Sorted Design Agency
what gives a brand value?
by johan

Look at this shoe:

brand value

What do you estimate its value should be?  To answer this question, we will need to see a breakdown of what it costs to produce a sneaker of this kind.  Luckily, Nike veteran Steve Bence has made this information available to us. Here is Mr. Bence’s general breakdown of the average sneaker produced by Nike1:

Per shoe:

  • $25.00 – Factory FOB cost
  • $1.00 – Sea freight and insurance
  • $2.50 – Duty

This adds up to $28,50.

Amazing isn’t it?  The physical value of that shoe is only 25 bucks.  This is for a sneaker of which the suggested retail price is $100.  But how much would you pay for it WITHOUT the Nike logo on it?  Personally, I guess, I’ll be happy to fork out about $50 or $60.  I will be taking a risk though, because, without the Nike logo on it, how do I know it’s not going to start disintegrating within the fist month. I might be wasting $60 because what do I know about the quality of the sneaker without testing it out. I’m quite sure the store is not going to let me test-drive/walk them…

With all that said, here are a few properties I think a brand adds to the value of a product:

  • Speed of decision

How much is your time worth?  If all items in a store were unbranded, what would your buying decision process be?  Will you test out all the available options?  How much of your valuable time will the “trial and error” method eat up? Add a logo to these products, and most of the decision work has been dealt with for you. You’ve heard of some of the features of this brand, you’ve experienced some of the benefits of that brand. Hell, it might even be a family tradition to use a certain brand for certain things because “grandma has always had one of these in her kitchen”… Most of the time, it’s the brand that takes away all the pain of having to make a bunch of decisions.

  • Trust

We all take risks once in a while. Risk can be a good thing. You’re either going to get some kind of amazing result from it, or learn something from it.  But say, for instance, you have to fly somewhere…do you want to get to your destination in one piece, or do you want to risk your life, or even the lives of your family?  In the case of airliners for example, the brand itself is an instant indication of how safe and comfortable your journey is going to be.  With something like risking your life, it’s less about perception and more about track record.

  • Leadership

Every business, company and brand has a management and leadership team. Some of these leaders can even reach a type of “rock-star” status and have a fan-base of their own that’s usually directly linked to the brand and business they are in charge of.  The expertise and vision of these people adds an extra level to their brands.  A consumer might associate with the philosophies of a certain celebrity entrepreneur and therefore prefer or even insist on the brand linked to that person. The personal connections and “relationships” we as the consumers develop with these leaders add an emotional element to a brand that can make one brand financially more valuable than the next.  Why else would the share value of a company go down when the leadership changes, even though the products won’t change much because of it?

  • History and success

Some brands have been around since before most of us were born.  A brand like Coca-Cola started more than 100 years ago and survived both World Wars and numerous economic recessions and depressions.  So how does this add to the value of the brand?  If you consider that between 80% and 90% of businesses fail within the first 18 months2, it must mean that a company that can survive that long must be doing something right.  That “something” must also translate into loads of benefits to the consumer and that “something” becomes part of what a brand means when we see and buy it.

  • Consistency

The brand of a company is not just the logo and products. It’s also how the people who are employed by the brand interact with the customers.  Yes, the logo is the identifier that lets the customer know from which brand the person is, but is the interaction with the person from the brand a positive one?  Does the customer or whoever gets into contact with the brand feel that they are better off, because of that interaction?  Is the brand message consistent with the products and behaviour of the people involved with the brand?  The more pleasant the experiences a brand can give their customers, the more perceived value it will achieve.

A consistent, pleasurable experience with a brand, their products and their people, builds loyal, regular customers that can describe themselves as “brand followers”.  This, is what I believe, helps to give a brand it’s own value.

  1. http://www.bizjournals.com
  2. http://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/

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Sorted Design Agency is a creative company that constantly looks for solutions to other people’s problems. These problems come mostly in visual format, such as graphic design, logo and illustration, but we’re experts in identity developmentwebsite design, and digital SEO campaigns as well.

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Based in Pretoria and Cape Town, Sorted has been in the design, advertising and content marketing industry since 2006. We assist your company with its corporate identity by communicating core values and facilitating audience growth.

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Sorted also owns two other businesses; InkFish Print Studio – a printing company that handles a range of promotional materials for businesses and other services for individual customers, and Pampiri + Kie – a gifts and stationery store selling online and in-store. Both of these companies operate from Cape Town and Pretoria.