Brand Management Valuations

BRAND MANAGEMENT USING BRAND VALUATIONS

CEO's who are committed to developing and managing the value of their brands recognise that using an overarching brand valuation technique has a major upside. The 'brand' is converted from a  'cost centre' into a 'profit centre' in its own right. 

There are a number of associated benefits that also accrue from using this approach: 

• The brand becomes comparable with the other assets of the company and accordingly uses the the same economic criteria to allocate resources;

• Measures like the 'Return on the Brand (ROB)' are based on economic returns that the brand provides against the investments made in the brand. This allows marketing and business development expenses to be measured against a common standard that is used for all other investments in the firm;

• The firm is able optimise its investments, by prioritising its brands, customer segments, geographical markets,  distribution channels, products, services  etc;

• Brands can be licensed to external parties; royalty relief is measured as a return on investment;

• Brands can be licensed to an internal subsidiary i.e. make them responsible for the brands management and use by paying for the privelege;

• Brand migration strategies and measurement standards for balanced scorecards can be set; and most importantly'

• The firm can communicate the value of its brands to the market place and attract the right shareholders and investors.

Allan Rodrigues is a specialist in Earnings Valuations and in Valuations for Annual Impairment Tests and brand valuations. He is contactable at allan.rodrigues@thebusinessfarm.com.au