From MBA Think Tank Encyclopedia(/)
Brand Value
Table of Contents
[hide]
1 Overview of Brand Value
2 Strategies to Enhance Brand Value
3 Brand Value Innovation
3.1 What is Brand Value Innovation
3.2 Brand Value Innovation Strategies
4 Links between Brand Culture and Brand Value
5 Brand Value Assessment
4 What is Brand Value? Brand Value Innovation
3.2 Brand Value Innovation Strategies
4 The Link between Brand Culture and Brand Value
5 Brand Value Evaluation
5.1 The Role of Brand Value Evaluation
5.2 Classification of Brand Value Evaluation
5.3 Procedures of Brand Value Evaluation
5.4 Most Valuable Brands Evaluation Methods
[edit]Overview of Brand Value
Brand value is the most central part of the brand management elements, and is also an important symbol that distinguishes a brand from similar competitive brands. Michael Porter has mentioned in his brand competitive advantage: the brand's assets are mainly reflected in the core value of the brand, or the core value of the brand is also the essence of the brand.
The diversification of value theories makes the brand value is given different connotations. According to the labor value theory: brand value is a series of joint actions taken by brand customers, channel members and parent companies, etc., which can make the brand's products to obtain greater sales and more benefits than if they had not obtained the brand name, but also can make the brand in the competition to obtain a stronger, more stable and more special advantage (Kevin Keller. 2003). This definition emphasizes the constituent factors and reasons for the formation of brand value; while according to the neoclassical value theory: brand value is people's willingness to continue to buy a certain brand, which can be measured by indicators such as customer loyalty as well as market segments, this definition focuses on evaluating the value of the brand through the utility feeling of the customer. It can be seen that the reason why the brand as an intangible asset has value lies not only in the sunk costs embedded in the process of brand formation and development, but also in whether it can bring value to the relevant subject, i.e., whether it can bring higher premiums and future stable income for its creating subject, and whether it can satisfy the use of a series of subject's emotional and functional utility. Therefore, brand value is a systematic concept formed by the interaction between enterprises and consumers. It is embodied in the enterprise through the brand of proprietary and monopoly of the material culture and other comprehensive value and consumers through the brand of the purchase and use of functional and emotional value.
[edit]Strategies to enhance the value of the brand
One, "create" is not as good as "buy"
According to the analysis of an international authoritative organization, the creation of a famous brand, only the media investment will require at least 200 million U.S. dollars. If a company is trying to enter a new market, or another country's market, its brand development will undoubtedly invest more huge financial resources and energy, but also encountered a variety of forces of the original market crowding out.
Then, using the power of capital to expand the brand and enhance brand value becomes the preferred strategy of some enterprises, and one of the most successful examples is "Unilever".
Unilever's 12 brands in China are almost all the best of their kind. Lixi and Shaxlian are at the forefront of shampoo and bath products; Chinese toothpaste is the oldest in the toothpaste market; Lipton black tea has a market share of more than 80 percent; and "Wolu Xue" has an unrivaled position in the ice-cream market.
Most of Unilever's more than 400 brands around the world have been acquired and marketed around the world. The success of Unilever's multinational branding efforts lies in its ability to acquire local brands and elevate them to international status.
Pun's was originally an American brand, but Unilever bought it and developed it into a skincare brand and promoted it to China; "Sharsley's" was originally a British brand promoted in Southeast Asia, but Unilever also introduced it to China. Unilever has also introduced Sharseline into China, and the inclusion of China's No. 1 toothpaste brand "Zhonghua" is a continuation of its consistent branding strategy.
Unilever's branding strategy has not only paid off handsomely globally, but has also enabled it to build a stronger emotional bond between local brands and consumers. As Mr. Zeng Xiwen, Development Liaison Director of Unilever (China) Co., Ltd. said, "Unilever's aim in acquiring a local brand is never to weaken its influence on its own brand, put it on hold, or even eliminate it, but rather to elevate it into the overall strategy of Unilever's global brand operation, and make it a global brand."
Second, "strong" joint strategy
The enhancement of brand value can also be achieved by joining hands with other brands to rapidly expand one's own brand image, thus creating more added value.
For well-known international enterprises, they are often very good at utilizing their strong brand appeal and market advantages in their respective industries to make "strong" brand alliances with other industry leaders, with a view to expanding in greater depth and breadth of the market to strengthen their brand image. And because this kind of collaboration is often based on cooperation between the two or more parties of the brand **** win, so it is also easier to get from the partners and the market positive feedback.
