Brand Valuation Methods & techniques
Download as PPT, PDF2 likes6,910 views
The document discusses various methods for valuing brands, including cost-based, income-based, and market-based approaches. It provides details on specific valuation techniques like book value, replacement cost, earnings capitalization, and relative valuation methods. Brand valuation considers factors like brand positioning, personality, and equity. As intangible assets become more important, managers will need systems to link brand management to long-term financial performance and value creation. Developing standardized economic approaches to brand valuation can provide important tools for management.
Brand Valuation Methods & techniques
- 1. PRESENTED BY MET STUDENST
- 2. Savio Fernandes 16 Rajesh Shetty 47 Austin Trindade 55 Ismile Shaikh 43 Francis Kori 23 Alistar Gomes 18 Amit Singh 49 Rahul Nair 32
- 6. Brand valuation pyramid tiers
- 7. These can be broadly classified into: Cost based Income based Market based
- 9. Book value Replacement value Liquidation value
- 10. Current cost valuation All assets are taken at current value and summed to arrive at value This includes tangible assets, intangible assets, investments, stock, receivables VALUE = ASSETS - LIABILITIES
- 11. Cost of replacing existing business is taken as the value of the business
- 12. Value if company is not a going concern Based on net assets or piecemeal value of net assets
- 13. Earnings capitalization method. Discounted cash flow method (DCF)
- 14. This method is also known as the Profit earnings capacity value (PECV) Company’s value is determined by capitalizing its earnings at a rate considered suitable
- 15. Cash flow to equity Discount rate reflects cost of equity Cash flow to firm Discount rate reflects weighted average cost of capital
- 16. Companies in difficulty Negative earnings May expect to lose money for some time in future Possibility of bankruptcy
- 17. Also known as relative method Assumption is that other firms in industry are comparable to firm being valued Standard parameters used like earnings, profit, book value Adjustments made for variances from standard firms, these can be negative or positive
- 18. An example of a hypothetical valuation of a brand in one market segment SAMPLE BRAND VALUATION CALCULATION
- 19. Simple and easy to use Useful when data of comparable firms and assets are available
- 20. Easy to misuse Selection of comparable can be subjective Errors in comparable firms get factored into valuation model
- 22. Branding Vision Brand Positioning Brand Personality
- 23. Product Branding Product-line Branding Product range Branding Corporate Branding
- 25. Current Beliefs Current Actions Message Desired Belief Desired Actions
- 27. Brand Strategy is separate from the 4P’s. It guides and inform decisions about every aspect of the marketing mix. I. Corporate Objectives & Brand Portfolio II. Marketing Objectives III. Brand Strategy Communications Strategy Product and Pricing Strategy Channel and Distribution Strategy IV. Marketing Execution & Monitoring Strategic Marketing Process Brand Strategy is an integral part of the overall strategic marketing process. It helps to bridge the gap between business strategy and marketing strategy.
- 28. Resonance Consumer Judgments Consumer Feelings Brand ImageryBrand Performance Salience The purpose of the brand equity pyramid is to outline the basic building blocks of a what the brand should stand for in order to guide the process of building brand equity. It is the basis for determining key elements of the brand strategy – brand vision, brand positioning, and brand personality and brand measurement. Identity Relationship Response Meaning
- 29. The purpose of brand personality is to ensure a brand behaves in a way that is consistent with its values in order to increase its appeal and create greater affinity with its target. Brand personality can also help to differentiate a brand’s imagery relative to competitors.
- 30. • Brand Name • Brand Logos and Icons – Colors – Symbols – Music/Earcons • Celebrities or Personalities • Advertising slogans and jingles • Brand Alliances/Secondary Associations – Co-branding – Licensing – Sponsorship – Event Marketing – Celebrity Endorsement – Third-party Endorsements
- 31. The contribution of brand to its owners will keep on increasing. Brand is just one of several factors that provide stable competitive advantage. Although many brand measures are available, few can link the brand to long- term financial value creation. Brand investments and their results are not followed in detail nearly as much as investments in other assets. As the importance of intangibles to companies increases, managers will inevitably need to install more value-based brand management systems that can align the management of the brand asset with that of other corporate assets and provide more reliable indicators on contribution of brand to the overall business performance. For that purpose, it is necessary to amend accounting standards. As the need for brand valuation is constantly increasing from both the management and the market, the first and most important step is the development of a unique economic use approach to brand valuation. Such a system may well become the most important management tool in the future.
- 32. THANK YOU
Editor's Notes
- #29: A structured conversation with the aim of auditing the brand? emotion v fact reputation and values Are we where we need to be today Where’s the future of the brand? where do we want to go What’s the gap What mechanisms, actions, processes are available to drive the brand in the right direction and build appropriate and valuable equity?
- #30: A structured conversation with the aim of auditing the brand? emotion v fact reputation and values Are we where we need to be today Where’s the future of the brand? where do we want to go What’s the gap What mechanisms, actions, processes are available to drive the brand in the right direction and build appropriate and valuable equity?