- Royal Warrants Associated with British Heritage, Trustworthiness, Superior Quality
- Most Brits Aware of Royal Warrants
- Many consumers willing to pay more for brands with Royal Warrants
The-Power-of-Royals-Research-Presentation-27.04.23-BF-OnlyDownload
Awareness, familiarity and understanding of Royal Warrants and their impact on British consumers is the topic of original new research conducted by Brand Finance to coincide with the coronation of King Charles 3.
Key findings of the research were:
- Almost two-thirds (62%) of British consumers are aware of Royal Warrants
- More than one-third (36%) of British consumers are familiar with Royal Warrants
- Most (54%) British consumers associate ‘British heritage’ with Royal Warrants
- 42% of British consumers consider brands with Royal Warrants to be ‘Trustworthy’ and of ‘Superior Quality’
- Approximately one-third of British consumers see Royal Warrants as a ‘Symbol of Success’ (34%) and as associated with a ‘Premium Brand’ (36%)
- When considering alcoholic drinks, 24% of consumers said they would pay more for a brand with a Royal Warrant. When considering apparel, 14% of consumers said they would pay more for a brand with a Royal Warrant. When considering purchasing a car, 12% of consumers reported being willing to pay more for a brand with a Royal Warrant.
Across all sectors included in the research, consumers’ perception of reputation grows when respondents are aware the brand has a Royal Warrant. In the automotive industry, brands with Royal Warrants (such as Jaguar, Range Rover, Audi and Vauxhall) are associated with ‘Luxury’ and considered by many to be a ‘Symbol of Success’. Amongst alcoholic drinks brands, consumers who are aware of brands that hold Royal Warants have a 15% average increase in consideration, driving increased sales and an economic benefit to such brands.
David Haigh, Chairman of Brand Finance commented:
“This new research found that Royal Warrants drive increased consideration and are a real economic benefit to British brands and therefore the British economy. Most consumers know of Royal Warrants, and they drive consumer behaviour as a result”
Media Contacts
Michael Josem
Associate Communications Director
Brand Finance
Ed Will
Group Marketing & Communications Director
Brand Finance
About Brand Finance
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Methodology
Definition of Brand
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand Strength
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Valuation Approach
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Disclaimer
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance’s proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
