Whats the significance of brand value, especially in emerging markets like India?
Brand is the most stable asset for a business. It usually doesn’t disappear overnight unlike other supposedly stable assets (consider real estate price in Japan, which is now only 10 per cent of what it was in the ’80s). Of course, there are exceptional situations like in the case of Andersen where it vanished in a week. Brand value becomes important when competitive forces come into play. It perhaps has no relevance in a monopoly situation. If branding is about ensuring security of demand for any business, then how do you value a brand? Brands can be valued like other business assets. It is based on a reward and risk calculation. We do a financial analysis (taking into account EV, NPV, ROI, net sales, marketing expenses, operating profit and capital employed) to find out rewards and follow it up with a market analysis (covering market size, share, sales volumes, awareness, preference, loyalty and share of voice) to discover the brand’s ability to factor in the risk elements. We then a
