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Effective Executive Magazine:
Brand Equity and Brand Valuation : Establishing Guidelines for Value Creation
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This article discusses the limitations of the many methods proposed for valuing the brands and intellectual capital and, within the limits imposed by the brands intrinsic reality, establishes guidelines for value creation through this study of brands and intellectual capital.

The consulting firm Interbrand valued the Coca-Cola brand at $72.5 bn and the Microsoft brand at $70.2 bn in 2000. The ratio between brand value and market capitalization ranged between 1% for Pampers, 2% for Shell, and 77% for Apple and Nike. For Coca-Cola it was 59%, 14% for Pepsico and 52% for Kellog. On February 16, 2001, the Spanish newspaper Expansión published a list with the value of the brands of the main soccer and formula one teams. The consulting firm FutureBrand performed the valuation. According to FutureBrand, the Real Madrid brand was worth $155 mn and the Barcelona brand was worth $85 mn. The first question that comes to mind is: Are these valuations reliable? The second question is: Does valuing brands achieve anything useful? .

Capitalizing on the Value of a Brand Name, the number of consulting firms and research documents proposing methods for determining a brand's value has increased enormously.

The effort is worth it because, in the current competitive environment, many consider that the brand constitutes many business sectors' most important commercial and institutional asset. A lot of people are interested in learning how to create strong, enduring brands. One essential part of this process is to identify each brand's value drivers, that is, the basic parameters for creating, managing and measuring a brand's value.

 
 
 

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