The Power of Brand Equity in Business

In today’s hyper-competitive landscape, branding has continuously proven to be a crucial factor in determining share of voice and market share. Yet, while you would be hard-pressed to find many CEOs and Executives who would deny the impact brand development has on business success, many do wonder about the measurable and direct monetary value it delivers.

Simply put, can branding be capitalised? This is the age-old question, or at least it used to be. Since Supreme’s ability to sell basic t-shirts for over $1000 and Star Wars’ collaboration on products with Lego and Adidas lifted licensing revenues substantially, it has become evident that branding can in fact be capitalised.

For those still in doubt, here are 3 case studies on all the different ways corporate entities can and are capitalising on their brand value:

Brand Collaborations; Adidas x Peloton

In 2020, fitness giants Adidas and Peloton teamed up to dominate the connected workout scene. Adidas designed a limited-edition collection of sweat-wicking apparel and footwear specifically for Peloton riders, while integrating a “Peloton mode” offering synced workouts and playlists within their app.

This strategic partnership proved a win-win. The co-branded collection sold out quickly, boosting Adidas’ sales and Peloton’s brand awareness. Both brands solidified their image as innovative leaders in connected fitness, demonstrating the power bringing on a strategic brand name can add to your financial revenues.

Licensing Personal Brand Riches and Controversy; Donald Trump

Donald Trump built billions in wealth through licensing deals that allowed companies use the “Trump” name, aligning their products with his luxury brand image.

At the peak in 2015, he had licensing deals giving 19 partners selling branded deodorant, steaks, ties, mattresses, and more, the right to use the Trump name. However, Trump’s political rhetoric has both boosted and damaged his empire. While properties like his D.C. hotel thrived, past merchandising partners abandoned licensing deals in droves, with only 2 remaining by 2017. So it figures that if a dent to your brand image can cost you financial gain, then a boost to your brand image can certainly lead to a rise in financial value.

Yet despite the damage to his consumer merchandise licensing, Trump has benefited by focusing more on giving his brand name to real estate companies overseas. He continues making lucrative licensing agreements to have the Trump name featured prominently on flashy hotels and resorts abroad. In 2022, the former president received $5.35 million of licensing fees for a golf project in Oman to be named “Trump International Golf Club”, and disclosed another $1.5 million in licensing fees from a project in the United Arab Emirates.

Brand Equity; The billion dollar Starbucks brand.

Having a strong brand often allows companies to charge a premium compared to Competitors, and Starbucks is a good example. While some would argue that Starbucks’ coffee is not necessarily the best, the brand is able to charge more than your average coffee fee. This is because it has been able to build a brand experience that mirrors the lifestyle of its target audience.Their cozy library-like ambiance appeals to affluent, educated, and busy individuals. With a combination of free wifi, availability of charging ports, ample seating options, music, and great architecture, they provide “a third place”, where people can work, engage in conversation, and have a great time, while drinking coffee.

What this means is that, Starbucks has been able to create a delightful experience synonymous with their brand, and as a result, all Starbucks coffees cost 50% more than their Competitors. Today, Starbucks has grown from a single shop in Seattle, to over 30,000 stores globally, making $26 billion in total revenues in 2019. This is a perfect example of how companies can capitalise on their brand to receive additional financial value, outpace competitors, and achieve rapid global growth.

As we’ve seen, Adidas, Starbucks, and Trump later, branding as a phenomenon is not just some fancy buzzword. It is an intangible asset, many of the world’s largest corporate organizations and savvy luxury, sports, and even smaller lifestyle businesses leverage, to not only compete effectively, but to raise revenues and growth hack. Understanding the potency of brand equity and implementing strategic branding initiatives, unlocks a brand’s full potential, and drives enduring financial value.