Starbucks, as a well-known brand in the "fast food coffee industry," has joined forces with United Airlines to expand its business to cover a wider range of markets; on the other hand, it is precisely because of this advantageous cooperation that the brand value of the two companies in their respective fields has been truly enhanced. Facts have proved that many of the original loyal customers precisely because of the new initiatives of the United Airlines, now become customers of the United Airlines, and now many Starbucks "supporters" are also in the United Airlines to meet and begin to "love" in the "Coffee Star". "Coffee Star". Another classic example comes from Intel, who joined forces with Microsoft to create the "WINTEL" empire, which brought them a staggering market capitalization, huge profits and the establishment of the most powerful first-class brand.
The alliance between large companies can help them quickly establish brand value in new markets, the same, small and medium-sized enterprises can also use this method, through the alliance with a strong brand awareness of enterprises, relying on the advantages of others to enhance the value of their own brands, and the most critical is to find a good fit for cooperation, to play to their own relative strengths. Early years of Lenovo, four is to rely on their own comparative advantages and internationally renowned large enterprises to cooperate, standing on the shoulders of giants to grow, to establish their own brand today.
Three, the brand extension strategy
Chinese enterprises brand strategy, many of which are borrowed from Japan and other Asian companies some specific practices. The most obvious **** the same point is that Chinese companies and Japanese companies, most of the unified brand strategy to a brand covering all the products of the enterprise, and less use of brand extension strategy.
Brand extension strategy includes sub-brand strategy and multi-brand strategy. Sub-brand strategy is between a brand of multiple products and a brand between the brand strategy. It capitalizes on consumers' trust and loyalty to existing successful brands to drive sales of sub-branded products.
From Haier's practice, the sub-brand strategy does effectively complement the unified brand strategy. It will be 0.5 kg of small washing machine called "instant wash", TV sets called "Pathfinder", beauty humidifier called "small Monroe", consumers know it at a glance. The same commodity, but also available sub-brand will be specifications, taste, grade, function, etc. to distinguish, such as Haier refrigerator selection of "small prince", "handsome prince", "small small prince" and so on. This also avoids the emergence of similar "Haier is the refrigerator", "Changhong is the color TV", "Swan is the washing machine" mindset. Choose the sub-brand strategy, can effectively guide consumers to break through the original consumer stereotypes, acceptance and recognition of the new product, and the main brand of trust, loyalty to the new product quickly transferred.
When it comes to multi-brand strategy, it's hard to miss the name "Procter & Gamble". P&G's principle regarding brands is that if there is room in the market for a particular category, it is best if those other brands are also P&G products. For example, in the U.S. market, P&G has 8 kinds of laundry detergent brand, 6 kinds of soap brand, 4 kinds of shampoo brand and 3 kinds of toothpaste brand, each kind of brand appeal is different, and P&G is also precisely the use of the brand between the functionality, personality differences to win the different needs and taste of life of the user, and each brand has its own space for development, there will be no overlap of the market, so that it has a very high market share in various industries. market share in various industries.
The reason why P&G can so soundly implement his multi-brand strategy, in addition to accurate market positioning and grasp of the differences in demand, the most important thing is to have been seeking and strengthening the various brands can be "strung" together with the golden thread, a kind of overriding the core spirit of the brand above the products, a kind of to the user to bring a consistent consumer experience. Consistent consumer experience to the user. As its advertising slogan "world-class products to beautify your life" conveys, "P&G" has become a symbol of the pursuit of high quality of life.
Four, channel-intensive penetration
Expand, enhance a brand first of all let your target and potential users often see your brand, because the brand value ultimately comes down to the user's purchasing behavior, and to make the user to complete the purchase of behavior on the first step is to reduce the cost of implementation of this behavior, which includes the psychological cost and behavioral costs, that is to say, to make it easy for users to think of you, familiar with you, buy your products! Familiarize yourself with you, buy your products with less distrust and worry, and then buy you more easily when you think of you. And to achieve this effect requires strong channel support, especially to "dense" sales terminals, increase the penetration of the regional market.
The Coca-Cola Company is one of the best examples, it set up sales channels all over the world to develop a wide range of regional distributors, not only vending machines, nozzles water dispensers, supermarkets, convenience stores, and in movie theaters, audio-visual stores, and even cabs are more visible in its "cool" nature.
