The Brand (Value) Valuation Process
To know the exact value of a brand there are several factors that has to be looked into. The following steps have to be taken when doing brand valuation. Consider market Segmentation brand, financial analysis of the brand, demand analysis of the brand, and competitive bench marking of the brand
Branding influences the consumers purchasing habits, and well known brands will sell faster than less known brands
Market Segmentation of the brand – brands performs well in different markets and when evaluating your brand, it is very important to segment the market by splitting the brands market into non-overlapping and homogeneous (harmonized, identical, standardized, consistent, uniform, all the same) market of consumers.
Market segmentation is done following some steps and criteria including product and services, brand distribution channels available, customers purchasing patterns of the brand, purchasing sophistication (complexity, cleverness, superiority, difficulty, style, classiness), market geography, existing and new customers, customer’s preference etc. after splitting the market segment, you value your brand each segment and the total segment brand valuation will add up to the value of the brand
Financial analysis of the brand – after doing market segmentation evaluation one has to do financial analysis by identifying and forecasting the revenue and earnings from intangible generated by the brand. The easiest step to calculate the intangibles earning by computing brand revenue and deducting all operating costs including taxes, and capital employed
Demand analysis of the brand – the demand analysis will help find the role brand has played to drive demand for the product and services in the selected market where brand are being sold. During demand analysis all process that drive demand to the brand are identified and determined to what degree each driver has contributed to the brand demand
Competitive bench marking of the brand – brand valuation involves competitive bench marking which determine both strength and weakness of the brand. This brand valuation analysis also involves the evaluation of the brand’s market, brand stability, brand leadership position, brand growth strength, brand support
Brand valuation is used as a strategic tool to identify and maximized your return on brand investment, brand valuation also helps in financial planning, legal advice and any other transaction needed to be done on the brand like acquisition and mergers. Brand valuation helps identify brand values in their market hence need not to be ignored, brand valuation helps compare your brand with other companies assets and its competitive advantages
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