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Investing in brand power

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Have you ever heard of investing in brand power? Some people feel that this is the only way to invest your money, while others disagree. Investing in brand power does have it advantages at times. Let's take a look at what brand power is and what affect it can have on you when you decide to invest.

What is brand power?
Brand power reflects the strengths of a brand due to the response of the Business Branding Index. This measures the familiarity and the favorability of brands among business decision makers. This shows how business people feel about the company. This shows how highly they favor the company and how they feel about the reputation, management, and its potential as a good investment.

Why is brand power important?
Picking stocks in the unpredictable market conditions can be hard and also an art. So, which consumer products company out there is the best? It is true that many household name companies would contribute their success to the strength of their brands. Brands drive sales growth and profitability for these businesses. These companies spend tons of dollars to build those brands. From Tide to Campbell's, if we (the consumer) believe it's the best product, then more than likely we will buy it. If brands weren't that important, then all we would be buying is the generic brands.

Investors in brand power:
One way to help ensure your portfolio has above average results over the long term is to purchase shares of business that have significant brand power. Right now, investors that own companies that possess strong brand names and lots of cash seem to be doing much better compared to the rest of the market. With concrete performance, businesses such as Pepsi, Nestle, and Nike have dealt with the negative impacts of the market very well and it doesn't seem to affect them like with smaller brands. .

The company's brand is a critical part of the overall business strategy. First impressions of a business count for a lot, and potential prospects will quickly make a decision whether or not to buy from a company solely on how they perceive its particular brand. This is true with just about any product out there and this greatly affects decisions when it comes to investments.

How do you know if a business has investing brand power?
If you are trying to decide if a business has investing brand power, ask these specific questions:
Are you willing to pay more for the brand name as opposed to another cheaper brand, such as the generic brands?
If a store didn't have the brand that you are interested in, would you likely go somewhere else to buy the product that you wanted?
If you started a business that would create competition with this product, what are your chances of success? Would you be able to make a dent in its market share or in its product?
Brand is viewed as an investment for the long term versus the investment with returns in a short amount of time, so it is harder to sell to impatient, less visionary investors. Brand building is a long term investment and it does not happen overnight.

If you are thinking in investing in brand power, carefully look at your options. Although investing in brands with power may be an advantage at times, remember to be patient and ride out the ups and downs of the market. Returns on investments don't just happen overnight.


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