Companies invest a lot of resources, including time, talent and capital, in an effort to procure a positive status in the minds of potential customers. But how much value do companies really derive from cultivating brand names?
According to Aswath Damodaran, professor of finance at New York University’s Stern School of Business, a brand’s value is simply about the extent to which it can sell its goods and services at a premium price.
Damodaran presented on valuating brands at Friday’s L2 Innovation Forum. He noted that many marketers mistakenly attribute product quality, styling, service and reliability to a brand name’s value, when all brand value ultimately comes down to is pricing power.
“If you as a company tell me that you have a brand name, I’m going to ask you a question: ‘Do you have the power to charge a higher price for the same product?’” Damodaran said, “If your answer is no, I don’t think you have a brand. You may think you do, but I don’t think your brand has any value.” Read full story
Source: www.Mashable.com