Nike also opened up some new sales channels, including a significant effect of large-scale specialty malls - "Nike City", which strongly strengthened the company's brand image. Nike has also made a major push into the global market, extending its brand to more than 100 countries in the Asia-Pacific region, Europe, Latin America and North America since 1994.
Likewise, for enterprises in a relatively weak position, if you take effective channel penetration can receive good results, "very cola" is through the "Coca-Cola" in the rural areas of the relatively low rate of recognition of the situation, quickly lay the The company has been able to control this market segment effectively with lower prices.
Fifth, take the "windmill"
Take the "windmill" is to be good at taking advantage of the situation to enhance the brand, the early development and the most arduous things for others to do, and rely on their own individual strengths to pick the fruits of others. The "hitchhiking" is to be good at taking advantage of the situation to enhance the brand. "Ride" strategy is more suitable for small and medium-sized fast, flexible, flexible characteristics. In the face of new opportunities can be quickly cut into, and do not have to think too much about the entry of new markets along the style of its previous, will not have a negative impact on its other products.
"Very Cola" to a certain extent took "Coca-Cola's" "windmill," relying on "Coca-Cola's" already huge market. Relying on "Coca-Cola" has developed a large "Coke" consumer groups and market base, coupled with the "national" appeal and targeted channel penetration so that it quickly set up its own brand. Moreover, from another perspective, as long as the market share and living space of "Very Cola" are controlled within a certain limit, "Coca-Cola" will not try its best to suppress it, because the market share and living space of "Coca-Cola" is not as large as that of "Coca-Cola". "Coca-Cola will not try to suppress the market share and market capacity of Coca-Cola, because with the market share and market capacity of Coca-Cola, the loss of capital cost of suppressing "very cola" in the whole country is much bigger than the loss of market share, and letting "Wahaha", such a relatively standardized enterprise, control this part of the market share is also beneficial to Coca-Cola. This part of the market share is also conducive to the formation of the "cola" market order and the stability of the market.
Sixth, challenge the industry leader
Challenge the industry leader as with the master of the game of chess can enhance the value of the same, on the one hand, easy to be recognized as a master, on the other hand, in the process of fighting with the master of the process can be learned a lot of valuable things, but also relatively easy to become a real master.
TCL, as a wireless communications company, a few years ago, or phone synonymous, although in recent years, including color TV, air conditioning and other household appliances, but the recognition of its home computers has not been high, far less than Lenovo, Founder, the Great Wall and other brands, and now as China's second only to the "Lenovo" brand of computers! The process of its rapid growth in the PC industry is a continuous challenge to Lenovo. Its and "Lenovo" in the summer of 2001 hot Ben 4, LCD showdown quickly achieved "TCL" as a computer brand in the PC industry status.
On the other hand, challenging the industry leader is also a very dangerous thing, the important thing is to find a good entry point for the challenge, so that it is possible to achieve a win-win situation, or you may face disaster.
[edit]Brand value innovation
[edit]What is brand value innovation
The so-called brand value innovation is within a certain cost range, in the continuous improvement of products, services, based on the new brand value to meet the customer's original products or services to the pursuit of a higher value target. Brand value innovation can be a change in brand value attributes, can also be given to the brand new value attributes (such as the depth of the existing brand, breadth and relevance of the development of the extension, expanding the brand new areas), but also through the brand's new business strategy, to achieve the management and maintenance of brand value, to achieve the purpose of brand value creation and value added.
The reason why enterprises should carry out brand value innovation is that enterprises can improve customer perceived value through brand value innovation, on the one hand, because it can reduce customer sensitivity to cost. Through brand value innovation, help customers organize, processing information about brand value, simplify the customer purchase procedures; can enhance customer confidence in purchasing, improve loyalty, reduce the risk of purchasing; can increase the image value of the product, improve the customer's psychological and emotional perception of value, reduce customer cost sensitivity. On the other hand, brand value innovation can create value for enterprises. Through brand value innovation, it can enhance customers' extensive and lasting trust in related products, increase the frequency and variety of repeat purchases; it can promote the value spillover of brand reputation and the expansion of brand equity; and it can establish an effective barrier for competitors to enter.
