tag:blogger.com,1999:blog-8152901575140311047.post2005379376039673439..comments2024-03-28T08:49:51.975-04:00Comments on Musings on Markets: The power of a brand nameAswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8152901575140311047.post-87926684863366628452009-04-09T19:09:00.000-04:002009-04-09T19:09:00.000-04:00Brand name may be expensive to maintain, but the c...Brand name may be expensive to maintain, but the cost has to weighed against the benefits. Nike may spend a lot preserving their brand name, but I think lots of other companies would be glad to trade with Nike.Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-16494519342618748502009-04-09T09:14:00.000-04:002009-04-09T09:14:00.000-04:00The reputation of a brand name is not only fragile...The reputation of a brand name is not only fragile, but also expensive to maintain.<BR/><BR/>When I think of brands, I immediately think of Nike. The super sized contracts offered to pro athletes not only bring in money directly via those branded products, but keep the "Nike" image intact. Maybe I'm a little off base here, but would you then consider these types of contracts CAPEX?Trust - Mehttps://www.blogger.com/profile/00515106480141315672noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-3082090211815295432009-04-08T12:28:00.000-04:002009-04-08T12:28:00.000-04:00That is a good point. Unlike tangible assets, bran...That is a good point. Unlike tangible assets, brand name value can be destroyed overnight by an action (Coca Cola's introduction of New Coke... Michael Jackson promoting your product)... You can build it into value by assuming that excess returns from brand name can fade quickly.Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-42861845105966685242009-04-08T09:27:00.000-04:002009-04-08T09:27:00.000-04:00The reputation of brand name is fragile, it requir...The reputation of brand name is fragile, it requires a lot to maintain and might be destroyed in one single safety/quality accident. I agree with you that adding a premium because of brand name accounts to double counting of brand value, but should we explicitly build the risk of losing brand value into our valuation model? (Maybe using historical data of brand performance and integrity ranking report of firms from third party, to estimate probability of incurring impairment of brand value), <BR/>It might be unrealistic to do the estimation, in fact I feel that my logic is a little bit inconsistent, your comments is appreciated!Unknownhttps://www.blogger.com/profile/02281145573903601850noreply@blogger.com