Is Brand Value Really Valuable for a Company?
Google replaced Apple as the world’s most valuable brand in 2016, following five years of the iPhone maker holding onto this title, according to consultancy Brand Finance’s Global 500 rankings. Apple’s brand value plummeted 27% to $107.1 billion, while Google’s brand value rose to $109.5 billion. In the same year, Amazon’s brand value surged 53% to $106.4 billion, bringing the brand close to Apple.
Although America’s brands still dominate the global rankings, brands from other countries have gained significantly over the last few years. The list includes the following companies with these brand values:
- South Korea’s Samsung: $66.2 billion
- China’s ICBC bank: $47.8 billion
- Japan’s Toyota: 46.3 billion
- Germany’s BMW: $37.1 billion
- Netherlands’ Shell: $36.8 billion
- India’s Tata: $12.9 billion
- Mexico’s Pemex: $8.5 billion
Another ranking firm, BrandZ, places the brand value of China’s Tencent among the world’s top ten most valuable brands, according to an article by CNN. Tencent is the owner of the popular messaging platform, WeChat, while also providing several online games and apps as well as facilitating online payments.
Does Brand Value Boost Sales?
Consumers today are more demanding than ever. They make a purchase decision only after ensuring they’re maximizing their benefits from the transaction. Thanks to the information explosion on the Internet, consumers can easily access all the details they need about a company and its offerings before making a purchase decision. Then, where does “brand value” fit into the equation?
In reality, the fact that there’s so much information works against decision making. Some information may be useful and even critical, while there’s a huge amount of information that’s just “noise”. However, it’s difficult for consumers to distinguish between the two. Moreover, while consumers today have a lot of information at their disposal, they’re also pressed for time due to their busy lifestyles.
Consumers often use “mental shortcuts” to make their purchase decisions, explain brand experts at Inkwell. What this essentially means is that consumers rely heavily on familiarity with a brand to make a quicker decision. Thus, brand awareness and brand image play a critical role in purchase decisions and companies can increase their sales by investing in brand recognition and brand image.
Reaping Ongoing Benefits
Being pressed for time, consumers would avoid going through a decision-making process when making repeat purchases. They tend to stick to a brand, provided they are not dissatisfied with the product or service being offered. This means that investments in brand awareness not only results in sales, but can result in repeat sales due to brand loyalty.
The benefits of investing in brand building are not limited to growth in sales. Brand building plays an important role in employee retention. Many employees value the sense of pride or joy that they feel working for a particular company. This pride or joy can be enhanced by creating a strong brand. That’s not all. Brand building also helps to foster employee commitment towards certain goals that a company may be trying to achieve. This ensures that they are all working in the same direction to achieve the goals set by the company.