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5 minute read

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BACK TO BASICS COMPILATION

Institutions that match up savers and borrowers help ensure that economies function smoothly

YOU'VE got $1,000 you don't need for, say, a year and want to earn income from the money until then. Or you want to buy a house and need to borrow $100,000 and pay it back over 30 years.

It would be difficult, if not impossible, for someone acting alone to find either a potential borrower who needs exactly $1,000 for a year or a lender who can spare $100,000 for 30.

That's where banks come in.

Although banks do many things, their primary role is to take in funds-called deposits-from those with money, pool them, and lend them to those who need funds. Banks are intermediaries between depositors (who lend money to the bank) and borrowers (to whom the bank lends money). The amount banks pay for deposits and the income they receive on their loans are both called interest.

Depositors can be individuals and households, financial and nonfinancial firms, or national and local governments. Borrowers are, well, the same. Deposits can be available on demand (a checking account, for example) or with some restrictions (such as savings and time deposits).

Making loans

While at any given moment some depositors need their money, most do not. That enables banks to use shorter-term deposits to make longer-term loans. The process involves maturity transformation -converting short-term liabilities (deposits) to long-term assets (loans). Banks pay depositors less than they receive from borrowers, and that difference accounts for the bulk of banks' income in most countries.

Banks can complement traditional deposits as a source of funding by directly borrowing in the money and capital markets. They can issue securities such as commercial paper or bonds; or they can temporarily lend securities they already own to other institutions for cash-a transaction often called a repurchase agreement (repo). Banks can also package the loans they have on their books into a security and sell this to the market (a process called liquidity transformation and securitization) to obtain funds they can relend.

A bank's most important role may be matching up creditors and borrowers, but banks are also essential to the domestic and international payments system-and they create money.

Not only do individuals, businesses, and governments need somewhere to deposit and borrow money, they need to move funds around-for example, from buyers to sellers or employers to employees or taxpayers to governments. Here too banks play a central role. They process payments, from the tiniest of personal checks to large-value electronic payments between banks. The payments system is a complex network of local, national, and international banks and often involves government central banks and private clearing facilities that match up what banks owe each other. In many cases payments are processed nearly instantaneously. The payments system also includes credit and debit cards. A well-operating payments system is a prerequisite for an efficiently performing economy, and breakdowns in the payments system are likely to disrupt trade-and, therefore, economic growth-significantly.

Creating money

Banks also create money. They do this because they must hold on reserve, and not lend out, some portion of their deposits-either in cash or in securities that can be quickly converted to cash. The amount of those reserves depends both on the bank's assessment of its depositors' need for cash and on the requirements of bank regulators, typically the central bank-a government institution that is at the center of a country's monetary and banking system. Banks keep those required reserves on deposit with central banks, such as the U.S. Federal Reserve, the Bank of Japan, and the European Central Bank. Banks create money when they lend the rest of the money depositors give them. This money can be used to purchase goods and services and can find its way back into the banking system as a deposit in another bank, which then can lend a fraction of it. The process of relending can repeat itself a number of times in a phenomenon called the multiplier effect. The size of the multiplier-the amount of money created from an initial deposit-depends on the amount of money banks must keep on reserve.

Banks also lend and recycle excess money within the financial system and create, distribute, and trade securities.

Banks have several ways of making money besides pocketing the difference (or spread) between the interest they pay on deposits and borrowed money and the interest they collect from borrowers or securities they hold. They can earn money from:

income from securities they trade; and

fees for customer services, such as checking accounts, financial and investment banking, loan servicing, and the origination, distribution, and sale of other financial products, such as insurance and mutual funds.

Banks earn on average between 1 and 2 percent of their assets (loans and securities). This is commonly referred to as a bank's return on assets.

Transmitting monetary policy

Banks also play a central role in the transmission of monetary policy, one of the government's most important tools for achieving economic growth without inflation. The central bank controls the money supply at the national level, while banks facilitate the flow of money in the markets within which they operate. At the national level, central banks can shrink or expand the money supply by raising or lowering banks' reserve requirements and by buying and selling securities on the open market with banks as key counterparties in the transactions. Banks can shrink the money supply by putting away more deposits as reserves at the central bank or by increasing their holdings of other forms of liquid assets-those that can be easily converted to cash with little impact on their price. A sharp increase in bank reserves or liquid assets-for any reason-can lead to a "credit crunch" by reducing the amount of money banks have to lend, which can lead to higher borrowing costs as customers pay more for scarcer bank funds. A credit crunch can hurt economic growth.

Banks can fail, just like other firms. But their failure can have broader ramifications-hurting customers, other banks, the community, and the market as a whole. Customer deposits can be frozen, loan relationships can break down, and lines of credit that businesses draw on to make payrolls or pay suppliers may not be renewed. In addition, one bank failure can lead to other bank failures.

Banks' vulnerabilities arise primarily from three sources:

a high proportion of short-term funding such as checking accounts and repos to total deposits. Most deposits are used to finance longer-term loans, which are hard to convert into cash quickly;

a low ratio of cash to assets; and

a low ratio of capital (assets minus liabilities) to assets.

Depositors and other creditors can demand payment on checking accounts and repos almost immediately. When a bank is perceived-rightly or wrongly-to have problems, customers, fearing that they could lose their deposits, may withdraw their funds so fast that the small portion of liquid assets a bank holds becomes quickly exhausted. During such a "run on deposits" a bank may have to sell other longer-term and less liquid assets, often at a loss, to meet the withdrawal demands. If losses are sufficiently large, they may exceed the capital a bank maintains and drive it into insolvency.

