Problem set #5
1. The process of estimating total financial value of a brand is called brand valuation. There are three aspects that are involved in the assessment: the financial performance of the branded product or service, the role of the brand in the purchasing decision, and brand strength. The financial performance measure the return to the investors gained by the branded product or service. The role of the brand in the purchasing decision shows how brands influence buying decisions. By looking at the demand of a branded product or service and unbranded one, then comparing these two we can identify what is the role of a brand when customers make purchases. The brand strength determines whether a brand can deliver what customers expect and withstand a competition; it serves as a hallmark of brand’s ability to bring value to customers. When there is statement that Coca Cola brand is worth about $72 billion, it is meant that Coca Cola return to the investors, the economic profit, the role of Coke in purchase decision, and the consistency of Coca Cola’s delivery of expectancies is very high. In order to increase a brand value, a company should focus on consistently delivering expectancies, building its marketing around its brand to differentiate from others products, in a way to convince a customer that your branded product is much better than a same unbranded product.
2. Apple’s huge leap from 17th place to an impressive 8th place was due its victory of smart phone war. Apple has gained 23.8 % share of smart phone market by introducing and selling 37 million Iphones in 2011. Apple has been staying firm in a smart and luxury phones where as Nokia has decided to concentrate on developing market. Due to lack of attention on smart phones, Nokia is behind Apple and Samsung.