Research (link to Wiki) and discussion, about the Sixt Brand and Sixt Marketing.
Understanding a companies brand, the value that it has and what costumers associate with it, is an important part of analyzing a business.
Observing the companies marketing campaigns and its quality and effectiveness can help us project the ease with which the business can attract new costumers and retain current ones.
Sixt is a strong modern brand that is associated with a high level of service and the great costumer centricity that Sixt stands for. (Based on my own and friends & family assessments, samplesize approx. 10, we could try to find a study to quantify what more costumers think about Sixt)
Sixt marketing campaign are snappy, a bit aggressive/brave and funny as they often make fun of politicians or other events.
They are well made an contribute to Sixt success.
I am always having an eye on the social channels of companies mainly Instagram and Tiktok because this is key to winning over younger generations and generating large reach in my opinion with compounding effects over time. (Important for b2c companies not b2b)
I think Sixt Instagram and TikTok (German) channels are well made and are gearing towards the new generation.
I think they have been improving recently which increases my confidence in Sixt a bit.
Valuation Note:
I associate good marketing/branding and therefore higher confidence with a higher price target but unfortunately it is impossible to perfectly quantify the impact. This is because every company is different and we cannot perfectly quantify the strength of Sixt in marketing/branding or the importance that marketing/branding has for Sixt specifically.
If I had to guess Sixts strong marketing is increasing the multiple I am willing to put on Sixts P/E by 2-3 and good social media is a part of that and contributes 0.5-0.75 currently.
The values could change e.g. in the case that Sixt would go viral.
Note: Contributions to P/E multiple can also be negative if an department is doing badly.
Over time we would want to synchronize our assessment of marketing strength with growth rates of a company. Ultimately it would be cool to develop an understanding (educated guess) how much Sixt brand and marketing contributed to growth every year everything else being equal. (I would say It’s probably in the low to mid single digits - fairly uneducated guess based on revenue growth rates of last years excluding covid impact)
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