Essentially, banking is about confidence or trust-the belief that the bank has the money to honor its obligations. Any crack in that confidence can trigger a run and potentially a bank failure, even bringing down solvent institutions. Many countries insure deposits in case of bank failure, and the recent crisis showed that banks' greater use of market sources of funding has made them more vulnerable to runs driven by investor sentiment than to depositor runs.

The need for regulation

Bank safety and soundness are a major public policy concern, and government policies have been designed to limit bank failures and the panic they can ignite. In most countries, banks need a charter to carry out banking activities and to be eligible for government backstop facilities-such as emergency loans from the central bank and explicit guarantees to insure bank deposits up to a certain amount. Banks are regulated by the laws of their home country and are typically subject to regular supervision. If banks are active abroad, they may also be regulated by the host country. Regulators have broad powers to intervene in troubled banks to minimize disruptions.

Regulations are generally designed to limit banks' exposures to credit, market, and liquidity risks and to overall solvency risk. Banks are now required to hold more and higher-quality equity-for example, in the form of retained earnings and paid-in capital-to buffer losses than they were before the financial crisis. Large global banks must hold even more capital to account for the potential impact of their failure on the stability of the global financial system (also known as systemic risk). Regulations also stipulate minimum levels of liquid assets for banks and prescribe stable, longer-term funding sources.

Regulators are reviewing the growing importance of institutions that provide bank-like functions but that are not regulated in the same fashion as banks-so-called shadow banks-and looking at options for regulating them. The recent financial crisis exposed the systemic importance of these institutions, which include finance companies, investment banks, and money market mutual funds.

Jeanne Gobat is a Senior Economist in the IMF's Monetary and Capital Markets Department.

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Institutions that match up savers and borrowers help ensure that economies function smoothly

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What Is Marketing?

Marketing refers to activities a company undertakes to promote the buying or selling of a product or service. Marketing includes advertising, selling, and delivering products to consumers or other businesses. Some marketing is done by affiliates on behalf of a company.

Professionals who work in a corporation's marketing and promotion departments seek to get the attention of key potential audiences through advertising. Promotions are targeted to certain audiences and may involve celebrity endorsements, catchy phrases or slogans, memorable packaging or graphic designs, and overall media exposure.

Key Takeaways

What Is the Goal of Marketing?

Marketing as a discipline involves all the actions a company undertakes to draw in customers and maintain relationships with them. Networking with potential or past clients is part of the work too and may include writing thank you emails, playing golf with prospective clients, returning calls and emails quickly, and meeting with clients for coffee or a meal.

At its most basic level, marketing seeks to match a company's products and services to customers who want access to those products. Matching products to customers ultimately ensures profitability.

Formal Definition:

What Are the 4 P's of Marketing?

Product, price, place, and promotion are the Four Ps of marketing. The Four Ps collectively make up the essential mix a company needs to market a product or service. Neil Borden popularized the idea of the marketing mix and the concept of the Four Ps in the 1950s.

Product refers to an item or items the business plans to offer to customers. The product should seek to fulfill an absence in the market, or fulfill consumer demand for a greater amount of a product already available. Before they can prepare an appropriate campaign, marketers need to understand what product is being sold, how it stands out from its competitors, whether the product can also be paired with a secondary product or product line, and whether there are substitute products in the market.

Price refers to how much the company will sell the product for. When establishing a price, companies must consider the unit cost price, marketing costs, and distribution expenses. Companies must also consider the price of competing products in the marketplace and whether their proposed price point is sufficient to represent a reasonable alternative for consumers.

Place refers to the distribution of the product. Key considerations include whether the company will sell the product through a physical storefront, online, or through both distribution channels. When it's sold in a storefront, what kind of physical product placement does it get? When it's sold online, what kind of digital product placement does it get?

Promotion, the fourth P, is the integrated marketing communications campaign. Promotion includes a variety of activities such as advertising, selling, sales promotions, public relations, direct marketing, sponsorship, and guerrilla marketing.

Promotions vary depending on what stage of the product life cycle the product is in. Marketers understand that consumers associate a product's price and distribution with its quality, and they take this into account when devising the overall marketing strategy.

Types of Marketing Strategies

Marketing is comprised of an incredibly broad and diverse set of strategies. The industry continues to evolve, and the strategies below may be better suited for some companies over others.

Traditional Marketing Strategies

Before technology and the internet, traditional marketing was the primary way companies would market their goods to customers. The main types of traditional marketing strategies includes:

Outdoor Marketing: This entails public displays of advertising external to a consumer's house. This includes billboards, printed advertisements on benches, sticker wraps on vehicles, or advertisements on public transit.

Print Marketing: This entails small, easily printed content that is easy to replicate. Traditionally, companies often mass produced printed materials, as the printed content was the same for all customers. Today, more flexibility in printing processes means that materials can be differentiated.

Direct Marketing: This entails specific content delivered to potential customers. Some print marketing content could be mailed. Otherwise, direct marketing mediums could include coupons, vouchers for free goods, or pamphlets.

Electronic Marketing: This entails use of TV and radio for advertising. Though short bursts of digital content, a company can convey information to a customer through visual or auditory media that may grab a viewer's attention better than a printed form above.

Event Marketing: This entails attempting to gather potential customers at a specific location for the opportunity to speak with them about products or demonstrate products. This includes conferences, trade shows, seminars, roadshows, or private events.

Digital Marketing

The marketing industry has been forever changed with the introduction of digital marketing. From the early days of pop-up ads to targeted placements based on viewing history, there are now innovating ways companies can reach customers through digital marketing.

Search Engine Marketing: This entails companies attempting to increase search traffic through two ways. First, companies can pay search engines for placement on result pages. Second, companies can emphasize search engine optimization (SEO) techniques to organically place highly on search results.

