Product and Pricing - Essay Example

16 March 2007 On Brand Valuation Brand has been considered very important in the success of a business organization. The article by Jacques Chevron highlights this by illustrating the acquisitions where the buyers are very much willing to pay a huge premium not for the company but for the brand that it carries. The author also presents the different valuation techniques which the decision makers utilize in order to assess the value which should be attributed to the brand. Brand valuation can be undertaken using valuation tools such as communication investments, awareness valuation and franchise valuation methods, excess-earning method, and relief from loyalty.

All of these techniques are employed in order to ascertain the financial or monetary amount of a certain brand. For example, using communication investments as a form of brand valuation takes into account all of the expenditures incurred in communicating the brand in the target market and adjusting it for inflation. In this technique the company also takes into consideration the opportunity of using the fund in other investments such as bonds. However, the author also emphasizes that the brand is an "intangible asset.

" It is more than the name or the logo printed in the packaging of certain products. The brand is not what it is but what it stands for. According to Chevron (4), a brand is "a covenant with the customer, a promise that the brand and the product it names will conform to the expectations that have been created over time." He also highlights that the existence of the brand is because of the company's "commitment to its external values." Thus, as brand is intangible and commitment is not quantifiable, the real value of a brand cannot be fully taken into account by attributing a monetary value to it: "Because all those financial valuation methods are but educated guesses, we cannot rely on any one" (Chevron 10).

It is clear that the author disagrees with the too simplistic or very complicated techniques employed by the financial analysts to value a brand. Since the author strongly believes that brands are more than names or logos but represents some intrinsic qualities. Even though a brand generates high value from financial tools, it cannot continue to exist and succeed without the company's resources and strategies. Since brands are represents covenant to customers, business organizations must strive to deliver the value which are represented by the brands consistently over time.

A company's failure to deliver the value that it promised will also lead to the failure of brand no matter how established it is. In the end, the brand is not a brand if it does not convey the customer value that it represents. Works CitedChevron, Jacques. "How Much for that Brand in the Window." JP Group. 2000. 16 March 2007