seminar
july 30,2016

Brand and company value

Brandy is now an important source of generating the value of the company and increase their potential is an essential tool for building competitive advantage of companies. However, what is the process of verifying how much the brand is worth?

While the valuations of real increasingly become a global service, the measurement of brand equity makes management much more difficult. After analyzing the Polish accounting regulations, it seems reasonable to credit the brand towards the value of intangible assets in the framework of balance sheet assets. The definition, however, permit the inclusion in this manner only the property rights. Therefore, the valuation of the brand requires considerable effort and extensive knowledge. This complicated process and you should start by answering a simple question: why measure?

Adequate motivation to perform the valuation might be forthcoming merger or takeover of the company, the division of wealth in the restructuring, the sale or licensing of the brand. Increasingly, brand managers to outsource the measurement of brand value also because of the possibility of more effective marketing management and strategic planning for the future. The reason for the entrepreneur decides on the valuation of its brand, indicating due process proceedings.

The value of the brand can be estimated by methods marketing or financial. Using the first of them, taken into account the revenues generated by the brand, which can then be corrected for the relationship with the customer identified on the basis of marketing research. This is a gross oversimplification, and because such a large role opinion contractors between years may appear large fluctuations in value.

Financial measures requires more time, but the results are more accurate. In this framework we can distinguish techniques: property, income and market. In the method, assets are analyzed incurred for brand development expenditures, such as the cost of the project, registration and promotion and advertising. The value of the brand is here determined by the size of expenditure, which would save the budget in order to obtain the benefits provided by the already existing on the market brand. Because of the problem with the selection of a cost and a time, the method has the best performance in the case of young model.

Using the techniques of income, the analysis is subjected to a number of factors, among which the most important is the impact of the brand on financial performance of the company. For example, the estimate can be made on the basis of cash flows generated by the brand confronted with the income, which could be expected, releasing a product with similar characteristics, but without the well-known logo. The expected value of the discounted rate after taking into account the risks involved.

The last group of methods of brand valuation methods are market, among which there are two approaches: transaction-based comparative (reference point for estimating represent transactions sale and purchase of similar brands) and economic value added (the subject of the study is to unit the premium price that customers are willing to pay for the product or service a certain brand).

Due to the lack of highly effective and commonly used method of brand valuation is not a solution used in the Polish economic reality on a larger scale. Estimates suggest, however, that depending on the industry and market, intangible assets can comprise from 50% to 90% of the company. Without answering the question, what is the value of our brand, there is no effective management leading to maximum use of its potential, which in turn translates into the value of the entire company.