Beginner’s Guide to Brand Value

Beginner’s Guide to Brand Value

Introduction to brand value

The sale or replacement value of a brand is simply its brand value. This definition may be useful to investors and those who need to include a “goodwill” word on the balance sheet’s right-hand side. An accounting entry like this captures the net present value of long-term value created by brand assets investments. It’s worth noting that having such an entry in the balance sheet allows managers to treat brand-related charges as investments with a long-term payoff rather than expenses.

Are brand value and brand equity the same?

If you think of brand value in terms of dollars and cents, you’re partially correct. Customers are willing to pay extra when they are familiar with and adore your brand. This is referred to as brand equity. In other words, brand equity is the price that consumers are ready to pay over the product’s market worth. Although brand equity and brand value are related, they are not the same thing.

The importance of brand value

Assume you’re in the middle of a large brand purchase or merger. You’d be purchasing a lot far more than the formula for a carbonated cold drink if you took over Coca-Cola. You’d gain from the name, logo, and other brand aspects that customers identify and trust right away. Brand value is a relatively new concept. Consumers used to base their purchasing decisions on product value and quality. During the 1960s advertising boom, certain corporations became household names. Companies can now choose to connect themselves with positive attributes such as style, elegance, trustworthiness, security, and innovation, thanks to the advent of modern marketing. This is essentially the process of creating a brand, which is an important part of any marketing plan nowadays. Almost everyone believes that a strong brand is valuable; the tough part is putting a monetary value on it but the top branding agency in Malaysia can assist you with it. 

How to measure brand value?

Because of today’s recognition of brands’ power, there is a lot of thought especially if you are doing property business and, as a result, a lot of different viewpoints on what makes a brand successful, how brands interact with consumer psychology, and even the actual definition of the brand should be. As a result, without a clear strategy in mind, determining brand value can be complicated. However, the most basic methods of determining brand value are still relatively easy. Asking other firms what they would pay for the rights to your brand is one of the most basic techniques. This will provide you with a variety of statistics from which you can average to arrive at a fair market value. You can also get quotations from vendors or do internal predictions to see how much it would cost to create a brand that is similar to your current one.

What qualifies a brand to be valuable?

There are a few things that all valuable brands have in common. A brand is valued if it satisfies the following criteria:

  • Immediately recognisable (people know who they are)
  • Regarded favourably (people have a good view of them)
  • Well-liked (people actually buy and use the products or services
  • Have a dedicated following (Customers serve as brand advocates)

Kevin Larson

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