An ex-ante approach to brand capability valuation

There are numerous financial metrics available in the academic and commercial world to estimate brand value. In the context of mergers and acquisitions, managers often use such metrics when purchasing or selling brands. However, the measurement of brand equity in a going-concern has received scant attention in the academic literature. The well-known Interbrand™ approach is an ex-post calculation of brand value. This paper extends Interbrandʹs brand strength valuation model by developing an ex-ante approach to guide managers in their budgeting and strategic decision-making processes geared towards building brand value. It then empirically tests the model in a company with an internationally recognized brand.