Prof. Mateo Aboy, PhD, SJD, FIP

Academic & Personal Site

brand valuation

Brand Valuation

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)"