What constitutes brand value? Is there any relationship between brand value and market value of the...

What constitutes brand value? Is there any relationship between brand value and market value of the firms/brands? Type

Expert Solution

Brand value is the sale or replacement value of a product and is based on the financial amount of the product present on the balance sheet. It is important for the business because brand value helps the business to get know about the worth of their brand in the market. Different brands have different brand value chains.

Yes, there is a relationship between brand value and market value of the firms/brands. Because brand value not only helps us in creating more revenue but it also affects the market of the firms/brands. So, when the brand value and market value of the firms/brands are high, it prevents other companies to enter into the market because a high brand and market value already has earned a loyal customer. It will also increase the goodwill of the company. So, it will demotivate other rivalries to enter into the market. As a result, it will protect the market shares of the company which in turn will automatically increase the valuation of the company.

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