A brand has two primary groups of value: The core trademark value, and the incremental brand values and efficiencies that travel with the core trademark. Utilizing common brand valuation methods, we find that the sum of these two groups of values represents the total value of the brand.
This summed value can be used for a variety of business purposes, including negotiation when looking to perform an outright sale of a brand, or can be expressed in the form of a royalty rate to be charged for licensed use of all of the value elements represented by the trademark and brand bundle. For example, a trademark by itself may be able to earn a royalty rate of 2.5%, and the resulting cash flow could then be capitalized to represent a value of the trademark alone.
However, this single royalty rate and capitalized value does not recognize the incremental efficiencies and values that the brand may bring to a licensee, a partner, or to other brands in the parent company’s portfolio of intangible assets. Over the last 25 years, we have performed brand valuation methods analyses of both core brand value (consisting primarily of the core trademark or brand name), as well as the associated incremental brand value components, including: distribution efficiencies, sub-brands, sales and marketing efficiencies, advertising and promotional efficiencies, brand architecture, and regional marketing efficiencies, among other related assets. Utilizing this more realistic and market-based view, the experts at CONSOR are able to provide clients with an accurate picture of value for both the overall brand and specific components within the bundles.
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