· Brand Finance opens office in Mexico City
· Brand Finance Mexico to service Spanish speaking Latin American region
· Brand valuation is an essential part of strategic planning and brand management
Mexico City and London, May 16, 2016 – Brand Finance, the world’s leading brand valuation and strategy consultancy, announced today the start of operations in Mexico City. With offices in over 15 countries, the firm solidifies presence in Mexico and Spanish speaking countries of Latin America.
Brand Finance’s office will be headed by Laurence Newell, a local branding expert with over 20 years of experience creating, developing, and valuing brands to face consumer needs throughout Mexico and Latin America.
“Our firm is best known for tracking the brand values of thousands of the world’s top brands for nearly twenty years,” said Brand Finance Chief Executive David Haigh. “We are eager to bring our expertise to Mexico and the rest of the Spanish speaking Latin American region.”
Brand Finance was set up in 1996 with the aim of bridging the gap between marketing and finance. For almost 20 years, the firm has helped companies to connect their brands to the bottom line, building robust business cases for brand decisions, strategies, and investment.
The work of brand valuation helps finance experts evaluate marketing programs and marketing experts present their case in the boardroom. As an essential part of strategic planning and brand management, understanding the value of a brand helps to define brand and marketing budgets, increase understanding of brand portfolios, conduct brand architecture analysis, and better prepare for brand extension planning.
Laurence Newell, Managing Director of Brand Finance Mexico said, “Mexican companies understand the importance of developing their brands to drive stakeholder preferences and in general improve business performance. This is an excellent moment to introduce the services of an independent and impartial expert on valuing brands into the Mexican market.”
Brand Finance Mexico may be contacted at www.brandfinance.com
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.