Ministry of Marketing

What is brand equity?

To understand how to calculate your brand equity, it is first important to know the components that make up brand equity. A brand’s value is determined by various factors, which we categorize into tangible and intangible factors. Tangible factors are directly observable and measurable, such as penetration rate, churn rate, Marketing Efficiency Rate (MER), customer satisfaction, and growth rate.

Why should you calculate brand equity?

Whether you have a startup, scale-up, or a (fairly) mature business, you work hard for your company’s success. Most entrepreneurs don’t realize it, but having a strong brand offers certain advantages. The most significant advantage is that a strong brand reduces financial risk, as it increases the likelihood that the company will generate revenue in the future.

What values do we use to calculate your brand value?

Degree of volatility The value of a brand is often seen primarily as what the highest bidder is willing to pay. This is because, in the consumer market, brand values can be quite volatile. They are closely tied to the image created through sponsorships and the involvement of influencers or artists. In some industries (such as hospitality), this volatility is stronger than in others (like car dealerships).

How do we calculate brand equity?

As mentioned earlier, there are various factors that should be considered in the calculation of brand value. The more data we have, the more accurate the calculation will be. We also include a standard deviation in the calculations to show the approximate range within which you can negotiate.

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