Magazine article Marketing

Orange Shows the Future Is Bright If You Build a Brand

Magazine article Marketing

Orange Shows the Future Is Bright If You Build a Brand

Article excerpt

Last year, WCRS picked up an IPA Award for a paper which demonstrated that its advertising for Orange had benefited the company's share price and standing with the City. If further evidence of the effectiveness of Orange's brand was required, it was delivered in bucket loads last week when German telecoms/engineering company Mannesmann tabled a [pounds]19bn bid for Orange.

No, that's not a typo, it re ally is [pounds]19bn. As a report in Sunday Business pointed out last weekend, for the same sum a buyer could snaffle up a combined package of Marks & Spencer, British Aerospace and British Airways.

The reaction of some financial observers and the City has been to suggest that the Germans have paid too much, and Mannesmann's share price has taken a bit of a hammering since the deal was announced.

But there are two clear reasons why the price being offered for Orange may prove to be a realistic one, and why Mannesmann values the UK telecoms company so highly.

The first, forgive the pun, is because Orange is a company ripe for profit. Since 1994, it has been building a business and a brand in a market where other telecoms brands, such as Vodafone, Cellnet and One 2 One, were already established. It has therefore needed a heavy investment programme in both technology and marketing.

That business model is now about to change and next year, for the first time, Orange will report a pre-tax profit of something in the region of [pounds]500m. …

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