The specifics of brand and trademark valuation are defined in the ISD S5 standard. The aim is to determine how great the added value for a company is due to the strength of the brand.
Brand strength is derived from the sum of all effects that the brand triggers in customers, suppliers and employees (attractiveness, trust, image, quality of life). The additional price paid by customers for these values, the additional commitment made by suppliers and the special loyalty shown by employees can be quantified as brand-related revenues and reduced costs. Offsetting must be made of the expenditure that will have to be made in the future for brand management, for marketing, for PR, for advertising and for branding.
The brand value corresponds to the present value of all the discounted earnings that will accrue to the brand owner in the future from the power of the brand.
A brand valuation can be interesting for determining one’s own position in competition and for targeted brand expansion. It is also relevant for determining the value of a company in the event of a company acquisition respectively a sale of a company.