ABSTRACT

This chapter discusses the major ad hoc valuation models for brands. One of the oldest and best known was developed by the firm Interbrand and is derived from the excess earnings method. The firm of Stern Stewart has also devised a brand valuation model based on this approach. Other models, such as those of BrandFinance or BBDO, rely on other approaches such as royalties or multiples. ad hoc models can also prove useful when a manager wishes to measure whether/how his actions influenced a brand over time. The valuation model developed by Interbrand is an adaptation of the excess earnings method. Interbrand considers brands to be business assets used in the medium/long term. The Interbrand valuation model is not the only model based on excess earnings. The consultancy firm Stern Stewart & Co. has developed a model called "BrandEconomics", which uses a simple econometric approach to measure the portion of excess profits that is attributable to a brand.