E-mail Marketing: This entails companies obtaining customer or potential customer e-mail addresses and distributing messages or newsletters. These messages can include coupons, discount opportunities, or advance notice of upcoming sales.

Social Media Marketing: This entails building an online presence on specific social media platforms. Like search engine marketing, companies can place paid advertisements to bypass algorithms and obtain a higher chance of being seen by viewers. Otherwise, a company can attempt to organically grow by posting content, interacting with followers, or uploading media like photos and videos.

Affiliate Marketing: This entails using third-party advertising to drive customer interest. Often, an affiliate that will get a commission from a sale will do affiliate marketing as the third-party is incentivized to drive a sale for a good that is not their own original product.

Content Marketing: This entails creating content, whether eBooks, infographics, video seminars, or other downloadable content. The goal is to create a product (often free) to share information about a product, obtain customer information, and encourage customers to continue with the company beyond the content.

What Are the Benefits of Marketing?

Well-defined marketing strategies can benefit a company in several ways. It may be challenging in developing the right strategy or executing the plan; when done well, marketing can yield the following results:

Audience Generation. Marketing allows a company to target specific people it believes will benefit from its product or service. Sometimes, people know they have the need. Other times, they don't realize it. Marketing enables a company to connect with a cohort of people that fit the demographic of who the company aims to serve.

Inward Education. Marketing is useful for collecting information to be processed internally to drive success. For example, consider market research that finds a certain product is primarily purchased by women aged 18-34 years old. By collecting this information, a company can better understand how to cater to this demographic, drive sales, and be more efficient with resources.

Outward Education. Marketing can also be used to communicate with the world what your company does, what products you sell, and how your company can enrich the lives of others. Campaigns can be educational, informing those outside of your company why they need your product. In addition, marketing campaigns let a company introduce itself, its history, its owners, and its motivation for being the company it is.

Brand Creation. Marketing allows for a company to take an offensive approach to creating a brand. Instead of a customer shaping their opinion of a company based on their interactions, a company can preemptively engage a customer with specific content or media to drive certain emotions or reactions. This allows a company to shape its image before the customer has ever interacted with its products.

Long-lasting. Marketing campaigns done right can have a long-lasting impact on customers. Consider Poppin' Fresh, also known as the Pillsbury Doughboy. First appearing in 1965, the mascot has helped create a long-lasting, warm, friendly brand for Pillsbury.

Financial Performance. The ultimate goal and benefit of marketing is to drive sales. When relationships with customers are stronger, well-defined, and positive, customers are more likely to engage in sales. When marketing is done right, customers turn to your company, and you gain a competitive advantage over your competitors. Even if both products are exactly the same, marketing can create that competitive advantage for why a client picks you over someone else.

What Are the Limitations of Marketing?

Though there are many reasons a company embarks on marketing campaigns, there are several limitations to the industry.

Oversaturation. Every company wants customers to buy its product and not its competitors. Therefore, marketing channels can be competitive as companies strive to garner more positive attention and recognition. If too many companies are competing, a customer's attention may be strongly diluted, resulting in any form of advertising not being effective.

Devaluation. When a company promotes a price discount or sale, the public may psychologically eventually see that product as worth less in the future. If a campaign is so strong, customers may even wait to purchase a good knowing or remembering what the sale price was from before. For example, some may intentionally hold off buying goods if Black Friday is approaching.

No Guaranteed Success. Marketing campaigns may incur upfront expenses that hold no promise of future success. This is also true of market research studies, where time, effort, and resources are poured into a study that may yield no usable or helpful results.

Customer Bias. Loyal, long-time customers need no enticing to buy a company's brand or product. However, newer, uninitiated customers may. Marketing naturally is biased towards non-loyal patrons as those who already support the company would be better served by further investment in product improvement.

Cost. Marketing campaigns may be expensive. Digital marketing campaigns may be labor-intensive to set up and costly to maintain the scheduling, implementation, and execution of the plan. Don't forget about the headlines that promote Super Bowl commercial expenses in the millions.

Economy-Dependent. Marketing is most successful when people have capital to spend. Though marketing can create non-financial benefits such as brand loyalty and product recognition, the ultimate goal is to drive sales. During unfavorable macroeconomic conditions when unemployment is high or recession concerns are elevated, consumers may be less like to spend no matter how great a market campaign may be.

What Is Marketing?

Marketing is a division of a company, product line, individual, or entity that promotes its service. Marketing attempts to encourage market participants to buy their product and commit loyalty to a specific company.

Why Is Marketing So Important?

Marketing is important for a few reasons. First, marketing campaigns may be the first time a customer interacts or is exposed to a company's product. A company has the opportunity to educate, promote, and encourage potential buyers. Marketing also helps shape the brand image a company wants to convey. For example, an outdoor camping gear company that wants to be known for its rugged, tough goods can embark on specific campaigns that embody these traits and make these emotions memorable to prospective customers.

What Is the Purpose of Marketing?

An important goal of marketing is propelling a company's growth. This can be seen through attracting and retaining new customers.

Companies may apply a number of different marketing strategies to achieve these goals. For instance, matching products with customers' needs could involve personalization, prediction, and essentially knowing the right problem to solve.

Another strategy is creating value through the customer experience. This is demonstrated through efforts to elevate customer satisfaction and remove any difficulties with the product or service.

What Are the 4 Ps of Marketing?

A commonly used concept in the marketing field, the Four Ps of marketing looks at four key elements of a marketing strategy. The Four Ps consist of product, price, place, and promotion.

What Are the Types of Marketing?

