ESTUDIO DELION - Experience - Prestige - Success
Brand Valuation in Peru
The valuation of brands in Peru is obtained from the result of the value that a product has obtained throughout its life. It can be calculated by comparing expected future revenue from a branded product with revenue from a similar unbranded product. This calculation is approximate at best. It can comprise both tangible, functional attributes (e.g. DOUBLE the cleaning power or HALF the fat in the product) and intangible, emotional attributes (e.g. the brand for people with style and good taste).
The higher a company’s brand equity, the more likely it is to use a family brand strategy rather than an individual brand strategy. This is because the family brand makes it possible to take advantage of the assets accumulated by the brand throughout its life. This turns new product launches into initiatives with lower risk and lower cost. (Source: Wikipedia)
Brand valuation methods in Peru
There are different methods to carry out the valuation of a brand, among them:
- The value of the company (shares plus financial debt).
- Difference between the market value and the theoretical accounting value of the company’s shares (Market Added Value).
- The difference between the value of the company with the brand and the value of another company that sells products without a brand (white label).
This difference can be made because of:
Product price difference.
Value of extra sales volume.
Difference of the ratios (Capitalization/sales).
The present value of the company’s free cash flow minus the assets used for the required return.
The options to expand the company through new distribution channels, new geographical areas or new products thanks to the brand image. Source: Economipedia
Ranking – brand valuation
Each ranking uses a different method to value the brand. The three most famous rankings are:
Forbes: It considers the supposed benefit that corresponds to the brand and its advertising spending.
Interbrand: Compare the results of the white label with the reference brand.
Financial World: Uses a simplified version of Interbrand. Calculate the difference based on an estimate of the benefits of a white label. Source: Economipedia
- Brand valuation in Peru (brand equity).
- Integral consultancy.