy of financial allocation.

            There are five global trends in branding changes, such as: from persuasion to platform,

from positioning to purpose, from consistency to experimentation, from control to liberation,

from ownership to boundless. The top ten most expensive brands in the world table shows, that food and beverages sector and segment of micro technologies and on-line resources are the most valuable.

Ukrainian market is young and developing. The most expensive brand “Nemiroff” ($510 mln) is 153 times cheaper than the most valuable global brand “Coca-Cola” ($77 839 mln). This statistics shows that Ukrainian market has got potential to develop a well-known product with strong brand. And once again this price gap indicates the importance of investing in brand.

Works Cited

Consulting, MPP. “UkrBrand 2012. Top 100 Ukrainian Brands.” UkrBrand (2012). Web 2013.

Interbrand. “Best Global Brands 2012. The Top 100 Brands.” Interbrand (2013). Web 2013.

Jones, Robert.  “Five ways branding is changing.” Journal of Brand Management 20 (2012): 77–79. Web 21 Sep. 2012.

Kiselev, Igor. “Features of the development of branding in Ukraine.” B2B Lab (2013). Web 20 Jan. 2013.

Kotler, Philip. A Framework for Marketing Management (Second edition). New Jersey: Prentice Hall, 2006. Print. 

Lindstrom, Martin. Buy Ology: Truth and Lies about Why We Buy. New York: Doubleday, 2008. Print.

Upshaw, Lynn. Building Brand Identity: The Strategy for Success in a Hostile Environment. New York: John Wiley & Sons, 2010. Print.