There are dozens of types of marketing, and the types have proliferated with the introduction and rise of social media, mobile platforms, and technological advancements. Before technology, marketing might have been geared towards mail campaigns, word-of-mouth campaigns, billboards, delivery of sample products, TV commercials, or telemarketing. Now, marketing encompasses social media, targeted ads, e-mail marketing, inbound marketing to attract web traffic, and more.

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Marketing in Business: Strategies and Types Explained

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Marketing refers to the activities of a company associated with buying, advertising, distributing, or selling a product or service.

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BBC World Service | Learning English | The Flatmates - Episode 120

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Find out what happens when Tim asks for a bank loan in episode 120 of The Flatmates - our interactive soap for intermediate learners with mp3 and pdf downloads and quizzes

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Borrowing and Lending (From Financial English)

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Borrowing and Lending (From Financial English)

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The Top 100 Brands by value

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Best Global Brands - The 100 Most Valuable Global Brands

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Interbrand presents the Top100 Best Global Brands. Learn about their drivers of brand value, brand strength, brand leadership, and growth.

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What on earth is she talking about??

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Statistics are joyous....

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In 2023, Apple's brand value amounted to approximately 880.5 billion U.S. dollars. This represented a roughly seven percent drop from the record high of 947 billion dollars in 2022. Despite the decrease, the U.S. tech company retained its crown as the most valuable brand worldwide, according to the source's ranking, beating Amazon, Google, and Microsoft.

Apple's brand loyalty and global revenue

Apple stands out for its high-design products and strong brand loyalty. When the company releases a new product, consumers often queue in front of the tech firm stores, despite the device's price or if other companies offer a similar product. Apple's annual financial results are a mirror of its growing success. The company's global revenue increased to 394 billion dollars in the fiscal year 2022, up from 366 billion in the previous period.

Apple's smartphone business

The development process of Apple's smartphone started in 2004, and the first-generation iPhone was introduced in 2007. In the course of time, Apple became one of the biggest global smartphone manufacturers. In the first quarter of 2023, iPhone sales accounted for more than half of Apple's revenue. During the same quarter, Apple held 20.5 percent of the global smartphone market, ranked second behind its biggest competitor, South Korean multinational manufacturing conglomerate Samsung.

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In 2023, Apple's brand value experienced a slight decrease from the previous year.

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7 min read
Products and services aren't the only valuable things your company owns. By understanding and optimising brand value, you can invest in a powerful strategy for long-term gains.

The power of the brand

The recognition of a brand as a valuable asset is relatively recent. Back in the 1950s, business success and consumer choice was defined solely on product quality and value, not the name on the tin, according to the Atlantic. The advertising boom of the 1960s turned company identities into household names, bringing them into public consciousness through the medium of marketing. Brand names became a proxy for desirable characteristics like sleek design, durability, refinement, service and innovation.

Nowadays it's hard to imagine making purchase decisions without brand coming into play, so immersed are we in the culture of brand identity and meaning. We reflexively look to the brand name of an item to help determine its value. Little wonder then that today's brands are valuable commodities that are built, nurtured and even bought and sold between companies.

What is brand value?
Brand value definition:
Brand value is the monetary worth of your brand, if you were to sell it.

If your company were to merge or be bought out by another business, and they wanted to use your name, logo and brand identity to sell products and services, your brand value would be the amount they would pay you for that right. This is market-based brand value.

Another way to think of brand value is in terms of replacement cost (cost-based brand value). In this sense, brand value is the amount you would need to spend to design, execute, promote and amplify a totally new brand to the same level as your old one. That figure might include the cost of hiring a design agency, the time and effort spent on marketing and social media strategy, the cost of advertising, PR outreach and sponsorship, and so on.

Brand value vs. brand equity

Whereas brand value is a financial gauge of your brand's worth, brand equity is to do with customer perceptions and how positive they are. Customers who prefer your brand to others and exhibit loyalty to your brand over time are contributing to your brand equity.

Brand equity can be viewed as a factor influencing brand value, since in building your brand equity, you're contributing to the qualities that will make it valuable - things like brand recognition, positive associations with quality and service, or aspirational value. All these factors promote revenue by driving customer spend and loyalty.

However, a brand can also have value without having equity. For example, in the pre-release phase of a product, a company would spend money and invest value into developing a brand before its future customers ever see it. Brand equity is linked to both reputation and brand purpose, since these relate to how a customer's personal values align to a brand's, and the resulting bond that forms between them. Compared with brand value, brand equity is a more nebulous concept and harder to measure, since it relates to consumer motivation, opinion and behaviour rather than financial figures.

eBook: Maximizing Brand Value in an Era of Rapid Change

Free download

How to measure brand value

Today's appreciation of the power of brands means that there is deep thinking, and as a result, a wide array of perspectives on what makes a brand successful, how brands interact with consumer psychology, and even what the true definition of brand should be. Unsurprisingly then, measuring brand value can be complex and confusing without a clear strategy in mind.

That said, the most fundamental ways of measuring brand value are still quite simple. One of the most straightforward methods is to ask other companies what they would pay for the rights to your brand. By doing this, you'd get a range of figures you could average out to arrive at a fair market value.

Likewise, you can gather quotes from providers or make internal projections to find out how much it would cost to develop a brand equivalent to your current one.

The brand value chain

An important milestone in the development of brand-building strategy is the brand value chain model. It's a 4-step schematic developed by marketing experts Keller and Lehman in 2003. It describes how brand value can be built through marketing, and the variables that affect progress along the journey.

There are 4 brand value chain stages (marketing programme investment, customer mindset, market performance and shareholder value.) These stages are moderated by three "multipliers" - (marketing) program quality, marketplace conditions and investor sentiment, which may affect how fast and well brand value can be increased.