[edit]Brand value innovation strategy
I. Improve the differentiated value of the brand
The key to the value of the brand is embodied in the competitive advantage of the differentiated value, one is the difference in work performance, durability, reliability, convenience and so on, brought about by the quality, performance specifications, packaging, design and style of the product. Quality difference is the core of brand value difference, and technology is the ultimate determinant of all quality. Enterprises must take technology as a guide when making brand value innovation. Advanced technology allows enterprises to develop and introduce new products earlier, and the "first-mover advantage" formed by advanced technology allows enterprises to form a short-term monopoly. Such as Intel's continuous technological innovation of computer memory, manufacturing generation after generation of new memory, but also created a superior brand value difference advantage. Second, the brand added value brought by the service. First of all, to ensure that the service time is rapid. Customers in the consumption of products, there are many service problems. Enterprises should be responsive to customers and act quickly, especially for complaints. Responding to customers quickly and solving customer problems in a timely manner is an important guarantee for maintaining customer brand loyalty; secondly, it is necessary to ensure the accuracy of technology. Technical accuracy means that the measures, strategies and methods used by the enterprise in providing support services must be appropriate, reliable, applicable and capable of solving the problems thoroughly; again, it is necessary to ensure the comprehensiveness of the services. When providing services, the enterprise must provide the whole process and all-round services according to the promise; Finally, it is also necessary to ensure that the service personnel are sufficiently affable. The service process, so that the intangible services tangible, the staff's attitude and enthusiasm will form a different personnel value, which is important for the customer's perception of value and satisfaction. Third, brand association and personality. Brand association can affect the customer's purchase psychology, attitude and purchase motivation, so the brand can enhance the customer's perceived value. Brand association is the result of brand connotation shaping and personality strengthening, to build brand association value difference advantage, must first shape the brand connotation, strengthen the brand personality. Such as Haier, associated with high-quality service; Wal-Mart, associated with low prices and so on.
Two, the innovation of brand positioning
Positioning of the brand, brand positioning determines the brand characteristics and brand development power. Common positioning are: (1) brand differentiation positioning: brand performance association. Such as those associated by the brand can bring benefits to customers, thus promoting the consumption of product characteristics; associations related to the brand's reliability, durability and serviceability, etc.; associations include the effectiveness of the service, efficiency, etc.; associations consist of design and style, etc.; associations related to price and value can help to separate your brand from competitors. Brand image associations. Such as who uses it in what circumstances; the cultural characteristics of the company; the content of the business; the characteristics of the product and even the spirit of the company. Consumer insight associations. Such as consumer demand diversification and personalization. (2) Competitive positioning of the brand: what kind of reference system the brand is in; how to deal with the brand characteristics with competitors***. For differentiated positioning, the differentiating features should be meaningful, practical and based on the positioning of certain interests of the customers, and need to be pre-emptive and easy to defend and difficult to attack. Eventually, during future product expansion, the following brand structure is formed: brand DNA; brand proposition; brand personality; product range; and points of interest for each product. After the brand is positioned, there must also be a clear, rich brand identity, create or maintain things and ideas associated with the brand, such as Gome Electrical Appliances, blue and red logo; Ikea furniture, blue and yellow conspicuous logo; McDonald's, red and yellow logo, and so on. Unlike brand image (the external associations of the brand), brand identity is inspiring, suggesting what needs to be added or changed to the brand image. Brand identity embodies what the organization wants the brand to stand for, and all those involved in branding, including the brand team and their collaborators, must be able to both understand what the brand identity is and care about its development. Failure to do either of these things may make it difficult for the brand to reach its potential, and put it in the precarious position of being caught in the crossfire of undifferentiated products and price competition. There are too many blind, uninformed brands in the marketplace that like to trumpet a price advantage, a hot discount or a haphazard flocking to TV channels - all classic symptoms of a lack of wholeness. As brand identity is used to drive all branding efforts, it is essential that its content has depth, breadth and relevance, rather than just an advertising slogan or a positioning statement. At the same time in the branding process needs to take into account the brand's reference system, similarities, differences, brand identification, value program, brand positioning, implementation, consistency, brand system (brand coordinates, such as SAIC-GM will be Buick, Cadillac, GL8 and other high-end brands in Shanghai production; Saio and other mid-range and low-grade cars in Shandong production; Chevrolet in Guangxi production), the brand leverage (in the identification to get) Confirmation of brand extension and brand cooperation), tracking brand equity, brand accountability, brand investment (brand sustainability).
