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Brand Valuation Techniques

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Cost-Based Valuation

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Calculates a brand's value based on the costs incurred to build the brand until the valuation date. Useful for new brands or when the cost information is readily available.

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Market-Based Valuation

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Determines brand value using market comparisons. Suitable when there are enough comparable brand transactions in the market.

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Income-Based Valuation

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Estimates brand value based on the future income streams attributable to the brand. Commonly used, especially for well-established brands with steady income.

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Royalty Relief Method

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Assesses brand value by estimating the royalty rate that would be charged for its use, then applying it to forecast future sales. Suitable for licensing scenarios.

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Price Premium Method

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Calculates additional value a company gains by selling its products under a particular brand name compared to a generic product. Best for consumer goods.

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Economic Use Method

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Estimates brand value based on the economic benefit received from its use in the business, including price premium and volume premium. Applicable to brands with significant market influence.

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Interbrand Methodology

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Combines financial forecasting with an analysis of the brand's role in purchase decisions and the strength of the brand, referred to as Brand Strength Score. Used by top global brands.

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Brand Finance Method

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Integrates the royalty relief approach with brand strength represented by the Brand Strength Index. Focus is on the brand's potential earnings.

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Conjoint Analysis

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Evaluates brand value by understanding consumer preferences and the value they place on brand attributes. Ideal for market research scenarios.

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Multiplier Method

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Applies a multiplier (often an industry standard) to a certain financial baseline, such as revenue, to estimate brand value. Quick and useful for ballpark figures.

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Excess Earnings Method

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Calculates brand value by determining the excess earnings that can be attributed to the brand over a reasonable rate of return for tangible assets. Suitable for profit-centric analyses.

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Historical Cost Method

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Values the brand based on the historical costs associated with creating and maintaining the brand. More relevant for internal accounting purposes.

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Replacement Cost Method

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Evaluates a brand's value by estimating the cost of creating an entirely new but similar brand. Useful for insurance claims.

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Relief-from-Royalty Method

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Quantifies the value of brand ownership as the present value of hypothetical royalty payments avoided by owning the brand instead of licensing it. Ideal for IP-heavy businesses.

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Greenfield Method

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Values a brand by assessing the investment needed to develop a brand with equivalent market position and reach from scratch. Applicable when benchmarking against startups.

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