Reading Notes

* The main purpose of measuring brand strength is to learn whether our customers are likely to remain with us. (286)

* The Conversion Model is one of the world's leading measures of brand strength. It is a psychological analysis of commitment to brands, incorporating measures of how to increase commitment and exploit weaknesses in the competition. (286)

* The output of the matrix can be condensed into four key areas for brand strategy: 1.competitive action strategy 2. Removing threats 3.Core strengths strategy. 4. Opportunities strategy (289)

* Brand valuations are increasingly being used as a management tool. The strategic use of brand valuation techniques is becoming more prevalent in many blue-chip organizations, allowing senior management to compare the success of different brand strategies and the relative performance of particular marketing teams. (293)

* How do brands add value? In economic terms, the answer is simple: they impact on both the demand and supply curves. (297)

* A number of methods can be used to value brands. Cost-based brand valuations are rarely used, as the cost of creating a brand tends to have little relationship to its current value. Market-based comparisons are unsatisfactory as a primary method of valuing a brand, because of the scarcity of comparative data and the uniqueness of brands. (298-299)

* A more commonly used method is royalty relief. This approach is based on the assumption that if a brand has to be licensed from a third-party brand owner, a royalty rate on turnover will be charged for the privilege of using the brand. (299)

In applying the valuation framework, one of the first and most critical tasks is to determine the nature of the segmentation for valuation purpose. It