Three, grasp the history, present and future
Want to shape a strong brand, the brand value innovation, the first is the brand history and current truth of the review. Discover the major milestones or turning points in the history of the brand, such as the establishment and expansion of the company (brand), the redesign of the main packaging or identification system, communication campaigns, the first transformation of the action, the main negative public relations or quality crises, etc.; today's brand to take "snapshots": who are the core consumers of the brand? What are the brand's associations? What does the brand really offer to consumers? Whether the brand is on-trend, etc. Compare it to its main competitors, and mark the brand's competitive strengths and key differentiators on a "competitive map".
Secondly, it is necessary to grasp the opportunities for brand development. Analyze the industry trend of future brand development (in terms of user's surface description and psychological description, in terms of access, in terms of service mode, in terms of the expansion of the use, etc.), such as cell phones, from male-dominated to gender-neutral, from high-end devices to convenient devices, from voice to SMS and pictures, etc.; in the future growth opportunities, not only to expand the user base, to tap into the new users, but also towards improving the function, increasing the usage and frequency, expanding the use of the brand, and improving the brand's competitiveness and competitiveness. , increasing usage and frequency, and expanding product usage; and identifying and grasping brand development opportunities through research on consumer behavior and insights into market trends and fashions.
Finally, the future of the brand. By effectively combining target demographics, brand proposition, personality and insights to find a brand platform that stimulates creativity and differentiation, we can identify the brand's DNA, which is a shorthand for the essence of the brand, which is concise, distinctive, enduring, appealing, and a single point of reference, rather than an advertisement or a slogan. For example, Lux (soap) - a beautiful dream, NIKE - fate is in my hands, Disney - magical imagination and so on.
[edit]The association between brand culture and brand value
One, in the bridge between brand culture and brand value to find the direction of brand development
The direction of brand development is highlighted in the creation of three aspects of brand positioning, brand characterization, and brand stereotypes. Clear brand development direction is to better highlight the brand culture and brand value of the interchangeable relationship.
The establishment of this relationship can be comprehensively reflected through the process of interpreting the brand culture and brand value, starting the brand diagnosis of the color TV brand Guangzhou Digital Lehua, there is such a contradiction, that is, how to make a brand in the decline and the cruel competition in the environment to find a clear direction of development? In the process of deconstructing the brand culture and value of Lehua, we found that the CRT-based product structure corresponds to the channels in the rural and secondary and tertiary markets, and the cost-effective price that can be amplified is all the advantages of the brand, and the popularization of the concept of a better life in the market brought about by the digital technological innovation of TVs is the brand's main three features. This ordinary and exquisite color TV life, popular fashion digital TV enjoyment, direct influence on the direction of brand development is how to base on the second and third tier market, do the most life and popular technology brand.
The clear direction of brand development guides the brand to build the means of communication at a higher level, so that the brand value and brand culture connotation can be further enhanced.
Two, the realization of the brand culture in the connotation of the migration is to achieve the brand image value of the premise of the exchange
that is, to fully explore the brand elements, and to find the brand culture and brand value of the interests of the point of exchange, so as to realize the brand in the internal gene and the external interests of the unity in the form of the form.
TCL, under the strategy of successfully entering the international market, immediately began to cooperate with the global R&D organization TBC in technological development, as well as to follow the international trend in product innovation, all of which demonstrated the characteristics of its brand culture of inclusiveness and atmosphere, and this characteristic in the process of transformation of the connotation, the brand value of the internationalization style in the image of the image has obviously been more comprehensively supported;
This is the case in the brand culture of TCL, which is the most important element of the brand culture. p>
This point in Guangzhou real estate industry has also been a good attempt to harmonize life, natural and comfortable Guangzhou Poly Real Estate, derived from the image of its property Lily Garden, constructed a harmonious image of the core, so that "let the beauty of harmony bloom" into the core of the interest, through the shaping of this harmony, such as large areas of Through this harmonious shaping, such as the planting of large areas of lilies, harmonious real estate summit, not only to maintain the continuity of the brand output, unity, but also for the brand in the core concept to enhance the use of the consumer market value transfer of the connotation of the extension.
Third, the brand culture of the brand value of the promotion and extension of the significance
TCL's international image value comes from the brand's own cultural support, and the significance of the lily garden itself has a natural and harmonious characteristics, through the brand culture of the multifaceted to create and thus achieve the enhancement of the brand value, but also to successfully realize the direction of the brand development of the transfer of the form.
