Financial Management

36

Brand Valuation^*

“Products are made in the factory, but brands are created in the mind.”

 

Walter Landor

LEARNING OBJECTIVES

After reading this chapter, you will be able to:

1. Understand the basics of brand valuation.

2. Look at the various methods of brand valuation.

3. Discuss the royalty relief method, the discounted cash flow method, and the Interbrand method of brand valuation.

4. Understand the concept of intangible assets and their value drivers.

FINANCE IN PRACTICE

In 1988, there was a company called Rank Hovis McDougall (RHM), a leading U.K. food conglomerate that had several subsidiary companies. It had several strong brands in its portfolio, including Hovis Bread, an iconic brand in the United Kingdom in its time. Established in ...