Brand Valuation Methods & techniques

Finance & Accounting

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

26. Brand
Consumers
Competition
Our
PODs
POPs
Their
PODs
.

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 Imagery
Brand 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