Many say ‘What’s in a name? It’s the deed (work) that matters’. But this is not entirel...
Brand valuation is a job of estimating the total financial value of the brand. Like a valuation of any product or self-review, a conflict of interest exists if those that value the brand also was involved in its creation.
It is defined as the word, mark, symbol, design, term, or the combination of these, both visual & oral, used for purpose of identification of some of the products or services. It is a hallmark of the shrewd businessman to commence his business valuation with the roadmap of his plans. In the course of his business, he applies the unique mark or the symbol or the word to his goods. When his consumer base rises, his goods acquires the reasonable reputation & his consumers begin identifying his goods by a unique mark or symbol or word he had so adopted, his goods earn the reputation of being the branded goods. What applies to goods also applies to services. When brands take charge of the consumers’ mind, the name of its proprietor takes a backseat. There lies the power of brands.
Just think as to how much investment a person has to make by means of money & other resources to adopt, develop & popularize a brand or the mark during a course of his business. Brands or marks are the class or classes of assets such as human resource, knowledge, etc. They create a value premium for such goods & services. Therefore, without the brand or mark, the goods or services may be addressed less. So as to market it or use these assets wisely valuing the same is crucial. However remember, the valuing a brand is the most difficult task. There isn’t any prescribed manner to value any brand. But everyone knows that the brands connect markets with the products & thereby they create value.
The Brands don’t command any value except they are able to bring cash flows to a Company that has adopted the same. With incremental cash flow growth, a value of brand rises respectively. Brands have to be constantly associated with the good quality goods & services; they require the proper showcasing & servicing & they should remain active in an appropriate market.
With the purpose to sustain valuation of the brand, there must be a continuous attempt from the Company on the following aspects:
It considers the valuation of the future net earnings that directly attribute to a brand to determine the value of a brand in its current use. A brand value using this method is the same as the present value of the income, cash flows, or cost savings actually or hypothetically due to an asset.
For the purpose of valuation of brands, it may be necessary to make a thorough inquiry into the policy & business of a company to the extent they relate to the brands. For such an inquiry, the following questionnaire may prove to be helping some of them are as follow
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