Description

The value of a brand lies in its economic benefit – brand value is therefore defined as the net
present value of future earnings generated by the brand alone. Interbrand’s approach is based on
the following three economic functions: 1) the brand’s function to create cost synergies, 2) the
brand’s function to generate demand for the products and services, and 3) the brand‘s function
to secure future demand and thus reduce operative and financial risks. The method employed to
evaluate brands comprises five steps: segmentation, financial analysis, demand analysis, brand
strength analysis, and, finally, the calculation of the net present value of brand earnings.