Brand Value chain

Multipliers

1. Program Quality

Program Quality is the first multiplier in the Brand Value Chain. The ability of the marketing program investment to transfer or multiply further down the chain will depend on qualitative aspects of the marketing program via the program quality multiplier. There are four attributes that define the quality of a marketing program.

  • The first is clarity. How well will consumers understand the message send by the firms’ marketing investment? The clarity of a brand refers to the absence of a double meaning in the information transferred by the brand’s past and present marketing mix strategies and affiliated activities .
  • Second is relevance. Will consumers find the brand to be more useful than others in their search for a particular product?
  • Third is uniqueness. How diverse is the marketing program compared to competitors?
  • Fourth is consistency in the marketing program. How well does the marketing program follow the direction of previous programs? Do all the elements within the program work together to create the largest value with the customers?

2. Marketplace Conditions

The second multiplier presented in the model is Market Place Conditions and influences the effect of the second stage (customer mindset) on the third stage (brand performance). The capability of the customer mindset to create value in the third stage depends on different market factors that do not reside with the customer. Three factors are distinguished, such as competitive superiority, channel support, and customer size and profile. Superiority is distinguished because it is important how a companies marketing investment is compared to their competitors’ in terms of quality and quantity. A strong competitive superiority of a marketing investment strengthens the effect of the customer mindset on brand performance. The brand value created in the customers minds is followed by strong brand performance when competitors have no significant marketing program to compete with, when the channel gives potent support, and when a vast number of consumers is attracted to the brand.

3. Investor Sentiment

It depends on investor sentiment how much of the value from stage three, brand performance, translates to stage four, shareholder value. Financial analysts and investors find a number of external factors important in their brand valuations and investment decisions. Four factors are distinguished; dynamics of the financial market as a whole, growth potential, risk profile, and brand contribution . Dynamics of the financial market are e.g. interest and investors sentiment. The third factor, risk profile, stands for the amount of risk the brand experience in certain situations. How vulnerable is the brand to social and economic developments? Fourth, how large is the impact the brand has on the firms’ portfolio . The value created in previous stages of the Brand Value Chain is most likely to be transformed to shareholder value when the company is functioning in a healthy and growing market without real environmental barriers, when the brand contributes a significant part of the firm’s sales, and appears to have a promising future.

Brand Value chain

3 thoughts on “Brand Value chain

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