SE-02 : Brand Value

ICO Std 2002 — Extension SE-02

This extension module specifies the requirements and methodologies for ranking and evaluating brand value. Brand value ranking occupies a distinctive position in the ranking landscape because it must integrate financial metrics with perceptual and behavioural indicators, navigate the tension between short-term market performance and long-term brand equity, and accommodate the diverse forms that brand value takes across industries and cultures. This module extends the core-layer methodology (Chapters 4 through 10) by defining domain-specific indicators for brand evaluation, data collection protocols that combine market data with survey-based measurement, and scoring procedures that capture both the economic and intangible dimensions of brand value. It aligns with the conceptual frameworks of ISO 10668 and ISO 20671 while providing ranking-specific operationalisation.

SE-02.1 Scope and Applicable Objects

SE-02.1.1 Scope

This module applies to the design, execution, and publication of rankings that evaluate brand value. It covers:

a) corporate brands (the brand of the enterprise as a whole);

b) product brands (brands associated with specific product lines or categories);

c) personal brands (the brand value of individuals in professional or public contexts);

d) regional or place brands (the brand value of geographic regions, cities, or nations).

SE-02.1.2 Applicable Objects

This module shall apply to rankings of:

a) brands within a defined industry or sector;

b) brands across industries using a universal brand valuation methodology;

c) brand portfolios of conglomerate entities.

SE-02.1.3 Exclusions

This module does not apply to:

a) the legal determination of trademark value for accounting or taxation purposes;

b) brand licensing transaction pricing;

c) goodwill impairment testing under financial reporting standards.

SE-02.2 Normative References

a) ISO 10668:2010 — Brand valuation — Requirements for monetary brand valuation;

b) ISO 20671:2019 — Brand evaluation — Principles and fundamentals;

c) ICO Std 2002 Core Layer (Chapters 4 through 10);

d) ISO 20537:2021 — Brand valuation — Guidance for the identification of a brand and the assignment of a valuation date.

SE-02.3 Indicator System

SE-02.3.1 Indicator Hierarchy

The brand value indicator system shall be organised into the following three-level hierarchy:

a) Level 1 — Dimensions: Brand Awareness, Brand Loyalty, Brand Association, Perceived Quality, Brand Equity (Financial);

b) Level 2 — Sub-dimensions: Decompositions of each dimension as specified in SE-02.3.2 through SE-02.3.6;

c) Level 3 — Specific measures: Operationalised variables for which data is collected.

SE-02.3.2 Brand Awareness

Brand awareness assesses the degree to which a brand is recognised and recalled by the target population.

a) Top-of-Mind Awareness: The proportion of the target population that names the brand first when asked about the product category. The ranking entity shall specify:

1) the target population and sampling method;

2) the survey prompt or stimulus used;

3) the survey context (aided vs. unaided recall).

b) Aided Recognition: The proportion of the target population that recognises the brand when presented with brand elements (name, logo, packaging). The ranking entity shall specify the brand elements presented and the presentation format.

c) Awareness Breadth: The extent of brand awareness across demographic segments, geographic regions, and market segments. A brand with broad cross-segment awareness shall score higher than one with concentrated awareness in a single segment.

d) Digital Presence: The strength of the brand’s presence in digital channels, including:

1) search engine query volume for the brand name;

2) social media follower counts and engagement rates;

3) website traffic and digital mention volume.

SE-02.3.3 Brand Loyalty

Brand loyalty assesses the degree to which consumers consistently choose, prefer, and advocate for a brand over alternatives.

a) Behavioural Loyalty: Measured through observable purchasing behaviour, including:

1) repeat purchase rate over a defined period;

2) share of wallet (proportion of category spending allocated to the brand);

3) customer retention rate and churn rate.

b) Attitudinal Loyalty: Measured through self-reported commitment and preference, including:

1) stated preference for the brand over alternatives;

2) emotional attachment to the brand;

3) willingness to pay a premium for the brand.

c) Advocacy Behaviour: The degree to which existing customers actively recommend and promote the brand, including:

1) Net Promoter Score (NPS);

2) organic referral rates and word-of-mouth activity;

3) user-generated content creation about the brand.

d) Loyalty Resilience: The degree to which loyalty persists in the face of competitive pressure or negative events. The ranking entity should assess:

1) brand switching rates during promotional periods by competitors;

2) customer response to negative publicity or product issues.