As it was developed in 2003, the brand value chain does not specifically take into account digital marketing and how brand value and reputation is built online, and in particular, how digital culture has changed consumer behaviour. However, it can provide a useful framework for building and quantifying brand value.

Building your brand value

Here are a few of the ways you can enhance your brand's equity and ultimately, your brand value.

Marketing and advertising

Marketing helps you to move from brand awareness and recognition to understanding, alignment and loyalty from your customers.

According to the original definition, brand value chains start with marketing is the first step to realising brand value, since it establishes the brand in the mind of the customer.

Ambassadorship and sponsoring

Whether it's sports stars, social media influencers or musicians, aligning with a well-known individual or group is a well-established form of brand-building. It not only raises awareness and recognition of your brand, it can be linked with brand purpose, where your company's ethical and social values are enhanced and amplified by your choice of ambassador.

Customer experience

Providing great customer experiences is a powerful way to boost brand equity. As much as quality products and services, customers increasingly expect a good experience from brands, and research has shown that many are willing to pay more and choose brands ahead of their competitors when they've enjoyed a positive experience.

eBook: Maximizing Brand Value in an Era of Rapid Change

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Brand Value and How to Measure & Improve It | Qualtrics

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Products and services aren't the only valuable things your company owns. By optimising brand value, you can invest in a strategy for long-term gains.

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A brand is more than a name, logo, design, symbol, or combination of those things that help a customer figure out where a product comes from. A brand is a promise, an experience, a feeling, and an expectation.

Regarding brand equity vs brand value, brand equity is not the same as brand value. Brand equity is about the customer because its value comes from what the customer thinks, feels, remembers, and associates with the brand. This is something to think about when it comes to the brand.

On the other hand, brand value decides how much money a company can make from its brand in the market.

Brand equity is something other than something already there; it's something that a company builds up over time by making products that are hard to replace. The brand is known as the second name for the item itself because of how reliable it is.

As a counterpoint, brand value is a meaningful way to measure a company's goodwill and value.

So let's find out the differences between brand equity vs brand value through this blog.

What is brand equity?

Brand equity is how important a brand is in a customer's eyes. It is an educated guess of how much a brand is worth, even though the criteria are often hard to measure and intangible. Brand equity also changes how people see the value of a brand.

Brand equity is directly related to how much customers trust a certain brand, among other things that customers think about. This value is based on how customers feel about each brand. The value can be seen when a company puts a recognizable brand name on a product.

What is brand value?

Brand value is the monetary worth of the brand. This is figured out by the market and answers the question, "How much would it cost to buy the brand?" The answer depends on different, changeable factors that can be controlled.

At its core, brand value is a way to measure a brand's financial worth using data. Doing a thorough market analysis in research can help someone figure out how much a brand is worth.

As was already said, it partially answers the question of how much it would cost to buy the brand and the even more important question of how much someone would pay to buy it. The value of a brand is also directly affected by how much its competitors are valued.

The differences in brand equity vs brand value

After defining brand equity and value, we can now focus on how they differ. Regarding the distinction between brand equity and brand value, the following points are significant:

Brand equity

Brand value

Brand equity is the additional value a product receives due to being manufactured under a well-known brand name.

Brand value is the implied market value of the brand as established by financial and marketing analyses.

Brand equity is the customer's perception and propensity toward the brand.

Brand value represents the brand's net present worth of potential future earnings.

Brand equity is a result of customer recall.

Brand value is based on the brand's clarity, uniqueness, authenticity, commitment, consistency, performance, and so on.

Brand equity solely includes revenue derived from direct and indirect customer-related factors.

Brand value is the total of all earnings.

Brand equity shows how well the brand is doing.

Brand value is the sum of all the money that can be made from selling the brand in the market.

Your customer's perception of your brand will determine its brand equity.

Market variables that determine the value of your brand have an impact on brand value.

Conclusion

Brand equity can raise a brand's perceived worth in the marketplace, and brand value is the outcome of brand equity. Brand equity is the difference between what customers perceive as a brand value and what a product would be worth without the brand name.

Brand equity is a product or service's added value. Brand equity affects customer behavior and purchases. Customers' perceptions of a brand's reputation, quality, and experience determine its worth.

Brand value is its financial value. A brand's revenue, market share, and profitability determine its value. Financial analysts and investors measure brand value to help value a company.

QuestionPro CX is a customer experience management software that assists organizations in gathering and analyzing client feedback to improve the customer experience.

QuestionPro CX's brand equity and value are determined by the quality and effectiveness of its products and services, as well as the brand's reputation and perceived value in the eyes of its customers and the market.

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Brand Equity vs Brand Value: Key Differences | QuestionPro

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Brand Equity vs Brand Value. Both are informed brand valuations. One indicates market penetration, and the other, financial performance.

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Property of J.Gelfer

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Source: Market Leader 3rd Edition, Intermediate

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Source: Market Leader 3rd Edition, Intermediate

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Public Relations - Download as a PDF or view online for free

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How to avoid a PR disaster.

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A well-prepared strategy can get an organization back on its feet during a crisis. The 2018 KFC chicken crisis is one of the best examples of how an organization can face its worst nightmare and yet come out of it much brighter!

Background of crisis

In February 2018, KFC's biggest nightmare turned into a reality. The famous fried chicken restaurant chain ran out of chicken due to supplier issues. This resulted in the company shutting down more than half of the stores in the UK. The bright side to this story was the exceptional way in which KFC handled this crisis turning it into a positive PR campaign for the brand, saving not only the brand's reputation but also maintaining the customer's trust!

Let's see what they did and how we can use this as a test case in crisis management.

1. Apology and Accountability: KFC didn't play the blame game with the chicken suppliers and instead apologized to the customers directly via social media channels and newspapers.

