Intangibles - brands

Brand is one of the "intangibles" that are hard to evaluate.

Came across this "Best 100 Global Brand" report in Business Week’s website.

We can get a glimpse of how brand can be evaluated from its ranking methodology.
This is one of the many ways to evaluate value of "brand".
evaluate "brand"

Step 1
Calculating how much of a company's total sales falls under a particular brand.
Projects five years of sales and earnings tied to each brand's products and services.

Step 2
Calculating how much of those earnings results from the power of the brand.
Strips out operating costs, taxes, and charges for the capital employed to arrive at the earnings attributable to intangible assets.
Estimates the brand's effect on earnings relative to other intangible assets such as patents and management strength.

Step 3
Future earnings are discounted against current interest rates and also against the brand's overall risk profile (to factor in brand strength) to arrive at a net present value.
Factors include market leadership, stability, and global reach—or the ability to cross both geographic and cultural borders.

Some "insights":
1.The same method should be applicable to evaluation of other intangibles too, for e.g patents, management strength etc.

2.Factors mentioned in step 3 is applicable to brands. To use the same method for other intangibles, other related factors are to be used.

3. We can learn ways to evaluate intangibles and related factors to use from methodology of ranking/index. Besides this ranking of brands, also mentioned in previous posts are WEF Financial Development Report and socio-economic risk.

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