Brand Valuation refers to a sequence of steps which contribute to assessing the brand value or in other words the amount of money which another company is ready to pay for it. It is thus the financial assessment of the brand. The brand is comprised of various tangible and intangible elements linked to the company like culture, positioning, messages or communication, style, value proposition etc.
There is no standard method to measure brand value and every company has a different model. There are three primary types of approaches to determine the same. They are:
- The cost approach
- The market approach
- The income approach
- The brand value goes up if the company is legally registered or other legal protection. Companies also consistently follow as a suitable procedure in their balance sheets to analyse and compare the brands. Although it is a complicated process but is useful for tax and loan purposes, planning for sale, mergers &acquisitions, JVs, etc.