2. Communication: KFC was playing the field in addressing questions and concerns of customers on social media. They also tweeted various Q&As that addressed customer queries.

3. Transparent: Along with communicating with customers. KFC was also transparent about the steps they took to bring the operations back to normal by providing a link to a page with all key information.

4. Gratitude: KFC showed their gratitude to all the stakeholders involved by publicly thanking everyone who was impacted.

5. Emotion: To make things right, KFC injected the right amount of humor in their key messages.

6. Spokesperson: All of the key messages on social media came from KFC's founder, Colonel Sanders.

In this digital age, social media is a very important tool. KFC had a visible presence on social media prior to the crisis and made sure to use that to reach the affected parties. If you find yourself in crisis or in a similar situation, Midas-PR can provide you with hands-on approach and help you with a solid crisis management plan. Visit our website www.midas-pr.com today for more information or get in touch with us by email

Check out the best Public Relations Company at Designrush.

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How KFC turned their worst nightmare into a positive PR!

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A well-prepared strategy can get an organization back on its feet during a crisis. The 2018 KFC chicken crisis is one of the best examples of how an organization can face its worst nightmare and yet come out of it much brighter! Background of crisis In February 2018, KFC's

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The powerpoint we looked at in class. Republished here. So you lazy so-and-sos don't have to take notes.....

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A New Simple Weird Economic Result System

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A New Simple Weird Economic Result System

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A Diamond Is Forever

One woman captured this strength and timelessness in four simple words, and in doing so, she captivated the world. Employed in a Philadelphia based advertising agency, Frances Gerety was a woman working in a 'man's world.' De Beers was her main account - one of the 'women's products' she'd been hired to write for. In 1947, she had just finished working on a series of ads and was heading to bed, when she realised she'd forgotten to create a signature line for her latest campaign. Exhausted, she scribbled something on a slip of paper before falling asleep. The following morning, she presented it to a boardroom of men. Initially met with hesitancy due to its unusual style, her line, 'A Diamond is Forever,' would go on to transform both the diamond and advertising industry forever. In 1999, 'A Diamond is Forever' was named as 'The Slogan of the Century' by Advertising Age.

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The most successful advertising slogan of the 20th Century

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The most successful advertising slogan of the 20th Century

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When it comes to legendary, world-changing ad campaigns, few can touch DeBeer's A Diamond Is Forever.

It scaled the Mount Everest of Advertising challenges: it grew the market for the product, rather than simply stealing market share from a competitor.

In other words, it dramatically changed consumer behavior.

Hey, there's a reason Advertising Age named "A Diamond Is Forever" the best advertising campaign of the 20th century!

And here's the kicker: the most effective elements of the campaign were born of necessity.

They were, in fact, forced upon De Beers, and in turn, upon their advertising firm, N.W. Ayer & Son.

But to understand all that, you need to know a bit o' history first.

Why You Won't See De Beers' Logo, or Even Their Name, In The Ads

De Beers, you understand, was a monopoly.

A monopoly specifically manipulating the availability of diamonds to artificially increase their pricing and profits.

I don't write that as an accusation, just as a historical fact that put the company at odds with the United States Anti-Trust laws.

The US Government even tried to bring suit against De Beers but was thwarted only because De Beers wasn't a US Company.

And so to keep out of the clutches of US Gov oversight, De Beers never had offices in the United States, and would naturally be prevented from advertising itself in the US.

In other words, forget about typical client demands to "Make the Logo Bigger."

They couldn't show a logo or brand at all in the ads!

Moreover, since De Beers sold cut diamonds, they couldn't really advertise specific jewelry in their ads.

And because they were a monopoly with over 90% market share, they couldn't expand their revenues by stealing market share from competitors, the way most businesses do.

These are some pretty hefty obstacles for any advertising firm.

Now let's add onto that the fact that the product was essentially bereft of features and benefits.

It's a freaking rock.

Yes, it's pretty and it glitters. Just like most other gem stones.

Except most other precious gemstones are colored, and so are arguably even prettier, which is why fancy colored diamonds fetch a premium.

So now that we've got a good handle on the historical context for the obstacles, let's look at the objectives.

What De Beers Hoped to Make Happen Way Back in 1938

In 1938 a representative of Sir Ernest Oppenheimer, then president of De Beers Consolidated Mines, wrote to Ayer to inquire about "the use of propaganda in various forms" to boost the sales of diamonds in America.

Since World War 1, only about half the amount of diamonds were sold as before the war, with the Great Depression reducing sales even further.

Betrothal rings were a thing, of course. But diamond engagement rings were a rarity, and most people considered them a waste in comparison to other luxury items.

Only the top 10% of the population gave or received diamond engagement rings. And even then, they amount spent on the diamond was paltry compared to todays standards.

There was no de rigueur social expectation of a diamond engagement ring, and certainly no set standard for expected size or expense.

So the goal was to propagandize the American public into buying diamond engagement rings with higher quality stones.

To quote from the brief given to Frances Gerety, the copywriter who penned the immortal tagline "A Diamond Is Forever":

"We are dealing primarily with a problem in mass psychology. We seek to maintain and strengthen the tradition of the diamond engagement ring - to make it a psychological necessity.

Target audience: some seventy million people fifteen years and over whose opinion we hope to influence in support of our objectives."*

And in the absence of ads trying to make a direct sale, or directly promoting the brand, or any given benefit of the product, the campaign was forced to "push" the only thing it could: the emotional currency attached to the diamond.

So De Beer's invested $500,000 per year (or about $9.2 million in 2020 dollars) for three years to see if N.W. Ayer & Son could work some magic.

And boy did they!

By 1941 diamond sales had increased by 55 percent.

Then they exploded after World War II, to coincide with the Baby Boom.

