Valuing Brand Equity in the Arab World

Abu-Ghazaleh Intellectual Property

Ehab W. Dawoud

Amman , Jordan

Nov. 2007

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Contents

Defining Brand EquityBrand Equity ElementArab world Valuable Brands When Brand Valuation Is

Necessary?

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Defining Brand Equity

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Defining Brand Equity

“ The differential effect of brand knowledge on customer response”

“ A product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need”

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Brand Equity Element

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Brand Equity Element

Differential Brand Knowledge Customer Response

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Differentiation

The most critical element Price premium. In some instances, differentiation is easy to

create . whereas in other instances this can be much

more challenging (e.g., gasoline and bottled water)

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Brand Knowledge

Customers should know about the differentiation.

Customers should be aware of it, Customers should appreciate that The differentiation is meaningful for them

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Customer Response

Customers should respond favorably to this differentiation.

Product loyalty, Pay a premium

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Valuing Brand Equity

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Valuing Brand Equity

Value is a function of three primary variablesProfitability (Level of cash flow )Growth ( Increasing cash flow)Risk (Volatility of cash flow)

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Valuing Brand Equity (Cont’d.)

Brands create Preference (the basis for profitability), Permission (the basis for growth), loyalty (the basis for stable revenues and

profits).

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Valuing Brand Equity (Cont’d.)

What is required is a methodology for quantifying the impact of brands in terms of the profit, growth and risk of the overall business.

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Arab world Valuable Brands

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Al-Jazeera

Voted the world 5th most influential brand.

Al-Jazeera came just behind Apple’s iPod, Google, IKEA Starbucks,

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Apple USD 7,985

Google USD 8,461

Ikea USD 7,817

Starbucks USD 2,576

Al Jazeera

Amazon.com USD 4,156

??????

( $ Mil)

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The 100 Top Brands

Each brand must derive about a third of its earnings outside its home country.

Be recognizable outside of its base of customers

Have publicly available marketing and financial data

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When Brand Valuation Is Necessary?

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When Brand Valuation Is Necessary?

Tables of brand values such as the one in magazines like BusinessWeek and Forbes have helped to raise awareness of the economic significance of brands.

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Necessary of Brand Valuation

Three situations in which a brand valuation may be necessary or desirable:

1.It is required for accounting purposes.2.It will inform the terms of a prospective

transaction.3.It will enhance the management of the

brand.

Thank you

Q & A