Neglected Now, Worthless Later: Why Brand Building Cannot Wait – Brand Management 110
Dr. Priya Sharma sighed as she gazed out the window of her office, overlooking the bustling streets of Mumbai. For twenty years, she had poured her heart and soul into building – let’s call it – Lifecare Pharmaceuticals from the ground up. What started as a small generic drug manufacturer had grown into a respected name in the Indian pharma market.
But times were changing. Just last week, her friend, Dr. Raj Mehta, had sold his company to a multinational corporation for a sum that made headlines across the industry. It was a trend that couldn’t be ignored – brand acquisitions were becoming increasingly common in the Indian pharmaceutical landscape.
As she turned back to her desk, her eyes fell on the latest sales reports and prescription data for Lifecare’s seven flagship products. The numbers were good, solid even. Market share and prescription share were growing much above the industry average. Their latest introduction was gaining traction among doctors.
Yet, a nagging feeling persisted.
“What if,” she thought, “the day comes when I need to consider selling Lifecare or some of my top seven brands? Would these traditional metrics be enough?”
Dr. Sharma knew that while prescription data, sales figures, and market share were valuable, they told only part of the story. They failed to capture the years of trust built with doctors, the goodwill among patients, and the potential for future growth – all fruits of their persistent marketing efforts.
It was then that a conversation from a recent pharmaceutical conference came flooding back. A speaker had emphasized the concept of brand valuation, arguing that it was the key to truly understanding a company’s worth in the long run.
Intrigued, Dr. Priya reached for her phone. It was time to dive deeper into this concept of brand valuation. After all, in this era of acquisitions and mergers, the true value of Lifecare might lie beyond the numbers on these reports.
She dialed her marketing director’s number and called him for a discussion.
Dr. Priya realized that this could be the beginning of a new chapter for Lifecare – one that would ensure its legacy, whatever the future might hold.
It emerged from their discussions that a brand valuation is a vital tool for marketing leaders seeking to demonstrate the long-term effectiveness of their marketing activities. She also decided she would do a brand audit of all the top seven brands in the Lifecare portfolio every six months.
Dr. Priya’s realization
Dr. Priya realized that brand building and brand evaluation are crucial for startups, SMEs, and MSMEs, even if they’re not even planning to sell immediately.
She studied several companies, and it was crystal clear that Sun Pharma, Intas, Dr. Reddy’s Labs, Glenmark, and a few more had invested in brand building even when these were start-ups and SMEs in the eighties and early nineties of the last century.
“Oh my God! They are giants now!” she mused in admiration of these companies.
What did Dr. Priya learn?
First, a strong brand creates value beyond tangible assets. It encompasses customer loyalty, market recognition, and perceived quality, which can significantly boost a company’s worth. In a potential sale, this intangible value can lead to a higher acquisition price.
Second, brand building helps differentiate a company in crowded markets. For smaller businesses, this distinction can be vital for survival and growth. A well-established brand can command premium pricing and attract more customers, enhancing profitability and market share.
Third, regular brand evaluation provides insights into the company’s performance and market position. This information is valuable for strategic planning and identifying areas for improvement, regardless of sale intentions.
Moreover, an organization with strong brands can attract investors, partners, and talent. These relationships can fuel growth and innovation.
Lastly, in uncertain economic times, a valuable brand can be a lifeline. Recall the Covid era? Strong brands grew much more than the also rans. Zincovit from Apex and Dolo 650 from Micro became stronger during this period.
If circumstances necessitate a sale, a well-built and accurately valued brand can be a company’s most valuable asset, ensuring fair compensation for years of hard work.
In essence, brand building and evaluation are not just exit strategies, but fundamental business practices that drive growth, resilience, and long-term success.