It Is Difficult To Measure Financial Brand Valuation

Submitted By uzi11918
Words: 327
Pages: 2

“It is difficult to measure financial brand valuation” Critically discuss the statement and impact on the brand manager.
Define financial brand valuation.
Different methods of valuation includes
1. Cost based (historical)
2. Replacement (if re-building)
3. Potential earning (future based)
4. Market price valuation (similar brands)
Problems:
Accounting for costs, eg. expertise, personnel, advertising
Measuring awareness, image
Market price of different brands. (products – premium etc)
Impacts upon the brand manager:
Unable to analyse the current market position among the competitors
Effectiveness of their brand over the competitor brand is unidentified.
Difficulty in initiating further steps to improve the brand’s market position
(Examples)
References
1. Kapferer(1992)
2. Keller (1993)
3. Simon and Sullivan(1993)
4. Fischer, Hermann, Huber (2001)
5. Aaker (1991)
Methods of Brand valuation – Cravens and Guilding (1999)
1. Cost based approach – For this method, a brand is valued by considering the cost involved in developing the brand. The costs being incurred are actual costs associated with acquiring, building, and maintaining the brand.
2. Market based approach – future benefits associated with owning the brand are included and discounted to the present value.
3. Income based approach – This approach focuses on the future earning potential of the brand. Thus, it avoids problems relating to dependence on costs. The method requires determination of future net revenues