Ascertaining the ‘Brand Strength’ of a product

The methods of brand valuation would depend on one or more of the following variables:

·        Exclusive earning power of brand.

·        Product as a brand and hence, product life cycle.

·        Separating a brand from other less important value drivers

·        Cost of acquisition of brand.

·        Expenses incurred on nurturing a home grown brand.

·        Impact of other brands as new entrants to the market.

·        Intrinsic strength of the people and process handling the brand.

·        Accuracy in projecting the super or extra earnings offered by a brand and rate of

discounting such cash flows.

·        The cost of withdrawing or replacing the brand.

·        Internationalization of a brand and therefore, local earning power of a brand in

various countries or markets.

Several approaches have been evolved over a period of time for determining the value of brands. These models lay emphasis on ascertaining the ‘Brand Strength’ of a product or service of a corporate entity, which is defined as the sum total of all benefits flowing from different dimensions of a brand such as quality of market leadership (ML) of the brand, relative stability of market (SM) enjoyed by the brand, the extent of market share (MS) of the brand, the levels of international acceptance (IA) of the brand, ability of the brand to meet the changing modern marketing trends (MT), the extent of strategic support (SS) provided by the brand to the corporate’s survival and growth, competitive strength (CS) offered by the brand and above all the legal and social brand protection (BP). Thus, the brand value/strength can be stated as follows :

Brand value = (ML + MS + SM + IA + MT + SS + CS + BP)

ML = Market Leadership

MS = Extent of Market Share

SM = Stability of Market

IA = Levels of international acceptance

MT = Ability to meet the changing modern marketing trends

SS = Extent of Strategic support

CS = Competitive strength

BP = Social Brand protection