brand valuation analysis

Brand valuation defines a common language for brand performance around which a company is galvanized and organized. Responsibility for Brand Strength factors can be allocated to multiple functions, building engagement and a sense of responsibility for the brand across the organization.

Brand valuation provides critical insights that influence brand strategy. The brand valuation process analyses the strength of the brand using different brand performance measures. This process defines what drives brand value, revenue, profitability and consequently which particular components of the brand could be leveraged to increase brand value.

global vox populi brand valuation consultants come from a range of backgrounds, both from consultancies and industry; hence our experience of working with multiple different brands and organizations provides us with knowledge that could help our clients.

global vox populi uses different brand valuation methods as per the requirement. There are pros and cons of all these methods of valuing brands. A brand valuation method that is appropriate for one brand may not be the best valuation method for another. We make our judgement in such a way so that it can be exercised to ensure the most appropriate of brand valuation methods is used.

income based brand valuation methods

• relief from royalty method: this brand valuation method is based on how much the brand owner would have to pay to use its brand if it licensed the brand from a third party. it uses discounted cash flow analysis (dcf) to capitalize future branded cash flows
• excess-earnings method: this brand valuation methodology calculates the earnings above the profits required to attract an investor – which uses the estimated rate of return based on the current value of the assets employed. these excess earnings are assumed to be attributable to the intellectual property, or brand.
• price premium method: this brand valuation method is based on a capitalization of future profit stream premiums attributable to a business’ brand above the revenues of a generic business, without a brand.
• capitalization of historic profits method: the brand valuation method is based on the capitalization of profits earned by the brand.

market based brand valuation methods

• price to earnings (p/e) ratios method: the p/e brand valuation method multiples the brand’s profits by a multiple derived from similar transactions of profits to price paid based on the value of reported brand values.
• turnover multiples method: this brand valuation method multiplies the brand’s turnover by a multiple derived from similar transactions.

cost based brand valuation methods

• creation costs method: this brand valuation methodology estimates the amount that has been invested in creating the brand.
• replacement value method: this brand valuation method estimates the investment required to build a brand with a similar market position and share.

which brand valuation method do we use?

We use all brand valuation methods. It is generally best to value brands using all appropriate brand valuation methods and synthesizes the results to arrive at a conclusion.