Brand valutaion and accounting by Navya Kini

2. Dealing with.....
 Introduction
 Meaning of Brand Valuation
 Need for Brand Valuation
 Methods
 Conclusion

3. Introduction
 Brand has come a long way from the time when it was
first thought that the brand was just another word for
Logo.
 It is widely appreciated that brand is one of the most
valuable asset an organization owns.
 Organizations spend large amount of money, efforts
and time to build a brand. Once established, they
receive returns from the brand on a long term basis.

4. Meaning of Brand Valuation
 Brand Valuation can be defined as the process used to
calculate the value of a brand or the amount of money
another party is willing to pay for it or the financial
value of the brand.
 The ISO standard sets out the process of valuing
brands and sets out six key requirements:-
transparency, validity, reliability, sufficiency,
objectivity and financial, behavioral and legal
parameters.

5. Need for Brand Valuation
 A brand can be valued anytime and for many reasons,
that includes – Brand strategy, Financial reporting,
Mergers and Acquisitions, Value reporting, licensing
and so on.
 Several studies have tried to estimate the contribution
that brands make to shareholder value.
 On an average brands account for more than one-third
of shareholder value.

6. Methods of Brand Valuation
1. Traditional Approach
a) Cost based Approach
b) Market based Approach
c) Income based Approach
2. Research Based Approach

7. 1. Traditional Approach
a) Cost Based Approach
 Determined by considering the aggregation of all historic costs
incurred or replacement costs required in bringing the brand to
its current state.
 Major draw back is difficulty in identifying the costs involved
and separating them from marketing expenditure which was
responsible for brand building.
b) Market Based Approach
 Based on present and generally accessible market conditions,
which concern information about transactions with the
participation of comparable brands
 Standard parameters used like earnings, profit, book value .
c) Income Based Approach
 Most commonly used method.
 Focus on Present Value of the economic benefits which brand
shall generate in the future.

8.  Relief from Royalty Method:-
 Value is determined in relation to the royalty rate that would be
payable for its use where it owned by a third party.
 Premium Price Method:-
 Estimates value by the premium it generates when compared to a
similar but unbranded product or service.
 Incremental Cash flow Method:-
 Identifies cash flow generated by the brand in a business, by
comparison with comparable business with no such brand.

9. 2. Research Based Approach
 Valuation of brand is done by using consumer behavior
and attributes that have an impact on the economic
performance of the brand.
 Includes wide measurement tools such as levels of
awareness, knowledge, familiarity, satisfaction,
recommendation and so on.
 These attributes are given different brand score, the
sum of these score assigned to different attributes
provide the overall brand score.

10. Conclusion…..
 Brand is a name, a term, a sign, a symbol, a design or a
combination of any or all of them that marketers use
to convey the identity of its goods or services to
customers and differentiate its own products/ services
from those marketed by others.
 Brand influences the choices of customers, employees,
investors and government authority,
 Brand valuation is not considered as a mainstream
practice but instead a niche.

11. Thank You……