When addressing the business of fashion it’s necessary to understand the value brought to the picture from the tangible and intangible elements of your product. If one the one hand, the physical nature of your garments will have a clear cost (associated with its production), on the other hand, the real markup you will be able to put on a collection is given by something intangible: your brand equity.
Developing a brand with a high equity value allows companies to:
The intangible value of your brand is extremely relevant to your profit but at the same time, it can be difficult to appraise it or value it correctly. In this post, we are going to compare and contrast different models that can help you correctly identify how your brand creates value, and how much of it.
These models have been developed by focusing on customers, by running interviews and questionnaires designed to understand how brands affect our perception of products.
Here are the topics we are going to address:
Our starting point is taking into account the fact that a brand adds an intangible value to the existing sum of a product’s tangible assets.
A first, effective way to look at your brand is in the context of your customer base. According to branding theory, a brand is a “promise of consistency”, and in this sense, a first approach to appraising your brand consists of understanding the size of your loyal customer base.
The brand value will be in fact be connected to its notoriety, and its familiarity within its market.
In this sense, we can start by breaking down the concept of brand knowledge into its constituent components.
Brand knowledge is the sum of brand awareness and brand image.
This first approach to breaking down the value of a brand allows us to see its value broken down into more manageable chunks, as well as creating useful concepts to elaborate on this topic further. After this first, intrinsic reflection we can move forward to discuss brands in a more layered perspective.
In this second angle of view, we can appreciate the value of a brand through the symbolic representation of Davis’ (2002) Brand Value Pyramid.
In this model of branding assessment, we have three layers that comprise the stratified structure of a brand’s value.
This shows how all brands will have a connection to the most foundational element of the brand value pyramid but at the same time, as we climb up the pyramid, fewer and fewer brands will be able to maintain a more intellectual, or better yet, existential appeal. In the next section, as we move towards more complex and intellectual representations of the equity stored in a brand we are going to address the Brand Asset Valuator.
The brand asset valuator has been designed by Young and Rubicam, and it’s a very useful tool designed to take another look at the way we should appraise our brand’s equity.
This model tends to provide a more practical, market-oriented approach to appraising brands in terms of how they can assist products in penetrating a crowded market.
It revolves around 4 fundamental concepts:
A complementary perspective on the Brand Asset Evaluator is provided by the BrandZ (Millward Brown) model which is focused on appraising the strength of the relationship with its customers.
According to BrandZ there are in fact five levels to understand the power of a brand:
This model provides additional insight into our analysis but moving the focus of our reflection from the product itself to the relational dynamic happening between a brand and its customers.
So far, however, we were not able to specifically indicate that mysterious factor that makes certain brands loved by customers and create a devotional affection that all other firms can’t create. In the pursuit of this love factor, in the next section, we are going to discuss an additional perspective, the one provided by LoveMarks.
The Lovemarks approach has been designed by Kevin Robert, by Saatchi and Saatchi to focus on that intangible factor that makes the customer love a brand.
To approach the topic of loving a brand we start from the following assumptions:
After having set the tone to discuss how a brand can be loved, let’s look at the Lovemarks model. According to this approach, there are four types of brands:
This model really assists us in understanding the journey an item must go through in order to gain affectionate attributes.
The final stage of growth of a brand is represented by Cult and Iconic Brands, which will be discussed in the next section of our post.
Brands who gain the appeal of a cult brand or that become iconic share a set of similar characteristics and management choices.
Cult brands tend to:
Iconic Brands, just like cult brands, are aware of the tradeoffs connected to their own communication and as such pursue values and goals which many other brands would not, in the same way, pursue. For instance:
Iconic brands instead tend to:
Many fashion brands are focused on this brand typology, with the nuance of creating a heritage brand.
The development of a strategy aimed towards the achievement of this iconic status is usually carried out through the creation of a narrative revolving around strong cultural roots, creating a highly recognizable style and developing a compelling narrative.
After having discussed branding in a variety of perspectives, we can now move towards some reflections and conclusions.
As we delved into the intricacies and complexities of brand equity appraisal, we can summarise some of our findings as follows:
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