The value of invisible assets is rising continuously throughout the world. In the last five years this trend has also come to the fore in Turkey. Now the value of the brand heads the list even on CEOs agendas. But there have been very few studies to determine the value of a brand. In order to fill this gap, Capital, together with the famous brand consulting company BrandFinance, chose the “Most Valuable Brands in Turkey” in 2006. This is the second year that the survey has been conducted and it reveals the brand values of the 100 ‘favorite’, most ‘trusted’ companies in their fields. The common feature of these 100 brands is that that have been trusted for years, are high quality and have always prioritized customer needs.
People no longer just look at market share, turnover and profitability. Brand value has become one of the most important criteria affecting performance. This is confirmed by the fact that unseen assets comprise 62 percent of a company’s value.
Companies in the rest of the world are aware of the value of brands. For this reason they invest in increasing the value of their brands and develop new projects to strengthen trust in their brands.
In recent years this has produced an increase in surveys throughout the world to ascertain the power and value of brands. But in Turkey such surveys have not gone much beyond “awareness. Seeing this gap, in 2006 Capital, together with the famous British consulting company BrandFinance, conducted a study which revealed the “Most Valuable Brands in Turkey”. This is the second year the survey has been conducted and it reveals the commercial brand value of many ‘favorite’, most ‘trusted’ companies in their fields. The most important feature which distinguishes this survey from other studies is that includes the ‘financial values’ and ‘future calculations’ of companies.
This survey was prepared by BrandFinance and does not include some companies which are not publicly owned and have not disclosed data. But it does contain vitally important messages for executives and businessmen from every sector. The “Most Valuable Brands in Turkey” study was prepared through questions sent to a total of 650 companies who had publicly disclosed data. As a result, 216 companies won the right to be included in the “Most Valuable Brands in Turkey” study. In addition to companies which did not respond, those companies which did not disclose complete financial data were also excluded from the study.
How Is A Brand’s Value Determined?
The “Most Valuable Brands in Turkey” study used the royalty relief method to calculate brand values the. Many global giants, such as SAB Miller, QData, Danone and Easyjet, have their brand value calculated using the royalty relief method. It is a trusted method which takes as its basis a company’s performance in the market. The royalty relief method is based on the hypothesis of a company without a trademark receiving a license to use one from a third party. The owner of the brand thus allows a third party to use the trademark without payment of royalties. The royalty relief method includes estimates of probable sales, the calculation of a suitable royalty payment for these and the inclusion of post-tax royalty fees in order to determine the net present value (NPV). The result is the brand’s current value.
Calculations to determine the value of the brand take into account variations in the price of the rights, similar license agreements, industry norms and analyses of margins.
Brandassist General Manager Muhterem İlgüner explains the reasons for using the royalty relief method in determining the “Most Valuable Brands in Turkey” as follows: “This method is known all over the world and is accepted and approved by tax authorities, and financial and regulatory authorities. In addition, the method is trusted because it takes as a reference transactions by comparable third parties. It is also important in establishing a connection with a brand’s commercial value and because it uses data from publicly disclosed data.”
Şeyma Öncel Bayıksel