What are the components that influence brand value?

What are the components that influence brand value?
The most important components which influence brand value of the services and products which have been assigned parameters when compared to other services and products can be summarized as such:

• Global, national, local audience
• Ease of sale,
• Preferability,
• Premium pricing or having better marketing conditions.

The fact that a product Brand A is being sold for x TRY and one month in credit compared to Brand B which is being sold for x TRY and three months of credit proves that Brand A has a better contribution to the company and is stronger than Brand B.
For a wealthy company with a good brand, good product and marketing strategies will significantly increase operation profit. This situation will benefit both the product’s and the company’s market value.

Which subjects does the brand valuation report include?

Brand Valuation, or efforts which identify the market value of a brand, cover the generally accepted notions of reporting.
The data can be summarized as such:
Information specific to the company/brand: The product and service providing capacity of the company/brand, pricing and market shares
Industry information: The analysis of the industry in which the brand is located, the qualitative analysis and pricing policies of brands, the competitive conditions in the nations or districts in which the brand is influential.
Information regarding the external environment: Parameters which influence brand exchange information, license rental, franchising, the economic situation of the country, expectations of growth, national/international royalty ratios.

In addition, the report regarding brand identification should at minimum include the components below:

• With the inclusion of risk analysis the hypotheses should be transparent.
• Data valid through the valuation period must be used.
• The models used should provide secure, comparable and agreeable solutions.
• Appropriate, financial, behavioral and legal parameters should form the basis of the value.
• The report including data from the valuation period must be prepared unbiased and independently.

Is there a formula for estimating brand value?

There are many accepted methods for estimating brand value, but a standalone formula does not exist. Experts who estimate brand value usually conduct extensive research and inspection. They take into consideration all parameters which affect value; company, brand, industry, market share, factors specific to the market and the national economic data are all accounted for and are calibrated in the fashion of a tailor rehearsal.

The performance of a brand in early years and the projection of it for the future demands importance. The future performance of the brand is affected by developments such as the constant change of needs and the inventions of new products and services. Therefore it is possible, in a sense, to talk about the economic lifespan of the brand and conduct certain analyses for it.

Do brands owned by franchising companies use the same methods for valuation?

Yes, intangible rights are generally valued with similar methods.

Are brand valuation methods the same for every brand?

For companies/brands which use franchising or trademark revenue models, the royalty method is more suitable, whereas for brands which have premium pricing compared to their competitors the premium pricing method could be more suitable.