In today’s marketplace a Brand is one of the very very few sustainable competitive advantages a company can own. Credit Suisse research shows an index of companies spending at least 2% of sales on branding and marketing have by 400 basis points a year since 1997. That’s a good investment on the part of smart management.
A strong brand accelerates outperformance.
It takes only three to five years for a strong brand to begin to according to Omar Saad, stock analyst at Credit Suisse. He went on to say in a CNBC interview that brands are underestimated in the marketplace.
“It’s most exciting to own a brand in its emerging stage—that’s when it’s still in its entrepreneurial, rapid-growth stage—but there’s a lot more risk associated with that level,” he said.
Saad identified the ‘transform and proliferate stage’ as the time when a company becomes skilled at leveraging its brand asset, simultaneously investing in the strength of the brand equity and leveraging it as a tool to cost efficiently enter new markets.
Brand equity works for industrials and financials.
We’re most familiar with consumer brands but very strong brands exist in financial, healthcare and industrial categories. In fact, the top brands in those categories are stronger than consumer brands on a relative basis in their category because there are fewer strong competing brands.
Goldman Sachs is a perfect example in the financials. Political figures, the media and the public are critical of Goldman Sachs today because of bonuses and deal structuring. However, despite those enormous negative forces, if you’re a company hoping to get a deal done, you want Goldman Sachs. And is there a more trusted resource in the oil and gas industry than Schlumberger?
Building brand equity.
These companies did not get their brand asset by accident or by default. They consciously built it. It takes And it starts at the top. And, it yields benefits for decades.
Tags: asset, brand, brand value, Branding, business strategy, competitive advantage, competitive marketplace, evaluating brand value, Marketing, marketing strategy