Brand Valuation Methods and Strategies

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BRAND VALUATION METHODS AND STRATEGIES

Presented By, Pradeep Choudhary Omkar Palsuledesai Vijay Gopalakrishnan

BRAND VALUATION METHODS


These can be broadly classified into:

Cost based Income based Market based

COST BASED METHODS

Book value

Replacement value Liquidation value

1.Book value method


Current cost valuation All assets are taken at current value and summed to arrive at value This includes tangible assets, intangible assets, investments, stock, receivables

VALUE = ASSETS - LIABILITIES

2. Replacement value method


Cost of replacing existing business is taken as the value of the business

3. Liquidation value method


Value if company is not a going concern Based on net assets or piecemeal value of net assets

INCOME BASED METHODS


Earnings capitalization method.

Discounted cash flow method (DCF)

1.Earnings capitalisation method


This method is also known as the Profit earnings capacity value (PECV) Companys value is determined by capitalizing its earnings at a rate considered suitable

2.Applicability of DCF method


Cash flow to equity
Discount rate reflects cost of equity

Cash flow to firm


Discount rate reflects weighted average cost of capital

Limitations
Companies in difficulty
Negative earnings May expect to lose money for some time in future Possibility of bankruptcy

MARKET BASED METHOD


Also known as relative method Assumption is that other firms in industry are comparable to firm being valued Standard parameters used like earnings, profit, book value Adjustments made for variances from standard firms, these can be negative or positive

Applicability
Simple and easy to use Useful when data of comparable firms and assets are available

Limitations
Easy to misuse Selection of comparable can be subjective Errors in comparable firms get factored into valuation model

Brand Strategy
Step of brand strategys success is to check Where Brand CAN & CANNOT Go.

Steps in Brand Strategy


Branding Vision Brand Positioning Brand Personality

Types of Branding Strategy


Product Branding Product-line Branding Product range Branding Corporate Branding

Integrated Communications Strategy

Current Beliefs

Message

Desired Belief

Current Actions

Desired Actions

Points of Parity and Difference


Consumers

Brand

Our PODs

POPs

Their PODs
.

Competition

Brand Strategy and Marketing Strategy


Brand Strategy is an integral part of the overall strategic marketing process. It helps to bridge the gap between business strategy and marketing strategy. Strategic Marketing Process

Brand Strategy is separate from the 4Ps. It guides and inform decisions about every aspect of the marketing mix.

I. Corporate Objectives & Brand Portfolio II. Marketing Objectives III. Brand Strategy
Communications Strategy Product and Pricing Strategy Channel and Distribution Strategy

IV. Marketing Execution & Monitoring

Brand Pyramid
The purpose of the brand equity pyramid is to outline the basic building blocks of a what the brand should stand for in order to guide the process of building brand equity. It is the basis for determining key elements of the brand strategy brand vision, brand positioning, and brand personality and brand measurement.

Relationship

Resonance

Response

Consumer Judgments

Consumer Feelings

Meaning

Brand Performance
Identity

Brand Imagery

Salience

Brand Personality
The purpose of brand personality is to ensure a brand behaves in a way that is consistent with its values in order to increase its appeal and create greater affinity with its target. Brand personality can also help to differentiate a brands imagery relative to competitors.

Brand Elements
Brand Name Brand Logos and Icons
Colors Symbols Music/Earcons

Celebrities or Personalities Advertising slogans and jingles Brand Alliances/Secondary Associations


Co-branding Licensing Sponsorship Event Marketing Celebrity Endorsement Third-party Endorsements

THANK U all Friends

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