Brand Valuation is necessary to determine the worth of a company. Why is brand valuation important? Discuss some methods of valuation of brand.

Brand valuation is the process used to calculate the value of brands. Strong brands create loyalty, help companies attract and retain talent, drive competitive advantage, and even reduce business risk. Brand valuation is a way to quantify all of these benefits. There are various ways to calculate the valuation of a Brand: 1. Cost-Based Brand Valuation The brand is valued using the sum of individual costs or values of brand assets and liabilities. It's the accumulation of the costs that have been incurred to build the brand since inception. Items included when evaluating costs include advertising, promotion expenditures, the cost of campaign creation, licensing and registration costs. One drawback of this method is that while costs can be collected and used, the figure doesn't necessarily represent the current value of a brand. 2. Market-Based Brand valuation This method uses one or more valuation methods by comparing similar brands which have been sold. This method uses comparable market transactions like the specific sale of a brand, comparable company transactions, and/or stock market quotations. Market-based brand valuation is what a brand can be sold for. The brand value using this method is equal to a market transaction price, bid, or offer for identical or reasonably similar brands. In real estate terms, it's like researching the sales prices of similar homes in the same neighbourhood before putting a price on your own home. 3. Income-Approach Brand Valuation This method is often referred to as the "in-use" approach. It considers the valuation of future net earnings that can be attributed directly to the brand to determine the value of the brand in its current use. The brand value using this method is equal to the present value of income, cash flows, or cost savings actually or hypothetically due to the asset.