How to Calculate the Value of a Brand? The Price Premium Method




Brand Valuation
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Sarah Daghman
Lecturer, Russian Federation

How to Calculate the Value of a Brand? The Price Premium Method

Brands and brand valuation are of primal importance for marketing purposes and for increasing the profits and market value for the company owning the brands. They allow strategic brand management and financial transactions. There are several direct and indirect methods for measuring the value of a company's brand. Below I would like to discuss one of the most frequently used methods with you: The Price Premium method. The Price Premium Method It is normally assumed that a "branded product" generates an additional (perceived) benefit for consumers, for which they are willing to pay (a little) extra. As a result the product with the brand can be sold for more than a similar "non-branded product". The brand adds value to the product. This added value can be measured with the Price Premium Method. To determine the brand value in this way you must follow these steps: Choose a "branded product" and a similar "non–branded" product; Define the price difference between them; Deduct...
 

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1
Meheresh
Management Consultant, India
 

Absence of non Branded Products

This method is useful when a product is available in at least two options - a branded product and a ...

 
2
Sarah Daghman
Lecturer, Russian Federation
 

Methods to Evaluate the Brand Value

@Meheresh: As you mentioned there are many methods to calculate the value of a brand such as: Th...

 
1
Gautam Mahajan
CEO, India
 

How Important is the Brand

If we can measure the importance of the brand, and measure the value it creates for its customers ve...

 
1
rustenburg
Business Consultant, Netherlands
 

Compare the Branded Product with the Direct Competitor

Start with the right starting points, e.g. comparable products brands in comparable markets: iPhone ...

   

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