What price a strong brand?

Peter Walshe
Millward Brown

A trusted brand is a treasured asset, prized by its owners and envied by its competitors. Companies are bought and sold for vast sums of money, above and beyond the value of factories, patents and processes, on the strength of their brands. But when one company pays a premium to acquire a stable of brands from another, what is it really paying for? What proof do we have that strong brands really provide a financial benefit to shareholders and brand owners?

Brands are valuable to companies because they are valuable to consumers. People will pay more for a branded product than a generic one, and more for a favoured brand than alternatives. It seems obvious, then, that a brand that has forged a strong and enduring relationship with consumers should provide a financial advantage to the company.