Brand value is a highly debated topic among marketing analysts, brand evaluators and academics with the effect that several schools of thought exist even when it comes to defining brand value. While some consider it to be as simple as “what you get for what you pay”, Kotler and Keller define “brand valuation” as “an estimate of the total financial value of the brand”. For the purpose of elaborating on the popular criterion for brand value determination, I'll briefly define brand value as "the tangible and intangible worth of a trademark". Academics and marketing experts have purported their brand value analysis based on their research which could be broadly categorized as under:
Cost-based Approach: This method considers the costs involved in creating the brand through the stages of research and development of the product concept, market testing, continued promotion during commercialization, and product improvements over time.
Market-based Approach: By using available marketplace information on the sale of branded and unbranded products, a particular brand value is measured. The researcher computes the profits due to the brand by subtracting the profits that would be made if the product were unbranded. This is a rather transparent approach but it lacks the ability to take into account any future growth.
Financial Approach: Brand value is measured by computing the estimated earnings from intangibles and analyzing customer mind-set metrics. It predicts the future earnings attributable to the brand and capitalizes on the earnings by applying a discount.
Formula Approach: Some experts prefer to distinguish brand value from brand equity and therefore prefer to evaluate intangible strength of a brand rather than the financial data. For example, Interbrand rankings take into account the financial performance as well as the other intangible attributes like role of brand and brand strength. Check more on Interbrand rankings at: http://www.interbrand.com/en/Default.aspx
John Hallward, Director at Ipsos-ASI Inc, contends that brand value is determined by its uniqueness, familiarity, quality, popularity and relevance which is in turn supported by product quality or performance. Young & Rubicom have the BrandAsset Evaluator™ technique where they decipher the "Energy" of a particular brand by evaluating its vision, invention and dynamism.
To sum up, different approaches to brand value determination exist which require a certain degree of estimation and subjectivity and the above-mentioned are just one way of categorizing them.
No comments:
Post a Comment