Cost based Brand Valuation – Definition

There are several brand valuation techniques available, one of which is Cost Based Brand Valuation. Other techniques can be found on the links below.

'Creation costs' may be estimated by looking back to brand launch and restating actual expenditure in current cost terms. This approach may provide a meaningful number for a new brand, where the time period is short and the costs are readily available. However, even when costs can be collected consistently the answer does not represent the current value of the brand.

'Re-creation costs' may be also estimated. The obvious difficulty is that there is no such thing as an identical brand so it may be hard to calculate a relevant re-creation number. Brands are valuable because they are unique. By their very nature they are not comparable or replicable.

For these reasons cost based valuations are usually only commissioned as a sense check.

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