a stableof brand names(Procter& Gamble,Kraft
Foods).Whenweapplytheapproachesdescribedin
the preceding section, we are obtaining a
consolidatedvalueforallofthebrandnamesowned
by the latter type of company.- Single product versus multiple product lines. The
brandnameofafirmthatsellsproductsindifferent
businesslinesismuchmoredifficulttovaluethanthe
brandnameofafirmthathasproductsinonlyone
productarea.Forinstance,Coca-Colagetsthebulkof
itsrevenuesfromsoftdrinks(thoughitdoesowna
fewothertypesofproducts).IBM,incontrast,gets
itsrevenuesfromcomputerhardware,software,and
services,withdifferent operatingprofiles.To value
IBM’sbrandname,wemayhavetovalueeachpiece
separately,anditisconceivablethatthebrandname
value is high in one segment and not in another. - Othercompetitiveadvantages.Aswehavenotedall
through this discussion, brand name is easiest to
value when it is the only competitive advantage
possessedbyafirm.Itgetsmuchmorecomplicated
when companies have multiple competitive
advantages,sincewhatweestimatetobebrandname
value may really be a consolidated value for all
competitive advantages.
Fernandez (2001) reviewed several brand name valuation
approaches and concluded that they all had shortcomings.
7 Whileoneofthemodelscritiquedinhispaperisfromthe
first edition ofthis book,we agreewith hisgeneral point.
Valuingbrandnameiseasiesttodoforcompaniesthathave
singleproductlinesandnoothercompetitiveadvantagesand
becomes progressively more difficult for other cases.