The far
more difficult question to answer is to put an
actual number on the value of a brand, explaining exactly what factors must be
considered to determine value.
No doubt, accountants play an important role in deciding, but they cannot
and should not do so in a vacuum without collaboration from other relevant
disciplines.
To that point, just last week,
Branding Strategy Insider published an interesting piece on Brand Equity and the Center of Value. Last month
Brad VanAuken also wrote at BSI about brand value: “Ultimately, brand value
is a perception. It is a perception of the
ratio between benefits and cost.”
“The vast majority of products that are sold are treated as generic by just
about everyone except the naive producer, who believes he has a brand of
value.”
“If we (the user or the
observer) can’t tell who made it, then there’s no brand. That’s the
distinction between generic and specific…”
Actually, that is one more place where trademark types might differ, because in
our world, knowing who puts out a product under a certain trademark is not
required to own the legal right to exclude others. Trademarks exist even when
their owner is anonymous or unknown.
And, while the value of an underlying trademark is not necessarily
coextensive with the brand’s overall value, it must be considered, as one of
the important intangible assets forming the ultimate value of a brand.
As Brad Walz articulated here earlier this month, a
trademark strength analysis is an important consideration to determining a
brand’s value. Part of trademark strength would be the legal ability to expand the use of a brand name and
should be considered too.
In addition, the extent and validity of registered rights must be
considered. For example, if a brand owner has begun to expand with sales and
distribution overseas, and it has laid the legal foundation for not being
excluded from using the brand name in those countries (by winning the race to
the trademark office in those countries), these valuable legal rights must be considered
in the overall value of a brand.
At a minimum, it seems to me, marketing types, trademark types, and other
intellectual property types, must be part of the team to determine a brand’s
value.
Who else must be represented at the accountant’s table to arrive at an
accurate and reliable number for a brand’s value?
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