By Disobedience to Success: When Brand Value should be Measured in a Different Way than how the Theory Recommends

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Abstract

Brand value building and managing is an interdisciplinary issue with serious impact on company's effective market performance. Knowing this, more and more companies try to extract the competitive advantage of a valuable brand. But there are a lot of practical restrictions that result from universal application of formulated theory without respecting national specifics and which often lead to company's activities in scope of branding and brand value measuring not being successful. This is the reason for scepticism towards the implementation of brand management activities, especially in former socialistic countries where the tradition of brand is not so developed due to the long-term application of principles of planned economy. So, the undesirable spiral mechanism is evident – domestic companies apply inconvenient methods of branding and brand value evaluation – brand value decreases – companies rather do not build and manage theirs brands – brands lose their competitive potential in comparison with foreign competitors and the market deforms – only strong foreign brands applying their national branding mechanisms survive – the impression of the so called ‘good practice’ is created – the domestic companies apply inconvenient methods of branding and the circle starts again. According to this, the aim of this paper is to critically discuss the applicability of selected brand valuation methods in the specific conditions of Slovak republic and to verify its applicability in the context of framework conditions of their applicability. To achieve this aim, after the application of selected criteria, we applied the following methods of brand value measurement: royalty savings and brand value added.

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