Brand appraisals are most commonly conducted as a discounted cash flow (DCF) analysis. This puts a capital value on the expected future stream of revenues attributable to the subject Brand.
The key elements in a brand appraisal are:
Forecast revenues by segment
Forecast profits by segment
Long term market growth rates
Value driver analysis
Brand strength analysis
Brand contribution analysis
Brand risk analysis
These elements are combined in a financial modelling process to provide a point-in-time valuation opinion. It also creates a framework for testing "what-if?" scenarios to answer key brand strategy questions. This leads on to dashboard development, resource allocation and brand value maximisation.
How Brand Equity Affects Shareholder Value
Applications of Brand Appraisals