Business & Finance - Marketing This assignment for Brand Equity Calculation will need to be completed by this Saturday (7/5/2025) evening (8pm EST).
Scorpio87
ApplicationAssignment2ModernMarketing.pptx
Application Assignment 2
Calculate Brand Equity for the same company you did the CLV calculation for (Assignment 1).
Use at least 2 methods for your calculations. If the results are different, explain and justify the difference.
Mention and justify your assumptions.
Application Assignment 2
Bonus question (optional): Do you think you can use CLV to calculate Brand Equity? How?
Measuring Brand Equity
Gauging brand equity
Cost approach
Market approach
Financial approach
3
The cost approach
• The cost approach calculates brand equity by examining the costs of developing the brand, such as marketing research, brand design, communication, management, and legal costs. The cost method can hinge on the historical costs of creating the brand, which include an estimate of all relevant brand-building expenditures; alternatively, it can be based on the brand’s replacement cost—the monetary expense of rebuilding the brand—at the time of valuation.
The market approach
• The market approach estimates brand equity by measuring the difference between the sales revenues from a branded offering against those of an identical unbranded offering, adjusted for the expense of building the brand. Assessing the value of the Morton Salt brand, for example, would entail comparing the sales revenues generated by the Morton product with the sales revenues generated by its generic equivalent—regular salt—minus the cost of building and managing the brand.
The financial approach
• The financial approach evaluates brand equity as the net present value (NPV) of a brand’s future earnings and usually encompasses three key steps: computing the company’s future cash flow, estimating the brand’s contribution to the company’s future cash flow, and adjusting this cash flow using a risk factor that accounts for the volatility of the earnings that are attributable to the brand.
