10_m603F10rb_valrevitcapsimplem

10_m603F10rb_valrevitcapsimplem - Valuation Capstone...

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Unformatted text preview: Valuation, Capstone, Implementation, Revitalization 1 STRATEGIC BRAND MANAGEMENT Flow of Course Topics When Does Brand Equity Create Value? • Why brand equity can pay off • Conditions and reasons for brand equity pay-off What makes Brands “Strong?” • Learnings from the best brands • Research Evidence • A framework and road map Building Brand Equity • Element-by-element: Aw, PQ, Ass, L • Strategic planning and targeting: • Customer © Rajeev Batra 1 • Competition • Company • Tools, Tactics, Cases • Business-to-Business • Services Brand-Building Leveraging Brand Equity (ROI) • Brand extensions for growth; Global • Brand Architecture • Guarding and monitoring the brand • Brand valuation issues Valuing Brand Equity © Rajeev Batra Rajeev Batra Ross School of Business University of Michigan Valuation, Capstone, Implementation, Revitalization 2 Brand Valuation: Why and How • Why Value Brand Equity? © Rajeev Batra 3 • How Value Brand Equity? © Rajeev Batra 4 Valuation, Capstone, Implementation, Revitalization 3 * China China, India, Turkey: Lenovo, Jaguar, Godiva Valuation, Capstone, Implementation, Revitalization 4 Valuation, Capstone, Implementation, Revitalization 5 Brand Valuation: Why – Buy and Sell Brands as Separable Assets – Several X of balance sheet value (Kraft: GF) Value same to all buyers? (P&G: Iams – Value same to all buyers? (P&G: Iams) – Track/Report as Balance Sheet Asset – UK: can place own brands on balance sheet, not in US – Rank Hovis McDougall, valued by Interbrand, 1988 – US: Place acquired goodwill, annual re-valuation, writeoff when impaired (TW: AOL 2002 $54bn.) – New IASB rules require valuation of specific intangible assets © Rajeev Batra 9 – Compute Return on Marketing Investment – Change as % of $ Invested in Advertising, etc. Brand Valuation: How • Financial Methods (details in next slides) – Market Valuation Method + / -? – University of Chicago Method ¡ EV - Tangible = Intangible – Patents = Brand – Royalty Relief Method – Historical Cost Method Price Premium Method © Rajeev Batra 10 – Price Premium Method – Brand Margin Valuation and DCF Estimation – Interbrand: “Existing Use Method ….” Valuation, Capstone, Implementation, Revitalization 6 Detail Slides on Brand Valuation © Rajeev Batra Market Valuation Method • Base on selling price of other similar traded brands • “Objective,” “market-based,” “up-to-date” – Not based on estimates, judgment, projections • Uses both revenue gains and cost reduction – Not just “price premium” • Hard to find equivalent brands © Rajeev Batra 12 • Most trades include other assets as well • Value paid depends on specific buyer, may not apply to others (P&G Iams $700mm) Valuation, Capstone, Implementation, Revitalization 7 Royalty Relief Method • Most common method in U.S., liked by accountants • What royalty rate if brand name licensed?...
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This note was uploaded on 02/09/2012 for the course MKT 303 taught by Professor Rajeevbatra during the Fall '11 term at University of Michigan.

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10_m603F10rb_valrevitcapsimplem - Valuation Capstone...

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