Financial evaluation of the brand

The financial evaluation of the brand (FBBE, financial-based brand equity) refers to the valuation of the economic interests of the brand, and to the assessment of its value.

In this approach to brand equity, either the brand is considered as an intangible asset and is valued as such, or the brand’s performance is estimated relative to the competitive strength of the brand within its markets (“brand strength”). Brand strength can be measured by different criteria such as the size of the brand put up for sale, the brand’s market share and the power of resistance to competition (price elasticity, barrier to entering the markets). The ability to enter new markets (potential for expansion), the ability to foster customers’ loyalty (share of wallet), the brand’s weight faced with distribution and the shelf-life of the brand are also included . Generally speaking, these approaches are one-dimensional and therefore incomplete. On the other hand, there are some models based on a multidimensional approach, like the highly publicized Interbrand ranking method which is based on seven weighted indicators (Murphy, 1989).