In Synesis 2004, the 12th edition of our yearly publication in regards to our thinking and our work, you can find the following sentence:

“Brands are for businesses the most valuable asset”

The German Sunday paper “Welt am Sonntag” writes that the investment bank Morgan Stanley carried out a set of studies and came to the conclusion that businesses whose competitive edge depends mostly on material assets, such as property, factories and machinery, with a high degree of probability will not achieve a long term sustainable and above average return on the committed capital. These tangible assets downright invite competitors to copy and can lead to surplus capacities, price wars and sinking profit. However, immaterial goods such as brands are tough to create and tough to copy. As a consequence, Morgan Stanley suggests to investors, to identify businesses with strong brands and to invest in them. With this suggestion, the investment bank confirms our experience, that businesses who own strong brands, for all intents and purposes have a better position in the market. Of course, brands cannot be had for free. They require careful leadership and care and, most of all, investments which are not tied to the particular earnings situation of a business.

Well-managed and cared for brands earn the money they cost and the investments which are due with steady regularity. Contrary to the perception that the enlightened consumer living in the knowledge society is not willing to accept prices which include the costs and investments for brands, the market is showing (and this goes for almost all branches) the exact opposite. However, it is true that immaterial value which brands represent has to exist perceivably.

Of course, a marker is not automatically a brand. Brands also are not developed over night, not at the drawing table of graphic designers or on computers, which kaleidoscopically form made-up words. Brands do not just flow from the pen of ad writers and the assumption that an advertising campaign alone could turn a word or a picture into a brand is, as a rule, wrong. Brands are conceived and born into a business. They live from the uniqueness of their being. The development and management of a brand requires utmost attention, care and caution. Brands which experience all this are for both the consumer and the investor of utmost value. They are, as we like to call them, “burst of light, symbols of excellence”. This is also the reason why we spend a lot of attention on brands during the development and implementation of business strategies, why we always put them in the center of all thinking and action.