Surprisingly there are still skeptics to the power of a brand to add significant value to a business. This usually comes from the operations and finance folks. Accounting practices don’t have a tidy place for things that exist more between the ears of consumers than within a company’s warehouses and bank accounts.
When I’m teaching the concept of brand building (versus business building), I define the former efforts as bolstering its “intellectual property value.” This is done partially by the folks in marketing and communications, but far more commonly it’s done by such things as innovations in product design, improved distribution and creative pricing.
Apple has certainly done two out of three. Their pricing is hardly “creative.” As a market leader, Apple’s prices are mostly set to convert this elevated brand value into lovely lucre. Lots of it.
Strong Brands Can Deliver Amazing Profits
Below is a case in point, taken from an Economist Magazine published earlier this month (a pay wall may block you from full content):
The story is about diminishing returns for most cell phone handset makers. Diminishing, that is, except for Apple. Comparing Apple’s handset share of market with the brand’s share of profits is a clear demonstration of how powerful a strong brand can be to maximize profits — even with relatively modest market share.
What do you do when your newspaper readership is aging and not being replaced with new readers? You publish online, for one, and hope to recoup some of your lost print revenue by selling ads there.
Now how do you reach a younger audience if you’re the New York Metropolitan Opera? You go digital as well. As this Economist piece reports, The Met is having some impressive success by bringing their opera to other cities throughout the world. The operas are being presented in movie theaters, for special events, using high-tech projection and sound equipment.
Here are some details from the publication.
These “simulcasts” made a big splash. During the 2007-08 season over 600 cinemas in America, Australia, Europe and Japan showed the Met’s live broadcasts. More than 920,000 people in 23 countries watched eight operas, roughly a threefold increase over the previous season, and about 70,000 more than the total audience of the Met proper during that season. For the next season 11 operas will be televised at an even greater number of cinemas.
The cost of admission is roughly $30, and formal attire is optional. It’s a cool idea.
Would you go to one of these?
Marketing Technology Musings and Tips by Jeff Larche