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Brand Valuation: Spain's Tourism Brand
Transcript of Brand Valuation: Spain's Tourism Brand
Not that important
Spain’s Tourism Brand
Brand valuation: why and how
(brand role and brand strength)
Examples of high brand role
How to find out the brand role
Based on DD’s (Destination Drivers):
DD's are determined based on market studies
Relative weight of each DD is established
The brand role is established qualitatively for each DD.
The Brand Role is determined by weighted average.
BPToA (Brand-Price Trade-off Analysis
Safety (terrorism, crime, etc.)
Authenticity, respect for traditions
Well kept environment
Variety of offerings(shopping, leisure, sports, kids, etc.)
Nature / landscape
Good infrastructure/roads/health services
Exotic, differential factor
Closeness, duration of travel
The MARKET dimension has been evaluated according to mostly quantitative criteria
The Brand dimension has been measured according to 9 parameters, most based on subjective variables
The dimension LEADERSHIP has been evaluated according to cuantitative and qualitative criteria.
The dimension Communication has been measured according to quantitative parameters
Final Result on the MARKET dimension
Spain leads, but not by much
how much is our brand worth?
Why brand value matters
Brands are gaining a higher share of companies' assets
Governments and therefore countries are not an exception: in the global market and with the emergence of Internet and social media, brand equity outweigths product and price as purchase drivers
To correctly manage a brand it is essential to understand how exactly does it contribute to the company's (or country's) bottom line and how does it compare to its competitors brands (how is it positioned?)
Cost approach: how much has been invested in the developement and positioning of the brand.
Doesn't really tell us anything about the brand's contribution to the bottom line and to the competitive positioning of the country
Market approach: by comparing a brand to it's competitors with established brand values and producing a relative multiplication factor.
Not useful for Spain's tourist brand, since there is not a comparable country brand in this industry with an established brand value
Earnings approach: projecting cash flow in the future, finding out brand share in cash flow generation and discounting the resulting amount to present value, using the company's (country's) cost of capital.
Although full of pitfalls, this is the approach we used.
Possible approaches to brand valuation
Need to determine the role the brand plays in purchase decisions and its strength relative to other brands
Brand contribution to bottom line and competitiveness
Overall Brand Role = Σ Brand role for each DD =
Spain does have a very strong brand in this segment of the market