Brand Analysis - OVO Brand Value
OVO is the rapper Drake's self created conglomerate which functions as a music label as well as a fashion company specializing in streetwear. Streetwear has recently become infamous due to the reports of companies like Supreme and Off-White selling our products with 1000% markups.
Fittingly, this project will measure the brand value of OVO as a result of their product value when compared to similarly produced clothing. We want to determine their “price premium”
Two factors go into the price one is willing to pay for a product- the quality of the product (craftsmanship) and the reputation of the brand (whether it is designer ex: red-bottom Chritain Louboutins).
After researching online on various forums, I determined that the OVO clothes are produced at the factory shared by clothing brand Roots, and thus the products are similar in build quality and material. Specifically, we will focus on cotton hoodies. We will compare them to Roots Brand’s cotton hoodies and by averaging the extra price from four hoodies, we can discern the brands’ price premium. By multiplying that by the number of sales we can determine the Brand’s yearly performance.
OVO Hoodies
Hoodie: AVIATOR HOODIE
Price: $148.00
Material: 350 GSM 80% COTTON 20% POLYESTER FLEECE
Hoodie: STUDIO WORDMARK HOODIE
Price: $148.00
Material: 350 GSM 80% COTTON 20% POLYESTER FLEECE
Hoodie: ATHLETIC COLLAGE HOODIE
Price: $148.00
Material: 350 GSM 80% COTTON 20% POLYESTER FLEECE
Roots
Hoodie: Colorblock Hoodie
Price: $ 98.00
Material: 80% cotton, 20% polyester
Hoodie: Mens Cooper Canada Hoody
Price: $ 98.00
Material: 80% cotton, 20% polyester
Hoodie: Sussex Kanga Hoody
Price: $ 98.00
Material: 80% cotton, 20% polyester
According to statistical significance t-test this is statistically greater pricing for OVO hoodie (sample size too small, however)
The t-value is 26. The p-value is < .00001. The result is significant at p < .05.
On average $ 52.00 extra is paid for a high quality OVO cotton hoodie compared to an equally high quality “less trendy” cotton hoodie. HOWEVER, Roots is still a relatively upscale brand which has its own brand value (much like LL Bean or North Face). We need to factor this out as well to get the plain value for OVO. Average clothing markup is 62%, for a brand like Roots, we’ll approximate to 100%. Thus a 80% cotton, 20% polyester hoodie at wholesale likely costs around 48 dollars (even though you can buy plain ones in bulk for around $15).
In final when compared to Roots, OVO’s brand adds an additional 100 dollars to clothes or a approx. 200% markup. We cannot assume this is constant for the other products, but for the sake of a conclusion, since OVO made $50 million in sales last year, we can approximate that $33 million came from brand value.