But of course, that happened before Frances Gerety transformed and encapsulated the campaign with her famous tagline. That didn't happen till 1947.

But all this is talk of advertising, whereas Sir Ernest Oppenheimer spoke of propaganda.

The difference is that Frances Gerety and her ads were paired with the work of Dorothy Dignum at N.W. Ayer & Son's public relations division.

Dorothy had high schools teach graduating seniors about diamonds, specifically the famous "Four Cs."

She worked to have Hollywood and Fashion magazines do feature pieces on diamonds as worn by movie stars and celebrities. She went heavy on product placement and it payed off big time.

She even worked to get the "Diamonds are a girls best friend" dance sequence placed into Gentlemen Prefer Blondes.

The combined effect of the PR and advertising campaigns was to present the idea that diamonds were a gift of love: the larger and finer the diamond, the greater the expression of love.

The results?

Between 1939 and 1979, De Beers's wholesale diamond sales in the United States increased ten-fold, from $23 million to $2.1 billion

The Lessons - How De Beers Benefited from Their Restrictions:

1. Their ads didn't look, read, or feel like ads.

Because their name and logo had to be absent from the ads, the A Diamond Is Forever campaign was an ideal example of "native advertising" (aka an "advertorial") before there was even a name for it. An effect their copy and art choices amplified.

Clients often want their ads to sound "professional," which is to say, like an ad. Or they want to follow an advertising trend everyone else is doing. Don't make that mistake. Take a lesson from De Beers and make your ads sound distinctly different than the other ads on the radio or TV. The less they sound like an ad, the better.

2. Their ads used glamour to "romance the stone" without focusing on the stone itself.

The ads spoke to the longings and desires of the customer. The customer was the hero of the ad, not the product. The diamond merely aided the hero of the ad, acting as a portal to achieving their deepest aspirations.

Not every product or service can make use of Glamour techniques, but more can than you might expect. And when products and services can't be romanticized, the people behind them can and should be.

3. Their ads attached meaning and emotions to the SYMBOL of the diamond engagement.

When the campaign was first launched, diamonds were seen as a wasteful extravagance. Young couples would rather have a car or a washing machine than a diamond. So the ads couldn't be about the stone itself. Instead they focused on what the stone meant to the man giving the ring, and what the diamond ring would mean to the woman receiving it.

Diamonds were presented as a solution to problems the buyer was already trying to solve. How do I tell the woman I love that my love is not only real, but permanent? How do I give her something that will be with her forever? How do I signal to her, and allow her to signal to others, that I'm successful and "making it"?

Now, you might be thinking that this only applies to romantic products, but just look at how Michelin did the same thing with "Because so much is riding on your tires..."

4. They went HEAVY on product placement and social proof.

There are two primary ways people make decisions: 1) cost-benefit, and 2) what kind of person am I (or do I aspire to be) and what would that kind of person do in this situation. By showcasing how celebrities and socialites and movie stars adored diamonds and considered them an essential and expected part of romance, De Beers doubled down on the second decision making style, mostly because there was no cost-benefit argument to be made.

Now, you might not have the PR power or budget to put that kind of social proof to work, but you can harness the power of social proof with testimonial ads and customer reviews and other user-generated content. You can also use dialogue style ads to present fictionalized social proof. You can also figure out how to use branded items as a substitute product placement. Make the use of your product and service more conspicuous, if possible. If a used car dealership can figure out how to do this, so can you:

5. They understood that they had to reach people before they were in the market

You can't make anyone buy an engagement ring if they're not planning a proposal in the near future. Nor can you predict when they'll meet and fall in love with someone to whom they'll want to propose. You have to influence the persons ideas around engagement ring expectations before they ever reach that point, and reap the rewards of payday whenever that happy moment finally arrives.

Breaking out of the direct response mindset and into the branding mindset is a big leap for many business owners, but it's one that can come with huge rewards for anyone selling a mass market product or service.

6. Their ads gave the customer a mental framework that reduced uncertainty

I've previously written about the alchemy of the sleeper effect, in which advertising claims are transmuted from what the company says into what "they" say. And "A Diamond Is Forever" is a perfect example of this in how it turned "two month's salary" as a benchmark made up by De Beers into a benchmark widely accepted as "traditional wisdom."

It's the same with the idea of one full carat weight as a benchmark. Without these two frameworks, how would anyone know what to spend or how big of a diamond to get? How would you know what your with-any-luck-fiancée would expect? By providing these anchor points, De Beers dramatically increased the amount the average man spent on his engagement ring, and these frameworks were happily accepted as risk and uncertainty reducing tools by these same men.

And, yes, you too can help your prospects mentally frame their decisions in ways that reduce their uncertainty. If none come to mind, let me suggest you start by offering loop-hole-free guarantees and quality / convenience assurances.

So take these lessons to make your own advertising better.

While you're at it, you might want to contemplate what obstacles are confronting your advertising and marketing efforts and how could you turn them into advantages rather obstacles.

And if you'd like help with either task, feel free to reach out.

*Quote taken from the well-researched and documented Novel, The Engagements, by J. Courtney Sullivan

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Learning From Legends - When The Obstacle IS The Way

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When it comes to legendary, world-changing ad campaigns, few can touch DeBeer's A Diamond Is Forever. It scaled the Mount Everest of Advertising challenges: it grew the market for the product, rather than simply stealing market share from a competitor. In other words, it dramatically changed consumer

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BBC banning unhealthy food adverts aimed at kids 

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BBC banning unhealthy food adverts aimed at kids 

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Ban on advertising unhealthy food to children considered

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A complete ban on advertising unhealthy foods to children is being considered by the industry's self-regulatory body as a way to reduce childhood obesity.

