In today's highly competitive business landscape, brand value has emerged as a critical component for organizations striving to establish a strong market presence and foster customer loyalty. Brand value encompasses the intangible assets that differentiate a company from its competitors, reflecting the brand's reputation, perception, and overall worth in the eyes of consumers.  

To define the value, simply put, “value” means all the things that cannot be quantified in the price tag. There are four reasons why people will genuinely buy a product or service. First, they are experiencing a problem and need it fixed immediately (Pain in the Present). Second, they anticipate a problem and want to start planning for it now (Paint the Future). Third, they seek something to fulfill an immediate need or desire. Then, they seek something to meet an immediate need or desire. Lastly, they want to invest now to reap the rewards later.  

Behind every successful brand lies a careful blend of factors that shape and elevate its perceived value. Brand value is influenced by Price, Product, and Brand Equity — which can lead to Brand Loyalty. The first one is the pricing strategy which is very important to create good brand value. It will help to determine the price point at which one can maximize profits on sales. When setting prices, a business owner must consider various factors, including production and distribution costs, competitor offerings, positioning strategies, and the business’s target customer base. Furthermore, examining the price perception gives new insight into the brand equity based on the financial premium the brand can command.

When we have tried to create a good value proposition with all the factors, there is a time when customers have the ultimate judgment to perceive the price as affordable, premium, economical, or overpriced. Such as, “The brand is too expensive!” “The price is not worth the quality.” “I don’t want to spend more for this brand!” This situation has happened because customers perceive the price to be higher than the value, or we need to determine the price level for people to think our brand is premium. Then the following action has to be questioned. “How much is the right or worth price from customers' judgment for our brand?” Double-check your brand strategy and the ability of a brand.

What is Brand Premium?

In brand strategy, there is terminology that you have to understand; Brand Premium. It refers to the ability of a brand to command a higher price or value compared to similar products or services in the market. It is also a tool for the perceived financial premium that a brand name adds to the intrinsic value of a specific product or service. It offers a unique perspective from other rankings by investigating consumer perceptions of brand value rather than market value. 

For example, based on the theory that any product, such as water or yogurt, has an intrinsic value, but adding some brands means people are willing to pay more. This additional amount is the Brand Premium. It is not a price sensitivity measure (as this is influenced by choices available in the store, promotions, and the type of outlet people buy the product), but instead a quantitative measure of the brand value. It can be a more useful measure than a composite Brand Index, where sometimes there is little differentiation between leading brands. The intrinsic value can be the price of the cheapest brand in the market, e.g., the supermarket's label. Consider, for example, what people would be prepared to pay for a supermarket's label cola versus the branded Coca-Cola.

How to Determine the Intrinsic Value?

By uncovering intrinsic value, market research provides insights into the unique features, benefits, and experiences that consumers associate with brand offerings. There are three ways to identify the intrinsic value that plays a significant role in market research — based on category or industry. The first is based on the minimum price at the same size or taking the price of a private brand. Second, based on the minimum price at the same grade or level. The last is based on customers' perception of established minimum — ask directly to consumers. 

For doing Brand Premium for each industry, we do several things:

Brand Strategy Mapping for Brand Premium

Building a solid and revered brand is essential for long-term success in a fiercely competitive marketplace. Brand Strategy Mapping serves as your compass, guiding you toward creating a strategic roadmap that unlocks your brand's full potential. Developing the most profitable strategy for a premium brand means reexamining market share targets in light of the brand’s category. In other words, managers must simultaneously think about their brand strategy in two dimensions. The first is the category “premium” or “value”? (Is it dominated by premium brands or by value brands?). Second, is the brand’s relative market share low or high? It will be a different strategy and for more detailed information http://hbr.org/1997/05/your-brands-best-strategy

Who Gives Higher Brand Premium?

To discover the key drivers that elevate certain brands to new heights and gain insights that will empower you to shape the brand’s identity. Here are the secrets of those who give higher Brand Premium: higher socioeconomic status, older age group than young, and customers shop in modern trade.

To sum up, the Brand Premium is not achieved overnight but requires continuous monitoring, adaptation, and innovation. By consistently refining and evolving the brand strategy based on consumer insight and market dynamics, then Brand Premium can help you to know how people perceive the value of a brand, how much people still want to buy a product, and how the premium detector of a brand itself. A brand with a substantial premium has successfully differentiated itself from competitors, created a positive perception in the minds of consumers, and built a loyal customer base. Brand premium is a strategic advantage as it allows companies to generate higher profit margins, maintain customer loyalty, and sustain a competitive position in the market. Brand strategies often focus on enhancing brand equity and delivering unique value propositions to justify and sustain a premium.