Sunday 27 January 2008

Indian FMCGs look to brand val as a marketing tool

Business Standard (India) has reported that Indian companies are now turning to brand valuation as a means of assessing the success of their market strategies in the fast-moving consumer goods (FMCG) sector. One example is cited of a company that shifted the emphasis of its marketing from retail-targeted incentives to consumer-oriented ones. Adds the article,
"Brand valuation measures mainly two criteria - the potential profitability of the brand and non-financial factors like brand recall as compared with competitors. In India, such exercises have been undertaken mostly by large conglomerates, such as Tata, since it is easier to quantify the royalty to be charged from group companies using the corporate brand name. However, of late, companies across sectors, especially fast-moving consumer goods and telecommunications, have been valuing their individual brands. In the FMCG sector, brand valuation used to be popular mainly among multinational companies. However, sources say a clutch of home-grown entities are taking the route. Among these companies are Marico, Dabur India, Sun Earth Ceramics (the maker of Sonora tiles), Cholayil (the maker of Medimix) and personal care services firm VLCC".
The article then says:
"Disclosing the value of brands enables companies to have better investor relations and consumer perception. It also helps in tackling corporate litigations considering the rise in trademark cases, say companies".

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