Brand Valuation
Aug/11/07/01:11 Filed in: Marketing
Brand
valuation emphasizes that the most valuable assets a firm has are
not tangible, rather intangible assets such as brands, trademarks,
know-how, management expertise, etc. Brands are becoming
increasingly respected as enduring assets. However, in most cases
the full value of a brand is only realized when brand portfolios
are sold or licensed (e.g. Gillette to P&G). Accounting
standards typically do not recognize the market value of intangible
assets (i.e. these are not noted in the balance sheet). This is
because it is difficult to provide brand valuations that are
objective and verifiable.
Aaken suggest a few possible approaches for brand equity valuation:
-1. Study the price premium generated by the brand (i.e. compare the price of the branded product against unbranded equivalent products).
-2. Use the market value of the firm (i.e. stock price) minus all the tangible assets the firm owns.
-3. Estimate the discounted present value of future earnings attributed to brand-equity.
References:
[1] Doyle, "Marketing Management & Strategy"
[2] Aaken, "Building Strong Brands"
[3] Aaken, "Brand Leadership"
[4] Chong, "International Marketing Study Guide -- U.London (External)"
Aaken suggest a few possible approaches for brand equity valuation:
-1. Study the price premium generated by the brand (i.e. compare the price of the branded product against unbranded equivalent products).
-2. Use the market value of the firm (i.e. stock price) minus all the tangible assets the firm owns.
-3. Estimate the discounted present value of future earnings attributed to brand-equity.
References:
[1] Doyle, "Marketing Management & Strategy"
[2] Aaken, "Building Strong Brands"
[3] Aaken, "Brand Leadership"
[4] Chong, "International Marketing Study Guide -- U.London (External)"