There are several standards for establishing the calculation of how much a brand is worth. This information will be of interest to those who are going to sell a company or plan to evaluate the capital of their own trademark.
Let's look at the most famous model created by the Young & Rubicam agency – Brand Asset Valuator.
When you need to know the value of a brand
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According to this methodology, it is possible to describe the market position of any company, regardless of the brand's product category, country of origin or age of the organization. Brand Asset Valuator focuses on 4 criteria, known as brand pillars:
Differentiation – distinctive characteristics that make consumers choose a particular company. Measured by uniqueness achieved by brand promises.
Significance is the perception of a brand by consumers and the extent to which a company meets the needs of its target audience. Significance is measured using the 4P model and is an indicator of a company’s presence in the market.
Respectability is the level of an organization's reputation in the market and customer loyalty. This criterion reflects the degree to which the promises made by the brand are fulfilled and is related, in particular, to the quality and popularity of the product.
Knowledge is the depth of understanding of a brand and the experience of customers interacting with it.
Metrics for these criteria are determined through customer research, and the results are superimposed on a 4-dimensional model that reflects the brand's level of development, scale and strength.
Brand strength is determined based on differentiation and relevance data, and scale is determined based on respect and knowledge metrics.
Thus, the Brand Asset Valuator model identifies 4 main variations of a company’s position on the market:
New brand or end of life – this position band data package is occupied by a company that has just entered the market and has not yet developed, or a company that is at the end of its life cycle. In this case, all 4 parameters are at a low level.
Unrealized Potential – This place is occupied by brands with clearly organized and unique modern characteristics that have gained significance among the target audience, but have not yet reached a high level of respect and knowledge.
Leadership is the location of brands with high visibility across all 4 dimensions.
Declining Potential – refers to trademarks that are losing their uniqueness and relevance in the market, but still have great respect and knowledge.
Brand Asset Valuator corresponds to the life cycle model of an organization that enters the market with a new product and takes the leading position. Then competitors appear, producing similar or alternative products, and the company gradually declines. As an example, a pager manufacturer will do - an entire industry that has gone through a full life cycle from growing popularity to complete oblivion due to the appearance of the first mobile phones.
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Of great importance for determining how much a brand is worth is the model of Professor David Aaker (USA), a specialist in the field of marketing, advertising and branding. In this model, the value of a trademark is defined as 5 types of assets and liabilities of brands, which together increase or decrease the value of a product for a company or consumer: brand loyalty, awareness of it, perceived quality by consumers, associations with the brand and other assets (distribution channels, patents, etc.).
In addition, Aaker particularly emphasizes the importance of the concept of brand personality (the unique associations customers have with the essence of the brand and its promise). Aaker has taken branding to a whole new level of understanding. Indeed, it has become a differentiation criterion in the Brand Asset Valuator methodology.
Brand Value Models
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According to Aaker, individuality includes 12 dimensions, which are combined into 4 groups:
Brand product (essence of the product, characteristics, quality/value, range of use, users, country of origin).
Brand organization (organizational characteristics, local/international).
Brand personality (brand character, brand relationship with the consumer).
Brand symbol (visual images/metaphors, brand traditions).
Aaker believes that a brand's personality can be either core or extended. Core is the primary, permanent essence of the brand, which is likely to remain the same as it expands into new markets. Extended personality is the collection of different details that are grouped together.
In addition to the above models, there are a number of other methods often used to determine brand value, including Interbrand, Brand Finance, NeedScope, BrandZ, Brand Value Creator, etc.
It is safe to say that there is no universal model for assessing brand equity. This process does not come down to a simple calculation or comparison of debit and credit. A trademark in which 1 million rubles were invested may be worth much more than a brand in which 1 million dollars were invested.
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