Global Branding Forum @ Sophia Univ
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Managing Director of Brand Finance Japan, Jun Tanaka explained the significance of Brand Valuation at the core of Brand Strategy.
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Global Branding Forum @ Sophia Univ
- 1. 1. Global Branding Forum Oct 2019 BRAND FINANCE - WE HELP CONNECT MARKETING TO FINANCE Mr. Jun Tanaka, Managing Director, Brand Finance
- 2. 2. A strong brand drives a larger, more profitable business In turn, higher business returns allow investment which drives a more valuable brand • Our analysis demonstrates that strong brands tend to deliver superior business performance: Since 2007 the stock market performance of the businesses behind Brand Finance’s top 10 most valuable brands have outperformed the S&P 500 by 41% • Strong brands provide buoyance to the business during the times of crisis and serve as a launching pad for growth during the periods of prosperity 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Brand Finance Top 10 vs. S&P 500 (Jan 2008 – Jan 2017) Top 10 BV/EV S&P 500 +98% +57%
- 3. 3. Stakeholder Effects Business Value Drivers Customers • Greater sales volumes • Price premiums Revenue & Costs Suppliers • Lower prices • Better terms • Greater willingness to partner Costs Staff • Lower recruitment costs • Lower retention costs Recruitment Costs Training costs Financiers • Lower borrowing costs • Better repayment conditions • Higher price earnings ratio Cost of Equity Cost of Debt Regulator • More invitations to tender • Greater propensity to award Revenue Long term growth Media • Influencing the attitudes of direct stakeholders Revenue Public • Influencing the attitudes of direct stakeholders Costs of Public action Brand&Businessvalue DirectIndirectBrand affects a wide range of stakeholders Each can have a direct or indirect impact on the business
- 4. 4. ● History of Brand Finance Brand Finance was set up in 1996 to bridge the gap between marketing and finance and is now present in over 20 countries worldwide, with its headquarters in London. There are approximately 100 staff worldwide, of which 50 are in London. The team includes experts in finance, market research, marketing, intellectual property law and communications. Brand Finance is a private company and is entirely independent from large financial or marketing related businesses and is therefore entirely independent. Brand Finance has contributed throughout its history through its development of accounting standards, valuation standards and training of clients and others in these disciplines. Brand Finance Plc CEO David Haigh
- 5. 5. We offer impartial advice based on multidiscipline expertise and technical credibility We are headquartered in London We are present in over 25 countries We help connect marketing to finance Since 1996 we have been helping marketers make brand strategy decisions and develop robust business cases by connecting marketing information about brands to the bottom line. Our advice is impartial We are able to offer you an impartial and independent service to give confidence to both internal stakeholders and external audiences. We offer a unique combination of expertise We possess a unique combination of marketing, research, management and financial expertise, as well as ex-client side senior management. We offer technical credibility We have contributed to the development of leading edge brand valuation, brand equity research and brand reporting techniques globally since 1996.We are members of the International Standards Organisation and Marketing Accounting Standards Boards’ initiatives to improve valuation analysis and reporting around brands.
- 6. 6. Brand Valuation is now a professional discipline… FRS10 - Intangible Accounting RHM - “Creative Accounting” FAS 141 Intangible Accounting IFRS 3: Intangible Accounting IAS 38: Intangible Assets IAS 36: Impairment Reviews IVSC Valuation Standards ISO 10668 Brand Valuation IFRS 13 Fair Value Assessment OECD Transfer Pricing for Intangibles ISO 20671 Brand Evaluation 1998 2001 2004 2008 2010 2012 2010 - 2016 2019
- 7. 7. Brand affects a wide range of stakeholders Each can have a direct or indirect impact on the business Customer Brand Perceptions affect • Price • Volume • Repeat • Share of wallet • Cross sell External Audiences Brand Perceptions affect • Distribution terms • Channel access • Strategic alliances • Deal completion • Licensing • CSR Staff Brand Perceptions affect • Recruitment • Retention • Recommendation • Morale • Staff costs Financial Audiences Brand Perceptions affect • Interest spread • Share price • Debt/ Equity ratio • Risk appetite • Cost of borrowing Potential Customers Existing Customers Influencers e.g. Media Trade Channels Strategic Allies & Suppliers Investors Debt providers Sales Production All Other Employees Middle Managers Directors Brand