There are many definitions of brand, often narrow in scope. To allow us to consider all the touchpoints of the asset, Brand Finance defines a brand as:
A bundle of trademarks and associated IP(1) which can be used to take advantage of the perceptions(2) of all stakeholders(3) to provide a variety of economic benefits(4) to the entity(5).
This is our preferred definition because it appreciates the breadth of the effects a brand can bring, rather than just affecting the price premium of a product. Identifying each element:
- This is the accounting definition of a brand when conducting a monetary brand valuation.
- The effects brands have are not always directly aligned to the fact but instead to what people believe to be the case.
- Brands affect more than customers or consumers. Staff, financiers or external stakeholders are some of the most obvious examples that are also affected by the brand.
- Higher staff retention or lower recruitment costs are two benefits beyond simply a price or volume premium that a brand can provide.
- Brands apply to more than just companies. Not-for-profits, sports teams and locations are all examples of brands assisting other types of entities.