Brand valuation methods

Question 1

What is the excess-earning method?

Answer 1

The excess earnings method artificially divides a company’s earnings into two separate earnings streams: one for tangible assets and one for intangible assets. The problem is that these assets don’t generate earnings by themselves.

Question 2

What is the premium price method?

Answer 2

Premium pricing is a strategy that involves tactically pricing your company’s product higher than your immediate competition. The purpose of pricing your product at a premium is to cultivate a sense of your product’s market being just that bit higher in quality than the rest

Question 3

What is the p/e ration method?

Answer 3

The P/E ratio is calculated by dividing the stock’s current price by its latest earnings per share.

Question 4

What is the creation cost method?

Answer 4

this methodology estimates the amount that has been
invested in creating the brand

Question 5

How do you calculate gross margin/return of sales?

Answer 5

Gross Profit x 100
Sales

Question 6

How do you calculate net margin?

Answer 6

Net Profit x 100
Sales

Question 7

What are some advantages of branding?

Answer 7

Differentiation from competitor products
Encourages customer loyalty
Symbolic
Can charge a premium
Reduces risk or purchase
Legal protection
Creates a barrier for competitors