SE-02.3.4 Brand Association

Brand association assesses the strength, favourability, and uniqueness of the mental associations linked to the brand in the minds of consumers.

a) Association Strength: The speed and certainty with which consumers connect specific attributes, benefits, or experiences with the brand. Assessment methods may include:

1) free association tasks and response latency measurement;

2) brand personality mapping using established frameworks (e.g., Aaker’s Brand Personality Dimensions);

3) attribute-brand linkage surveys.

b) Association Favourability: The degree to which brand associations are positive and aligned with the brand’s intended positioning. The ranking entity shall assess:

1) the ratio of positive to negative associations;

2) the alignment of actual associations with the brand’s stated values and positioning.

c) Association Uniqueness: The degree to which the brand’s associations are distinctive and not shared by competitors. Unique associations that differentiate the brand shall contribute positively to the score.

d) Association Consistency: The degree to which brand associations are consistent across different consumer segments, touchpoints, and geographic markets. High consistency shall indicate a coherent brand identity.

SE-02.3.5 Perceived Quality

Perceived quality assesses the consumer’s overall judgement of the brand’s product or service quality, distinct from objective quality measurements (see SE-01).

a) Overall Quality Perception: The consumer’s global assessment of the brand’s quality, measured through:

1) rating scales anchored by quality descriptors;

2) comparative quality assessments against named competitors;

3) quality ranking within the product category.

b) Reliability Perception: The consumer’s belief in the consistency and dependability of the brand’s products or services.

c) Service Quality Perception: The consumer’s assessment of the brand’s customer service and post-purchase support quality.

d) Innovation Perception: The consumer’s perception of the brand’s innovativeness and ability to introduce new and improved products.

SE-02.3.6 Brand Equity (Financial)

Brand equity (financial) assesses the economic value attributable to the brand as a separable asset, consistent with the approaches defined in ISO 10668.

a) Revenue Premium: The incremental revenue attributable to the brand, estimated as the difference between the brand’s actual revenue and the revenue that would be expected for an unbranded or generic equivalent. The ranking entity shall specify:

1) the method for estimating generic-equivalent revenue;

2) the adjustments made for differences in distribution, scale, and other non-brand factors.

b) Brand Contribution to Market Value: The estimated proportion of the enterprise’s market capitalisation attributable to the brand, using one or more of the following approaches:

1) income approach (discounted cash flow of brand-attributable earnings);

2) market approach (comparable brand transactions or licensing multiples);

3) cost approach (historical investment in brand development).

c) Licensing and Royalty Potential: The estimated royalty rate that could be charged for licensing the brand, based on comparable licensing agreements or relief-from-royalty calculations.

d) Price Premium: The average price premium that the brand commands over generic or competitor products in the same category, expressed as a percentage.

SE-02.4 Data Collection

SE-02.4.1 Data Source Categories

The ranking entity shall collect data from the following categories of sources:

a) Market Research Surveys: Structured surveys measuring brand awareness, loyalty, association, and perceived quality. Surveys shall comply with the methodological requirements specified in Chapter 7 of the core layer.

b) Financial Data: Publicly available financial statements, annual reports, and market data from established financial data providers.

c) Social Media and Digital Analytics: Data from social media monitoring platforms, search analytics, and web traffic analysis tools.

d) Industry Reports: Brand valuation reports and industry analyses from established brand consultancy and research firms.

e) Consumer Transaction Data: Purchase data, loyalty programme data, and point-of-sale data, subject to privacy regulations and consumer consent.

