Question

what does buying a brand assure us?

Answer 1

That they are best and good.

Answer 2

WHEN Imperial Tobacco, the world’s fourth-largest cigarette-maker, said in July that it would spend $7.1 billion to expand its business in America, its chief executive, Alison Cooper, was adamant on one point: it will not be buying companies. Instead, in a three-way deal with Reynolds American and Lorillard, it will pick up a factory, a sales force and, above all, a collection of brands. Two of them, Winston and Blu (an electronic-cigarette brand), will be “the focus for the lion’s share of time and money invested”.

No management expert would think it strange that Imperial would spend the best part of $7 billion on something as ethereal as brands. They are the most valuable thing that companies as diverse as Apple and McDonald’s own, often worth much more than property and machinery. Brands account for more than 30% of the stockmarket value of companies in the S&P 500 index, reckons Millward Brown, a market-research company. Everyone knows that a Ralph Lauren Polo shirt costs more than a polo shirt; Coke without the logo is just cola. Ms Cooper hopes to exploit Winston’s “untapped brand equity”.