Excerpt of further issues topics: Brand Equity and Brand Strategy, Brand Equity and Brand Diffusion, Brand Equity and Company Success, Brand Equity and Sales and Acquisition of Brands or Companies, Brand Equity and Marketing Investment

Brand Equity As An Important Component of Company Reputation

The relevance of a company’s reputation on corporate results is hardly disputed anymore nowadays. However, it is often overlooked that not only consumers and the public are forming an opinion on the current and future outlook of a business, but also financial experts such as banks, investors, analysts and the media.

Professional participants on money markets are faced with the challenge of assessing the uncertain future development of a business. In general, pure financial ratios are not enough to determine the reputation of a business on the capital market.

However, what defines reputation if it is not the pure financial ratios? The reputation of a business is based on a series of factors, whereas the brand is the most essential factor, even before the quality of management, industry development or corporate governance, just to name a few.

As significant as the role of the brand as psychological phenomenon might be in the heads of consumers, in the perception of analysts and investors, this does not replace the significance of the financial value. Professional money market participants expect a transparent disclosure of the company asset “brand” and a logical and conclusive analysis of this value.

There is a series of factors that determine the value of a brand. For instance the distinct positioning, the image, origin and the history play a role as important as being grounded on the market, the trademark protection and awareness.

Distinguishing for the value of the brand are a comprehensive market research, the willingness to invest in research and development, a harmonious marketing mix doing justice to the factors brand, product, distribution, service, communication and pricing, solid relationships shaped by trust and openness within the sourcing market, sales market, capital market and employment market and the social environment , the ability to wow customers and commit them to the brand, superior product properties, first-rate quality in all respects and many, many more.

For the future, it has to be a primary goal of a company to increase the most important company asset, the brand and not just to generate” turnover at any cost”. This is the core of every future-oriented corporate strategy. If a business can only sustain or increase turnover if it instigates price wars or participates in price wars instigated by others, then it is going to get into a cutthroat spiral. This destroys brand capital and thus the most important factor of the company reputation for years to come.