Putting a value to any product can be a challenge and valuing a brand poses a particularly difficult challenge. The Brand License Valuation™ (BLV) model fromallaboutbranding.com, another fantastic resource for the world of licensing, explains a specific procedure for establishing the value of a brand. We’ve included a brief summary below, and you can read the full article here.
The valuation of brand extension licenses requires a different orientation than conventional licensing because the consumer purchase decision is different and the integration with the licensee’s business is greater. An effective methodology must reflect these dynamics to accurately assess the brand extension license value
The Brand License Valuation™ (BLV) model brings together brand metrics and market analysis to assess the value of brand extension licenses. ‘Brand fit’ (reflecting category dynamics) and ‘business fit’ (reflecting licensee dynamics) are the two underlying principles in the determination of license value.
The BLV model assesses how the licensor’s brand and business assets or ‘licensor assets’ affect brand fit and business fit for a given licensee. These licensor assets include:
- – Brand – brand name, logo, trade dress, and slogans/tag-lines
- – Marketing – communications, media, and support level
- – Operations – product development, manufacturing, and distribution
- – Stakeholder relationships – consumers, retailers, employees, other licensees
Implementation of the BLV model requires information from both licensor and licensee and involves a five-step process. Although securing relevant information can be a challenge in any business analysis, the licensor can realize significant benefits from making this effort and using the BLV process for new brand extension license opportunities.