Criteria for 'brand power' rating includes growth rates, market share, history, price premiums, brand awareness & consideration as its bases. It is a composit measure of the brand's ability to continue earning the branded revenue streams it commands, both at present & in the future. Thus, a brand that has a high value does not necessarily have an equally high power rating. |
Valuations were undertaken by Brand Finance, by using the 'relief from royalty' methodology - an intuitive approach that assumes a company does not own its brand name, & calculates how much it would have to pay to license it from a third party. The present value of that stream of (hypothetical) royalty payments represents the value of the brand. The 'relief from royalty' methodology is used for two reasons. Firstly, it is the basis of valuation favoured by tax authorities & the courts in many countries, because it calculates brand value by reference of third-party transactions that are documented. Secondly, by utilizing this method, the exercise can be performed on the basis of financial information that is made available to the public. The 'brand value' (trademark value, in many instances) is the value of the asset at a certain point in time, computed by adopting this methodology. This, in fact, is the value that the brand is creating for its proprietors today. It is not an attempt to estimate the cost of replacing its worthy by someone else, nor does it represent what has been expended to create it. LMD 2005 |
