Brand value[edit]
Traditional marketing methods examine the price/value relationship in terms of dollars paid. Some marketers believe customers perceive the value to mean the lowest price. While this may be true for commodities, some branding techniques are moving beyond this evaluation.[2]
Brand valuation emerged in the 1980s.[3][4] Early pioneers in brand valuations included the British branding agency, Interbrand,[5] led by John Murphy[6] and Michael Birkin,[7] which is credited with leading the concept's development.[8] Millward Brown was also a leading brand valuer.[9]
Both companies maintained "Top 100" lists of companies by valuation.[10] In 1989, Murphy edited a seminal work on the subject: Brand Valuation – Establishing a true and fair view;[11] and in 1991, Birkin laid out a brand earnings multiple models of brand valuation in the book, Understanding Brands.[12][13][14] A 2009 paper identified "at least 52" brand valuation companies.[5]
Criticism[edit]
One research paper states that "many of the methodologies [of brand valuation] used in practice are not theoretically sound".[5] One critic, Mark Ritson, writing in Marketing Week in 2015, said he had previously suggested that "despite the power and prestige of big valuation firms Interbrand, Millward Brown and Brand Finance, there was a possibility that much of what they do was bollocks".[20] He reported on research which found variation between brand valuations: "The average valuation was as likely to overstate a brand's value by more than 500% than it was to get within 20% of the actual price paid".[20]
Future developments[edit]
It has been suggested by Tony Juniper that factoring the effects companies have on the environment into brand valuation may support better understanding and addressing of environmental risks.[21]