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Branding Myths: What is the link between, ‘Brand Marketing’ and ‘Brand Finance’?

In today’s post we are busting the myths about whether Branding is only a Marketing Concept or Financial too. We look forward to establish a link between the two aspects.

Isn’t it true that many of us have increasingly grown up to believe that Brand is a Marketing Concept? Rightly so, the people who usually are associated with branding profiles are designated Brand Managers, Marketing managers, Advertising Departments and other agencies. Such designations have played a major role in concluding that Branding is a Marketing Concept. Also, people concerned with branding see it as a delivering on a product promise made to consumers which implies the latter to be attracted towards products with some quality aspirations related to the brand. Such views impose no relation with financial aspect of branding.

But how true is it that a brand holds financial significance too? Let’s look at the Brand from another aspect; the Financial Aspect. In the opinion of several known industry branding veterans, the very idea of value of a strong brand adds the financial involvement of branding. And it doesn’t stop there; some of the most important Brand KPIs are measured with a financial core. Brand Equity for example has been increasingly rising to be known as and measured in financial units. Such financial terms though strongly associated with Branding are only implications of the Brand Marketing Exercise.

Note: For those who don’t know about Brand Equity, it is defined as the value of a corporation with its flagship brand names minus its value without them.

Concluding, Branding as a practice is a Marketing Concept without any denial, in our opinion. But the implications of the Branding Practice on a Brand can only be measured based on firm performance and specifically a Monetary Value. This brings in the Brand Finance into the picture with a clearly defined measuring objective. Though there  are several other  KPIs and tools to audit a brand’s performance, the Financial KPI’s tend to gain more credibility for obvious reasons.

5 Responses to Branding Myths: What is the link between, ‘Brand Marketing’ and ‘Brand Finance’?

  1. Pingback: » Branding Myths: What is the link between, 'Brand Marketing' and … | Brand Marketing Tips

  2. Ed Roach Reply

    October 5, 2009 at 6:09 pm

    Interesting post Meheer. I spoke to a group of CFO’s in Ann Arbor Michigan a few years ago on the benefits of branding. This group didn’t care about marketing benefits but only how branding can save money. Bottom line.

    Number one – consistency. How the brand image is delivered is crucial. If the brand image is consistent across all media, then there is little room for confusion , making it cheaper to promote the company. Inconsistency results in confusion. Confusion is a costly error. If you buy into differentiation and go to market with one thrust, then marketing costs are focused on that unique selling point. For every product or service you add to that you not only increase the marketing costs but also add more competitors to the mix.

    Another financial consideration for branding is luring prospective investors or buyers. If the brand is focused properly, the brand is more attractive to investors or buyers. They have their act together. When the brand is strong, the resulting passion among all stakeholders holds a great deal of value.

    To view branding as simply a marketing function is a gross misunderstanding and appreciation of what your brand IS. Your brand at the end of the day is your passion and reputation. If nurtured properly, the financial benefits are obvious.

  3. Meheer Reply

    October 5, 2009 at 10:40 pm

    I agree with you Ed to a great extent. But believe that it is important that this group of “CFOs” needed to open up to the Marketing Aspect of branding too.

    Branding on an overall basis, according to me is as much of a Marketing concept as it is a Financial one. Though Financial Indicators sound more credible, only Marketing Indicators are capable of insighting deeper into the details of the brand performance. I think Financial indicators do well to give us a full picture of the brand; something like Brand Equity. But Marketing Indicators act as internal indicators thereby proving to be watchmen whistling when somethings wrong; somethings like brand knowledge and association.

    What do you think?

  4. Ed Roach Reply

    October 6, 2009 at 11:00 am

    Before meeting with the CFO group I spoke with my accountant and they suggested that I “show them the money” so to speak. Questions from the group were indeed about how branding saves money. No concern about marketing – perhaps short sighted. Your explanation makes a great deal of sense. I wonder how many company officers concern them selves beyond their own responsibilities?

  5. Meheer Reply

    October 6, 2009 at 10:50 pm

    Isnt this the right situation for Brand Audit to ‘enter the building’? Does a brand audit (internal) have the authority to pull up defectors of Branding??

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