Brand Building – Cost Implication of Brand Building

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Brand Building – Cost implication of Brand building Brand Meaning The word ‘Brand’ has its origin in the Norwegian word “Brand”, which means ‘to burn’. In ancient times farmers used to put burn marks as identification marks on livestock to distinguish their possessions. If the livestock were replaced by product in today’s world, marketers are resorting to branding to distinguish their products from that of the competitors. Additionally, it also means an inherent assurance to the customers for quality. A brand is a symbol or a mark that helps a customer in instant recall, differentiating it thereby from the competing products of a similar nature. Brands distinguish a product or service from similar offerings on the basis of unique features perceived by the consumers. E.g. LUX, Nirma, PONDS, etc. A brand plays an important role in improving and maintaining product quality. In fact a brand is a seal of consistency and reliability of quality. Brand also helps in better dissemination of product knowledge which can contribute to scientific and rational decision making. For example, TATA denotes an image of a robust responsiveness and indigenous product. Brands Valuable Tradable Assets Brands provide a strong competitive advantage to the companies owning them and hence they are increasingly becoming important tradable assets. In 1993, Coca-Cola paid about Rs.175 crore to buy Thums-Up, Limca,Citra and Gold Spot brands. In 1994, Godrej soaps paid Rs.12 crore to acquire the Rs.67 crore Translectra (maker of GoodKnight mosquito repellent). In 1995, Smithkline Beechem paid Rs.42 Crore to acquire thye Crocin brand from Dhupar Interfan. In 1997, Knoll Pharma sold Coldarin and Burnol for Rs.34 Crore. Ranbaxy paid Rs. 80 crore to Gufic Labs for Mox,ZoleExcel and Suprimox. In 1997, Hindustan Lever paid Rs. 110 crore for Lakme’s basket of brands and only Rs.29 crore

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