WHAT IS A

BRAND?
A brand is the identity and story of a company that makes it

stand out from competitors that sell similar products or services .

The goal of brand is to earn space in the minds of the target

audience and become their preferred option for doing

business.

In simple words branding is which tends to distinguish a

tangible product or intangible product, service or concept

from that of its competitors in the eyes of customers.

 Definition:
Brand valuation
is the process
used to
calculate the
value of a brand
WHAT IS BRAND
or the amount of VALUATION? •Brand valuation is the

process of estimating the

money another economic value of a brand.
party is

•A brand comprises
prepared to pay
tangible as well as
for it. intangible elements

relating to the company's
style, culture, positioning,
messages, promises and
value proposition.

 •It can also be used to

help make marketing
decisions,such as whether
to invest in marketing
activities that will
increase the value of the
brand.

•Brand valuation
can be used to
determine the
financial worth of a
brand to a
company and its
shareholders.

BRAND VALUATION
IMPORTANCE
UNDERSTANDING BRAND EQUITY: Brand
valuation helps companies understand the
financial value of their brand equity. This helps
in decision making related to marketing,
branding, and strategic planning.

MEASURING BRAND PERFORMANCE: By

regularly valuing their brand, companies can
measure the impact of their branding and
marketing efforts on the value of the brand
over time.
ATTRACTING INVESTORS: Investors are often
interested in the value of a company's brand
as it can be a key factor in its success. A
strong brand can attract investment and
support the growth of the company.
MERGES and ACQUISITIONS: When a company
is acquired or merges with another, the value of
the brands involved is a key consideration in
the valuation of the deal.
 METHODS

Cost Based INCOME BASED

Approach APPROACH

FORMULARY
MARKET BASED BASED
APPROACH APPROACH

COST
BASED 1) The actual sum of
APPROACH money spent to create

METHOD:
a brand is analyzed
under the cost based
2)This is a valuation approach of Brand
approach
Key that
consultants Valuation.
3) This valuation
estimates brand

approach is often a
greatly conservative value based on the
estimate of the brand cost incurred to
value since the cost
create the item.
approach does not factor
all expenditures incurred

in creating the brand.

4) it is feasible to value a
brand on the basis of
what it actually costs to
create or re-create.

MARKET
APPROACH :
A market approach is a valuation method of any given asset set in
the market. A valuator determines the price of an equivalent asset
or transaction amount used for mergers or acquisitions of a similar
asset.
Knowing the market price of any tangible or intangible asset is
beneficial.
The two different market approach methods to business valuation
include Public company comparable &Precedent transactions.
As every method has pros and cons, the benefits outweigh the
disadvantages of this method.
The main benefit is the realtime verifiable date for price
determination, and the lack of similar companies or assets for
determining the price is its prime drawback.
INCOME
APPROACH:
The income approach includes any method of converting
an income stream into an indicator of market value. The
income approach is also called the capitalization approach
because capitalization is the process of converting an
expected income into an indicator of market value.

The approach requires careful application because small

variations in its key variables can be mathematically
leveraged into a wide range of estimated value. The
accuracy of the approach depends on the validity of the
assumptions used to estimate its key variables.
Mathematical techniques used in the approach, which are
sometimes complex, are merely tools for converting these
assumptions into an estimate of market value.
FORMULARY
APPROACH:
The Formulary approaches are those that are

extensively used commercially by consulting

other organizations. This approach is similar to

the income or economic use approach differing in

the magnitude of commercial usage and

employing multiple criteria to determine the

value of the brand. Within formulary approaches

are the following approaches:

1.Interbrand Approach

Interbrand is a brand consultancy firm, specializing in areas such as brand strategy,

brand analytics, brand valuation, etc. It determines the earning from the brand and

capitalizes them by making suitable adjustments.

2.Finance World Method

the Financial World magazine method utilizes the "brand index", comprising the same

seven factors and weightings. The premium profit attributable to the brand is

calculated differently. This premium is determined by estimating the operating profit

attributable to a brand, and then deducting the earnings of a comparable unbranded

product from this.

