Brand valuation methods and strategies

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BRAND VALUATION METHODS AND STRATEGIES Presented By, Karthik.R Kirthika.A Manikandan.V

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Transcript of Brand valuation methods and strategies

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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

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2. Replacement value method

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

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3. Liquidation value method

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

assets

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INCOME BASED METHODS

• Earnings capitalization method.

• Discounted cash flow method (DCF)

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1.Earnings capitalisation method

• This method is also known as the Profit earnings capacity value (PECV)

• Company’s value is determined by capitalizing its earnings at a rate considered suitable

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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

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Limitations• Companies in difficulty

– Negative earnings– May expect to lose money for some time in

future– Possibility of bankruptcy

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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

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Applicability

• Simple and easy to use• Useful when data of comparable firms and

assets are available

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Limitations

• Easy to misuse• Selection of comparable can be subjective• Errors in comparable firms get factored into

valuation model

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Brand Strategy Step of brand strategy’s success is to check

“Where Brand CAN & CANNOT Go”.

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Steps in Brand Strategy

Branding VisionBrand PositioningBrand Personality

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Types of Branding Strategy

• Product Branding • Product-line Branding• Product range Branding• Corporate Branding

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Integrated Communications Strategy

Current Beliefs

Current Actions

MessageDesired Belief

Desired Actions

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Points of Parity and Difference

Brand Consumers

Competition

Our

PODs

POPsTheir PODs

.

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Brand Strategy and Marketing Strategy

Brand Strategy is separate from the 4P’s. 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

Strategic Marketing Process

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

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Brand Pyramid

Resonance

Consumer Judgments

Consumer Feelings

Brand ImageryBrand Performance

Salience

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.

IdentityIdentity

RelationshipRelationship

ResponseResponse

MeaningMeaning

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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 brand’s imagery relative to competitors.

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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

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THANK U all Friends