Brand as a Multiplier

December 11, 2015

Brand Strategy Insider has redeemed itself!  After a recent post on intangible value that revealed a profound ignorance about how intangible value was calculated, BSI has returned to form with its latest post recounting a conversation with Denise Lee Yohn.  The post contains the related observations that:

  • Brand acts as a multiplier on the success of the business
  • The value of brand is contextual (and therefore volatile)

I could not agree more.  It has long been my belief that brands do not have an independent, objective value.  Their value derives from their business context and the degree to which they embody a set of functional and emotional attributes that appeal to a specific audience.  Their value is proportionate to their relevance and their distinctiveness.  Both of these dimensions are contextual (relevant to whom?  distinctive in relation to what?).

There are two basic disciplines in marketing:

  • Segmentation – defining the customers on whom you will focus
  • Value proposition – ensuring that you offer them compelling value

The power of a brand comes from successful alignment between the intrinsic reality of the underlying product/service and the functional and emotional preferences of the target audience.  The result is an offering with which customers self identify, and which enjoys a sales profile that is out of proportion to the intrinsic difference between the product and its closest competitor.  That is because the brand has magnified a difference of degree into a difference in kind.

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