How Brand Equity Affects Shareholder Value
Brands and brand equity (brand value) affect all stakeholder groups, influencing the perceptions they have of the Branded Business, their preference or loyalty to that organisation and their behaviour. Consumers and customers buy more, for longer, at higher prices, while suppliers offer better terms of business and finance providers invest at lower cost. These and other stakeholder behaviours affect business value drivers to give higher revenues, lower costs and greater capital value.
Brand managers need to understand how these brand equity attributes impact on the branded business and need to develop marketing strategies to optimise brand switching behaviour.
This analysis needs to be conducted by product, geographic and demographic segment to maximise brand value. Such detailed metrics and financial analysis are beyond the scope of the current point in time brand valuations included in this year's league table. However, they are the next natural step in understanding and developing brand value.
Anecdotally they also explain why some brands are thriving while others are languishing.
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