Brand equity is defined as the value of the brand, based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations and other assets such as patents, trademarks and channel relationships.
Not always incorporated into the balance sheet asset valuations.
Interbrand , the branding consultancy utilise the estimated economic earnings; which is equal to the brand’s future operating profits minus a capital and tax charge, as the valuation method for brands.
However, this does not measure future growth and thus the following marketing insight illustrates other methods:
Branding is costly and time consuming and in an effort to short circuit the process, some organisations seek licensing agreements for big brands especially in emergent markets.
The fastest growing licensing category is corporate brand licensing , a form of licensing whereby a firm rents a corporate trademark or logo made famous in one product or service category, and uses it in a related category.
Firm develops two or more brands in the same product category.
Establishes different features and appeals to different market segments and buying motives.
Some companies develop multiple brands for different families of products. This is called range branding and is illustrated by the Matsushita Group with its ranges of Technics™, National™, Panasonic™ and Quasar™.
In corporate branding the firm makes its company name the dominant brand identity across all products, e.g. Johnson & Johnson ™ .
Other companies use the company and individual branding approach, e.g. Nestl é KitKat™.