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Marketing Powerhouse Past & Present - Gillette Safety Razor Co. — Razor Archive

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Gillette invented consumer marketing as we know it today……

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How Kendall Jenner caused millions in losses for Pepsi with a single advertisement

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Kendall Jenner Pepsi Commercial (2017)This tone-deaf advertisement features model Kendall Jenner as the leader of a group of protestors, who awkwardly mirror the Black Lives Matter movement. The climactic scene of the ad depicts a police officer, who accepts a can of soda from Kendall Jenner.

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The History of Advertising in 60 seconds

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The History of Advertising in 60 seconds

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The History of Advertising in 60 Seconds

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The official Lake District National Park website has all the information you need about visiting the breathtaking Lake District. Advice on popular attractions and things to do, where to stay, events plus helpful tips. Start planning your visit to the Lakes right here!

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The official tourism website for the region

It's fantastic to be welcoming visitors back to the Lake District, Cumbria. Whether it's the first time or the 50th time you've visited this very special part of the world, we can't wait to inspire you and help you book ahead for your 2021 holidays now!

There's plenty of accommodation to suit every type of visitor, whether it's for a short midweek getaway for two or an extended family holiday including the dog. From B&Bs to cosy cottages, well-equipped holiday parks to luxury spa resorts, we have it covered in the Lake District, Cumbria.

With visitor attractions, entertainment venues and leisure facilities now reopen, check out our great selection of things to do in the Lake District. Explore some tasty food and drink inspiration and don't forget to delve into our unique shops and retail experiences.

Check out our inspirational blog and itinerary planner - bursting with great ideas for COVID-safe places to stay, world-class attractions and things to do. We also have an array of stunning landscapes and wide-open spaces for you to rediscover.

It's so easy to plan your visit in advance, with a helping hand from our Know Before You Go guide. We've even created some practical tips and recommendations especially for motorhome and campervan users, with our new 'Van Life' page.

Why not take a look at our great selection of gift voucher experiences too? With plenty of short breaks, luxury fine dining and pamper days, you're sure to find the perfect gift for someone special or maybe a treat for yourself to mark restrictions easing.

Or if you'd like a little piece of the Lake District, Cumbria delivered directly to your door, visit our 'Shop Local' page, with a fabulous selection of Cumbrian businesses operating online.

See you soon!

In England's north western corner lies ancient Cumbria and the timeless landscapes of the Lake District. This is where modern tourism was born, in the shimmering lakes and hushed mountains whose radiant beauty inspired poets and painters to turn nature into art.

A landscape of adventure designed to challenge the imagination, from the exhilaration of the summits to the thrill of an open water swim. A deep heritage of culture expressed in traditional games and a rich calendar of performance. A sophisticated cuisine rooted in the land itself. A world apart, but so easy to get to.

In Cumbria and the Lake District we know how to take care of our guests. We've been doing it for a long time. There's an enviable array of high quality places to stay. Draw back the curtains on this magnificent landscape and see it with your own eyes. Explore and be inspired. See the lakes and mountains gleam misty and wide, explore the "lonely ridge, the dancing beck and the silent forest," and bask in the wonder of it all like so many have done before, from Wordsworth to Wainwright, from Ruskin to Potter.

Allow us to guide you to the best new experiences, show you new areas to visit, help you find your space and make new memories that will last a lifetime.

You may leave the Lake District, Cumbria, but once you've been, it'll never leave you.

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Visit the Lake District Cumbria, a place where the beauty of the landscape combines with the best quality accommodation, food and drink and things to do. Search for Lake District hotels, bed and breakfast, cottages campsites and glamping. Lake District romantic breaks and weddings.

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Home | Have a brilliant Yorkshire - Yorkshire.com | Welcome to Yorkshire

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Welcome to Yorkshire, Have a brilliant Yorkshire with fantastic offers from all around our fantastic county. What will you do next? Yorkshire.com

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Key

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Poldark film locations Locations associated with the Poldark books and other mining locations Last week's Cornwall Tourism Awards saw many of our Visit Cornwall members... Plan your Easter holiday in Cornwall with our guide to what's on 2022 Planning your holiday for 2022? Here's our beginners guide to some of...

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Welcome to the official tourism site of Greater Manchester where you can search for things to do in Manchester and find out what's on, as well as getting inspiration for your visit to this fantastic city region.

Youthful, diverse, energetic and bursting with character; Manchester is one of the most exciting places to visit in the UK right now where everybody and anybody is very warmly welcomed.
Manchester is the only UK city to feature in Lonely Planet's Best in Travel 2023 list and the only UK city in National Geographic's influential 'Best of the World' list which annually sets out 25 of the must-see places to visit around the globe.
Known throughout the world as the birthplace of the industrial revolution, Manchester has a proud history in science, politics, music, arts and sport. And today the city combines this heritage with a progressive vision to be a city that delivers surprise and delight in equal measures.

Manchester city centre is jam-packed with unique and eclectic restaurants, bars, shops, museums, galleries, hotels and places to stay whilst the surrounding Greater Manchester boroughs offer a patch-work of visitor experiences including quaint market towns, traditional pubs and beautiful green spaces and waterways to be explored on foot or bike. The city region is easily navigated, with great transport links both in and around Greater Manchester.

Furthermore, a packed calendar of world-class events and festivals - from the landmark Manchester International Festival to the enchanting Manchester Christmas Markets - mean there's always another reason to visit Manchester.

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visit manchester - the official tourism website for greater manchester

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Visit Manchester | Holidays in Manchester UK | Official Tourist Board

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The Official Tourist Board for Manchester & Greater Manchester with information about what to see and do, what's on and where to eat in the drink in the region