A difference of opinion. Choose wisely, and a brand valuation exercise can help you unlock growth for your business. But with so many differences in brand. Applications for brand valuation. Interbrand’s brand valuation methodology seeks to provide a rich and insightful analysis of your brand, providing a clear picture. Brand. Brand Name. Region/Country. Sector. Change in Brand Value. Brand Value. Apple. The Americas. United States. Technology. +3%. , $m.
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The subject who is truly loyal to the Chief Magistrate will neither advise nor submit to arbitrary measures. The following is an excerpt from Best Canadian Brands A Ranking by Brand Value.
How Interbrand measures brand value – The Globe and Mail
The report was published by Interbrand, in conjunction with Report on Business. Brand value is the Net Present Value NPV or today’s value of the earnings the brand is expected to generate in the future. This valuation approach is a derivative of the way businesses and financial assets are valued.
It fits with current corporate finance theory and practice. Interbrand identifies the revenues from products or services that are generated with the brand. From these Branded Revenues we deduct operating costs, applicable taxes and a charge for the capital employed to derive Intangible Earnings. This is ijterbrand prudent and conservative approach as it only rewards the intangible assets after the tangible assets have received their required return.
Based on reports from financial analysts we prepare a forecast of Intangible Earnings for 6 years. Since Intangible Earnings include the returns for all intangibles employed in the business, we need to identify valuatiion earnings that are specifically attributable to the brand.
Through our proprietary analytical framework called Role of Lnterbrand we can calculate the percentage of Intangible Earnings that are entirely generated by the brand.
In some businesses, e. However, in other businesses in particular b2b the brand is only one purchase driver amongst many and the Role of Branding is therefore lower. In the case of Shoppers Mart people buy not only because of the brand but also because of the location of the stores.
We have for each of the brands and categories assessed the Role of Branding. In situations where the brand is used across a variety of businesses, the Role of Branding figure was assessed for each core business segment. The Role of Branding is a per cent – thus if it is 50 per inherbrand, we interbrannd 50 per cent of the intangible earnings as Brand Earnings.
If it is 10 per cent, we take only 10 per cent of the earnings. For deriving the NPV of the forecast Brand Earnings, Interbrand uses a discount rate that represents the risk profile of these earnings. There are two factors at play: Firstly, the time value of money i. The discount rate represents these factors as it provides an asset specific risk rate.
The higher the risk of the future earnings valuatiob the higher baluation be the discount rate. To derive today’s value of a future expected earnings stream it needs to be ‘discounted’ by a rate that reflects the risk of the earnings actually materializing and the time for which it is expected.
The assessment of Brand Strength is a structured way of assessing the specific risk of the brand.
The ideal brand is virtually ‘risk free’ and would be discounted at a rate almost as branv as government bonds or similar risk free investment. The lower the Brand Strength the further it is from the risk-free investment and so the higher the discount rate and therefore the lower the net present value.
Using the edition of Report on Business’ Top list of the largest publicly traded Canadian corporations, Interbrand formed an initial consideration set of brands owned and operating in the country.
Published annual reports and analyst reports from multiple investment banks were used to examine the revenues, earnings and balance sheets of the brand-owning companies. The basis for the marketing assessments Interbrand’s experience in creating and managing brands over 30 plus years has created brand metrics that consider: Our expertise was supplemented with press articles, analysts comment and syndicated market research.
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How Interbrand measures brand value
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