A Perspective on Including Brand Premium in Valuation

In contemporary markets, companies such as Nike, Apple, Microsoft, and Coca-Cola are frequently regarded as quintessential examples of strong brands, reflecting their significant consumer recognition and association. However, the concept of a “brand” extends beyond mere recognition, encompassing both historical and modern interpretations. Etymologically, the term “brand” originates from the Old Norse word brandr, meaning “to burn,” a reference to the practice of marking livestock with heated iron to signify ownership. This rudimentary form of branding has since evolved into a complex, intangible asset that significantly affects the valuation of firms.