In this process of transferring and interchanging culture to image and then to value, the shaping of a specific brand culture will also affect the brand value and even the transformation of the direction of brand development. Mengniu's collaboration with Super Girl 2005 is actually a classic case of Mengniu's success in enhancing its brand image by borrowing from the back of this particular event. Through the innovation of yogurt products, with the slogan of Zhang Hanyun's song "Sour and sweet is me", this brand transfer to the back of the consumer value has been realized.
Looking back at the brand, everything is to find the value of integration in the consumer market. This consumer value must also be the core content of the brand value advocated, such a process in the brand culture and value transfer process is also adapted; not only that, the brand culture in the transfer process with the value, but also need to take into account the factors is the mainstream consumer psychology, fashion and positioning groups **** the same characteristics of the discovery.
If the essence of culture is the idea, it must also have the concept of time period and geographical, then what kind of brand thinking is suitable for the market, is suitable for brand delivery, is suitable for the current stage of the brand delivery of content services, which must be through the examination of the market situation and the competitive environment as well as the development of the brand itself in many ways to consider, in order to form the real value! The transfer.
[edit]Brand value assessment
[edit]The role of brand value assessment
Brand value assessment can not only quantify the value of the specific brand, but also through the comparison of the value of each brand, from the intuitive understanding of the situation of the brand-name enterprises, from certain aspects of the market position of each brand and its changes, and reveal the brand value of the connotation and law. Connotation and law of brand value. It also creates a good public opinion and social foundation for enterprises to realize the reorganization and expansion of enterprises with brand as capital. Consumers are also influenced by brand value, which makes them loyal to certain brands. Investors are through the brand value of reference, to determine their own investment direction.
[edit]Classification of brand value assessment
The first category is the value assessment related to shareholders' equity, that is, the enterprise's own property rights changes or the use of the right to expand the need to quantify the value of the assessment must be based on the purpose of the assessment, based on the assessment standards and methods promulgated by the state, case by case. It is specialized for the commissioned enterprise service, provides the enterprise transaction bottom price reference.
The second category is the assessment of research nature released to the society and serving the society. That is, it is used for the value quantification carried out by the brand value comparison. This kind of assessment, must be to choose the same standards, methods, benchmark date, a unified group assessment. It is not for the service of a particular enterprise, it is for the community to provide consulting reference.
The former emphasizes transactionality and the latter emphasizes comparability. The number of trademarks assessed by the former is no longer comparable. The former assessment is limited by the purpose of the transaction or assessment, the size of the transaction to be made, and the acceptance of both parties to the transaction, while the comparative evaluation is not affected by any external subjective factors, and is based solely on the objective indicators used under the system standards for the estimation of the intrinsic value.
[edit]Brand value assessment procedures
(1) Establish a team combining marketing and financial senior managers and analysts. The commander-in-chief can be assigned to a neutral third party, or commissioned professionals outside the company.
(2) Re-examine the way the finance and marketing departments assess brand value, preferably by looking at relevant literature from the past and consulting international valuation standards.
(3) It is important to adopt financial and consumer research oriented valuation methodology, and to gain **** knowledge in order to make the valuation work smoothly and achieve the task.
(4) Conducting financial evaluations, as well as the necessary market research studies, both of which must yield reasonable and compatible results
(5) Recognizing the feasible methods of evaluating a brand and identifying the differences between each of them, in order to arrive at the most reasonable and non-controversial brand value.
(6) Setting campaign goals based on agreed-upon asset values makes your marketing strategy measurable.
[edit]Most Valuable Brand Evaluation Method
The formula for evaluating the world's most valuable brands can be simply stated (details ignored) as:
(Operating Profit - Capital x 5%) x Strength Multiplier
In its formula, the amount of operating profit is the important base.
And to determine the value, the intensity multiple is very important. This multiple generally ranges from 6 to 20 and is estimated by experts based on certain information or impressions. For the same $1 billion in profits, a strength multiplier of 6 would result in a brand value of $6 billion, while a strength multiplier of 20 would result in a brand value of $20 billion.
As for subtracting a 5 percent, consider that a business without a brand can make a 5 percent capital gain. Typically a dollar of earnings comes from 60 cents of capital. This would equate to roughly 3% of sales profits coming from the average social profit, thus requiring a subtraction of 3% of sales profits or 5% of total capital. That is, the average product, even without a brand name, will make a 3 percent profit on sales or a 5 percent return on capital.
China's most valuable brand evaluation formula can be simply expressed as follows: P = M + S + D
Where: P is the comprehensive value of the brand; M is the brand's market share; S is the brand's value of the ability to generate profits; D is the brand's development potential
.