How to determine the value of your brand
A brand is the intangible wrapper that turns a product into a cherished possession.
What is a brand worth?
Canada Goose is a well-known global brand under which the company markets premium jackets and other winter gear.
Canada Goose products are not cheap - a basic parka will cost you in the region of US$1000.
The interesting question is; what percentage of that elevated sales price is attributed to Canada Goose having a desirable brand, and what is that brand then worth in financial terms?
There are a number of ways that you would be able to calculate the value of the brand, but the simplest and most reasonable to calculate this in our minds is to do some proper, old-fashioned, field research.
If you are able to offer the fully-branded, fully-priced Canada Goose item in a Macy's store, as well as the exact same item in the same store without any branding - the test is to determine at what price the unbranded item sells as many units and at the same rate as the branded item?
So if the branded item sells 100 units in one month at $1000 and the unbranded item sells 100 units in one month at $600; the brand is then worth the $400 margin.
You can then multiply the difference ($400) with the total branded sales volume to determine the total brand value for the period concerned.
A brand is the intangible wrapper that turns a product into a cherished possession; accurately determining its real value is vital for strategic decision-making.
The last thing you want to be doing is leaving its value evaluation to guess work...or worse than that...people's opinions.
