Economies of Brand

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When we say economy, what comes to one’s mind first is the social system related to the production, distribution and consumption of goods and services in a society. Survival of this system depends on two terms which are demand and supply. Depending on the availability of resources, many firms produce goods and services, and depending on their purchasing power, consumers buy these services and goods.
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Economists always say that if the companies want to be competitive and profitable in global market and to survive for a longer time, they should achieve economies of scale and economies of scope. Economies of scale means lowered costs and efficient production due to production at a large scale, on the orher hand, economies of scope occurs when a company can produce at a lower cost as a result of sharing resources for the production of  many goods. However, there is a missing concept at this scene and according to me it is “Economies of Brand”.
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Economies of brand occurs when a company can charge a premium price for its products and services due to its brand reputation. A well-designed and perfectly-named brand, with the help of the distinctive product features and performances, can play a significant role for the sustainability and profitability of the company. Companies should also invest in their brands as much as other facilities. Succesful brands occurs when they are supported by some distinctive features like high-quality, durable, convenient etc.
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According to Brandz’s 100 Top Most Valuable Global Brands 2012 list, Apple, founded in 1976, is the most valuable brand, with 182,951 million dollars brand value, IBM, founded in 1911, occupies the second place with a brand value of 115,985 million dollars and then Google, founded in 1998, follows with a brand value of 107,857 million dollars (Brandz, 2012).
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When we look at these facts, we can observe that brand value does not depend on the age of the firm. One common feature of these three firms that they operate in technology industry. The importance of brand image in technology industry is so high that these companies not only invest in their brands but also their products. They survive due to their high-quality products and services. All of these firms are the leaders of their sectors.
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Apple is the most valuable brand, thanks to this, it can charge higher prices for its products and services.  The first thing that comes into mind when you hear Apple is “prestige”. It is a wonderful sample for product and image engagement. Even if there are many competitors in its sector, it has the highest customer loyality. Knowing this fact, Apple can charge a premium for its products. When it announces a new product launch, many of the customers go and wait for hours to be the first users of that.brands
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To conclude, we can say that economies of brand should be considered as a source of competitiveness and companies should give high importance to their brands. It should not be forget that in the first years of the production, products serves for the interest and profitability of the company, however; in the following years brand starts to overweigh.
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