New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Week 3 - Brand Management - Lecture

by: Erin McGoff

Week 3 - Brand Management - Lecture MKTG 421

Marketplace > American University > Marketing > MKTG 421 > Week 3 Brand Management Lecture
Erin McGoff
GPA 3.6

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

We were introduced to how to do a Brand Audit in week 2, so this week we were introduced to Brand Value. There are some really important math equations in these notes. Some of them are vital for th...
Brand Management
Dr. Sanal Mazvancheryl
Class Notes
brand, Management, Marketing, class, notes, Lecture, week, 3, american, University, intangible, tangible, assets, equation, Math, equations, audit, value, competitors, Product, values, the discount rate policy, Discounting, premium, prices, cost, based, approaches, comparable, econom
25 ?




Popular in Brand Management

Popular in Marketing

This 6 page Class Notes was uploaded by Erin McGoff on Wednesday September 14, 2016. The Class Notes belongs to MKTG 421 at American University taught by Dr. Sanal Mazvancheryl in Fall 2016. Since its upload, it has received 4 views. For similar materials see Brand Management in Marketing at American University.


Reviews for Week 3 - Brand Management - Lecture


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 09/14/16
Brand Marketing 9/14/16 2:35 PM September 14, 2016 Brand Value – another value of brand strength – financial value of brand • The premium that accrues to a brand because customers are willing to pay more for the brand than generic products or other competing brands • Brand value = brand equity (correlation) o Even though brand is intangible asset, brand value can be values in dollars. o Intangible asset ▯ Reputation ▯ Patent ▯ Trademarks ▯ Etc. o Easy to value tangible aspects o If you want to know how much an intangible asset is worth, it’s a bit harder. • EX: Disney purchased Lucasfilm for $4billion in 2012 o They had to value the brand in order to make this deal • Why? Strong brands command higher prices or a higher share at a given price. o Looked at a chart of top 30 companies in the world. Apple (170b), Google then Coca Cola. 2/3 of them were American Brands. They were tech, car, clothing and shipping companies. o Branding secures premium prices ▯ Water (tap) 2 cents / Poland springs $13 (69,000% premium) • Uber (largest taxi company), Airbnb (largest hotel chain), and Amazon’s value comes from intangible assets. o Out of Coca Cola’s total market value, 50% of it comes from brand value. • How? o Several methods ▯ Economic Use ▯ Comparable ▯ Discounted cash flow • Premium pricing • Premium earnings ▯ Cost method • Cost Based Approaches o Money spent to create the brand o Money needed to reproduce brands (how much would it cost to build the brand today? Advertising, R&D, test marketing, etc.) ▯ Issues: ▯ Backwards looking (we want to know how much it’ll be worth in the future) ▯ Estimation of replacement cost is difficult (the brand might be really old like coca cola) ▯ Relationship between costs and brand values in unclear—it is not just the amount of funds that invested that matters. • Economic use method o Basis: present value of future economic benefits o Several approaches (all look at economic benefits of brand) ▯ Comparable ▯ Similar to applying (price/earnings) ratio approach ▯ Find a similar brand. ▯ Value of a brand = (value/sales)c ▯ Ex: Nike vs. Reebok ▯ Not a reliable approach. ▯ TIME VALUE FOR MONEY ▯ A dollar is worth more today than it will be tomorrow. ▯ There will be a decrease in the buying power of a dollar due to inflation ▯ You could invest the dollar today and get a return from that investment ▯ You could buy something today and thus get utility from the dollar now rather than in the future. ▯ Calculate present value to future value. • Net Present Value aka “discounting” = 800 ▯ Price premium ▯ Idea that people pay more per unit than they would for the unbranded unit. ▯ V = (price x volume brand) – (price x volume generic) – (cost of branding) ▯ Total brand value = extrapolate the next 10 years (excel) ▯ MOST IMPORTANT THING TO REMEMBER: Two things: the value of the brand will go up, and the value of the dollar will go down. ▯ Premium earnings ▯ How much more will you earn in a year compared to the generic product? • Start with brand revenues • Deduct all operating costs (production, marketing, selling…), tax, and a charge for capital employed. o Results in earnings from intangibles o Decide what % of these earnings is due to the brand? • These earnings are then discounted to obtain the NPV (net present value) of brand earnings ▯ V = (financial data) x (customer research) / (competitor data) ▯ Step 1: Obtain net earnings from intangibles • You need access to detailed information (public companies) ▯ Step 2: [evaluate the brand] What % of that brand’s value comes from the brand? Estimate brand contribution to index. ▯ Step 3: [discount the future] brand risk analysis: assess the volatility of the brand earnings • How to convert a brand strength score into a discount rate? • Brand risk analysis: convert the brand strength score to a discount rate • The higher the brand strength, the lower the brand discount rate 9/14/16 2:35 PM 9/14/16 2:35 PM


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Kyle Maynard Purdue

"When you're taking detailed notes and trying to help everyone else out in the class, it really helps you learn and understand the I made $280 on my first study guide!"

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.