Brand Equity
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We all know that a brand is worth something, but exactly what is it worth?
There are a number of academic approaches being developed to this question.
There are also 2 well-known marketplace approaches:
Interbrand’s Brand Valuation Model
Y&R Brand Asset Valuator
Note: If a company has recently been acquired, its Goodwill value (price paid above tangible assets), is a good measure of Brand Equity
Brand Equity (Product)
The Question
The premium attached to a brand vs a generic in the category
Approach
Look at how much a company can charge for its products
Commentary
A simple way of estimating brand equity at a product level, by looking at pricing premiums and multiplying that across a market. Effective for established high volume businesses such as Fast Moving Consumer Gods
The Formula
Brand Equity (Product, $) = (Price of Branded Product – Price of No-Name Product) * Total units sold
Metrics: Brand Equity Methodology (Moran)
Effective Market Share (%)
Sum of weighted market shares in each market segment you operate in
Effective Market Share (%) = weighted average (Share %, all segments)
Relative Price (I)
The price of your product, divided by average price of all products.
Relative Price (I) = Your Price ($) – Avg Price, All Products in Market ($)
Durability (Loyalty Index) (I)
Percentage of repeat customers, year over year
Durability (I) = Expected Repeat Customers (#)/ Total Customers (#)
Formula
Brand Equity (I) = Effective Market Share (%) * Relative Price * Durability (Loyalty Index) (I)
Interbrand’s Brand Valuation Model
Probably the most well-known approach, partly because Interbrand publish an annual study with Business Week on the Most Valuable Brands.
The proprietary approach is to separate tangible product value from intangible brand value.
Brand Earnings = Total Earnings – Earnings from Tangible Assets.
Uses financial analysis or residual earnings forecasts, together with market analysis of the role brands played in those earnings.
Growth and discount rates are also used to calculate final brand value .
Best Global Brands 2008
Top 3 Gainers:
10. Google (43%)
24. Apple (24%)
58. Amazon (19%)
Top 3 Losers:
34. Merrill Lynch (-21%)
77. Gap (-20%)
19. Citi (-14%)
Table of Contents
Sales & Marketing
Marketing for Dummies Guides
- Marketing for Dummies
- Marketing Plan
- Marketing Strategy
- Positioning
- Differentiation
- Brand Equity
- Brand Marketing
- Direct Marketing
- RFM – Recency Frequency Monetary
- Breakeven Response Rate
- Customer Profitability
- CLV – Customer Lifetime Value
- Loyalty Program
- The 4 Ps
- The Campaign Framework
- The Marketing Budget
- The Marketing Mix
Measuring, Marketing, Metrics & KPIs
- KPI – The One Key Marketing Metric
- Marketing KPIs and Metrics
- Measuring Marketing
- ROMI – Return on Marketing Investment
- Marketing Finance
- Financial KPIs
- Market Share
- Mind Share
- Customer Satisfaction (Cust Sat)
- Net Promoter Score
- Kano Model
Online Marketing/ Digital Marketing
- CPM Advertising
- CPC Advertising
- CPA Advertising
- Click Through Rate (CTR or Click Thru Rate)
- Conversion Rate
- SEO Marketing
- SERP: Search Engine Ranking Page
- Behavioral Email
- Guerilla Marketing
