Brand Value - Meaning, Difference from Brand equity and different methods of Brand valuation

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Brand Value refers to the monetary worth of an organization that comes in handy if a company is being merged or bought by another company that wants to use the brand identity, name, and logo for its products.

Brand Value is critical as it shows the profitability and market leadership quotient of an organization.

Brand Value vs Brand Equity

Brand Value is the financial value of a brand whereas Brand Equity is the commercial value derived from a consumer’s perception of the brand.

Brand Value Examples

1. Apple
2. Amazon
3. Microsoft
4. Google
5. Samsung

How to Calculate Brand Value?

Interbrand’s Methodology to Calculate Brand Value

Interbrand’s Methodology is used to calculate brand value. It offers an insight into how the brand is contributing to business growth in the current scenario and ensuring further growth in the future.

Brand Valuation Methods

Income-Based Brand Valuation Methods

Income-Based Brand Valuation Methods is an approach that values an organization based upon expected, past, and current cash flows. The method determines the amount a brand owner has to pay if he licensed the brand from a third party.

Excess earning Method

The Excess earning Method calculates the extra earnings based on the value of assets.

Price Premium method

The Price Premium method offers an estimation of the brand value by the generated price premium when compared to an unbranded but similar product.

Capitalization of Historic Profits method

The Capitalization of Historic Profits method is based on the subsidization of the brand’s profit.

Market-Based Brand Valuation Methods

The Market-Based Brand Valuation method determines the amount a buyer or seller is willing to shed for the brand.

P/E ratios method

The valuation method compares the current share price of a company to the per-share earnings.

Turnover Multiples Method

The valuation method multiplies the turnover of the brand by the value obtained from similar transactions

Cost-Based Brand Valuation Methods

The Cost-Based Brand Valuation Method values the brand with help of costs incurred to build the brand from the scratch.

Creation costs method

The valuation method gives an estimate of the amount invested in brand creation.

Replacement value method

The valuation method gives an estimate about the required investment to build a brand with the same market share and position.

This video is on Brand Value and it has the following sub-topics.

Time Stamps

0:00 Introduction to Brand Value
00:20 What is Brand Value?
00:44 Brand Value vs Brand Equity
01:18 Brand Value Examples
03:06 How to Calculate Brand Value?
03:43 Brand Valuation Methods
03:56 Income-Based Brand Valuation Methods
04:52 Market-Based Brand Valuation Methods
05:17 Cost-Based Brand Valuation Methods