 3.Brand Equity Ten
As stated by Aaker, the Brand
Equity Ten Method measures
brand equity through 5
dimensions – loyalty, perceived
quality or leadership measures,
other customer oriented
association or differentiation
measure like brand personality,
awareness measures and
market behavior measures like
market share, market price and
distribution coverage.
factor associated with the
4.Brand Finance Ltd.
Brand Finance Ltd. is a UK
based consulting
organization which
undertakes brand valuation
by means of identifying the
position of the brand in the
competitive marketplace,
the total business earnings
from the brand, the added
value of total earnings
attributed specifically to
the brand and beta risk
earnings.

ADVANTAGES OF VALUATION
OF BRANDS:

2. Legitimize and optimize

1. Identify competitive advantage 3. Enhance portfolio
investments.
and opportunity. decisions.
By understanding and defining the
Understanding brand value relative Consistently tracking and
value brand creates, questions
to competitors can inspire change monitoring the health of
about brand-building investment
in growth strategies. It’s not each entity’s brand allows
change from whether to invest to
enough to simply be different from you to fully understand the
how much to invest. If you have a
other providers; you must stand entire ecosystem of your
solid benchmark of brand health,
out in ways that drive value to brand portfolio. You can
when you take on new activities
achieve business success. understand the
such as sponsorship or social
Identifying shifts and trends in connections, influences and
media – whether at the corporate
your brand’s strengths uncovers the “halo effect” that
or product level. They are each
opportunities to advance through occurs between the master
characterized as a company that
product / service adjacencies, brand and sub-brands and
communicates aggressively,
geographical growth, and M&A vice-versa. Knowing this
shaping the landscape of its
activity. The proper brand enables investment
markets. This kind of presence has
intelligence also gives you insight decisions that truly balance
helped frame their markets to their
into where the market is going and streamline your
own strengths and helped them
before your competitors do. portfolio.
reap the related benefits.

 5. Validate the efforts of your team.

4. Inform M&A, strategic alliances and
By utilizing a tangible measure of
licensing opportunities.
impact, leadership and marketing
Understanding the value of all business assets
teams can be objectively evaluated for
informs negotiations in mergers, acquisitions
their stewardship and management of
and partnerships knowing the value your
brand brings – and where its weaknesses may ADVANTAGES OF the brand asset over the long term.
Because the return for branding can
lie – helps identify opportunities for
partnerships and acquisitions that may not
VALUATION OF be identified and tracked over time,

have otherwise been obvious.Knowing the BRANDS: the effort and results for all
departments are visible. This permits
brand’s value permits predictable revenue
growth through licensing efforts. A brand on

all senior managers to work together
for the optimum total return on
the move creates momentum that can be
investment throughout the company.
leveraged. Licensing is a great way to make
When finance and marketing
significant income from the brand itself.
cooperate and work toward defined
goals, everyone wins.
DISADVANTAGES OF
BRAND VALUATION
1. Nearly all models don't meet prerequisites, for example, dependability,
undeniable nature and objectivity.

2.Huge development costs

The biggest disadvantage of branding is that it involves huge cost because brands
are not created overnight and companies have to spend huge sums on advertising
and publicity. Often the brand marketers calculate the ROBI (Return of Brand
Investment) as they tend to predict and justify the brand development

3.Limited quality flexibility

Limited flexibility in the quality of the products and services of the brands is
emerging from the fact that they offer quality for premium price. THE ONLY
REASON why customers will pay this premium price is the guaranteed quality.
4.Changing the perception for the brand

is hard

Disadvantages
Another disadvantage of branding is

that if due to some reason brand gets a

bad name or reputation than it is very

of Brand
difficult, if not impossible to regain the

original position or status of the brand.

It's similar to basketball MVP, one bad

pass can led to losing the game and

you're no more perceived as MVP. Valuation

5.An unlimited, acknowledged model

does not exist.

 M Prisha Rohit Manna Rigzen Nurboo

THANK
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YOU
Ashwin M Adwin Pratham Nandy Rounak Sutradhar

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Samuel Lalachan TEESHA JAIN Anushka Sengupta

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