bravo - the benefits
There are various reasons why companies choose to measure the value of their brand or brands. Some companies publish the results and some keep it confidential and for internal use only, others will benefit from sharing the results with a wider, external audience. Below are some of the main benefits to business but each case and need is different and many more hidden benefits exist beyond this:
increasing asset value
Inclusion of brand value as an intangible asset gives a more realistic picture of a business’ true value.
Improving market rating
An independent assessment of brand value can be used to promote the true worth of the business to stakeholders and analysts - leading to an improved market rating.
valuing acquisitions and disposals
Brand valuation can be used to negotiate with, or fend off, potential buyers. One relatively well-known example is when, in 1988, Rank Hovis McDougall (RHM) successfully defended itself against a takeover bid from GFW by including its brand value on its balance sheet at £678 million, and arguing that the GFW offer undervalued the brand portfolio. Use of brand valuation can also help a company value mergers and acquisitions and assess the overall impact on group value.
Measurement of a company’s brand value, along with that of its competitors, allows direct comparison and benchmarking. This could improve a company’s market rating and long-term shareholder value, as well as foster a better appreciation of the financial implications of marketing and brand development.
value-added decision-making
Calculating brand value can identify the likely impact of management decisions, and highlight what a company could/should do to improve brand performance and hence brand equity. A more ‘brandcentric’ view will help a company maximise the strategic value of its brand in the long-term.
reducing the cost of finance
Other things being equal, a positive brand valuation can boost significantly the total asset value of the business, thereby reducing “gearing” and the cost of borrowing.
For further insight into how this model would apply to your brand(s) please call us on 020 7317 2770 or email info@valueyourbrand.com to set up a meeting now.