SE-02.4.2 Survey Methodology Requirements

a) Brand perception surveys shall meet the following minimum requirements:

1) sample size sufficient to achieve a margin of error not exceeding ±3% at the 95% confidence level for the target population;

2) probability sampling or validated non-probability sampling with documented weighting adjustments;

3) survey instruments that have been pilot-tested and validated for the target population.

b) The ranking entity shall document the survey methodology, including:

1) sampling frame and method;

2) sample composition and demographics;

3) data collection mode (online, telephone, face-to-face, mixed);

4) response rate and non-response analysis;

5) questionnaire design and cognitive testing results.

SE-02.4.3 Financial Data Requirements

a) Financial data shall be sourced from audited financial statements where available. Where audited data is not available (e.g., private companies), the ranking entity shall use the best available estimates and shall document the data source and estimation method.

b) Financial data shall be adjusted for:

1) currency effects (using exchange rates at the valuation date);

2) accounting policy differences across jurisdictions;

3) non-recurring items that distort brand-attributable earnings.

c) The ranking entity shall specify the valuation date and the financial period used for brand value calculation.

SE-02.5 Brand Health Index

SE-02.5.1 Definition

The Brand Health Index (BHI) is a composite measure that synthesises the perceptual and behavioural dimensions of brand value into a single diagnostic indicator. The BHI complements the overall brand value score by providing an integrated assessment of brand vitality.

SE-02.5.2 Calculation

The Brand Health Index shall be calculated as:

\[BHI = w_1 \cdot A_{\text{norm}} + w_2 \cdot L_{\text{norm}} + w_3 \cdot Q_{\text{norm}} + w_4 \cdot G_{\text{norm}}\]

where:

SE-02.5.3 Interpretation

The BHI shall be interpreted as follows:

a) BHI ≥ 0.80: Strong brand health — the brand exhibits high awareness, strong loyalty, favourable quality perception, and positive growth momentum.

b) 0.60 ≤ BHI < 0.80: Moderate brand health — the brand has established presence but faces challenges in one or more dimensions.

c) 0.40 ≤ BHI < 0.60: Weak brand health — the brand shows significant vulnerabilities requiring strategic attention.

d) BHI < 0.40: Critical brand health — the brand is at risk of decline or irrelevance and requires urgent intervention.

Note: The BHI thresholds are indicative. The ranking entity may adjust the thresholds based on industry benchmarks, but shall document any adjustment and its rationale.

SE-02.6 Scoring Methodology

SE-02.6.1 Scoring Scale

a) Each Level 3 indicator shall be scored on a normalised scale from 0 to 100.

b) Financial indicators shall be normalised using the min-max method within the ranked brand set.

c) Perceptual indicators from surveys shall be scored using the survey instrument’s native scale, then normalised to the 0-100 range.

SE-02.6.2 Weighting

a) The default weight scheme for the five Level 1 dimensions shall be as follows:

Dimension Default Weight
Brand Awareness 0.15
Brand Loyalty 0.25
Brand Association 0.15
Perceived Quality 0.20
Brand Equity (Financial) 0.25

b) The default weights reflect the principle that brand value is determined by a combination of financial performance and consumer-based brand equity, with loyalty and financial value carrying the highest weights.

c) For rankings focused on consumer brand perception (excluding financial valuation), the ranking entity may reduce the weight of Brand Equity (Financial) and redistribute the weight across the other four dimensions, provided the redistribution is documented and justified.

SE-02.6.3 Aggregation

a) Scores shall be aggregated using the weighted sum method specified in Chapter 8 of the core layer.

b) The overall brand value score and the Brand Health Index shall both be reported in the ranking publication.

c) Where the overall brand value score and BHI produce divergent rankings (e.g., a brand with high financial value but declining health), the ranking entity shall highlight this divergence in the publication and provide interpretive commentary.

SE-02.7 Alignment with International Standards

SE-02.7.1 ISO 10668 Alignment

a) The Brand Equity (Financial) dimension (SE-02.3.6) shall be consistent with the three approaches to monetary brand valuation specified in ISO 10668:2010:

1) income approach;

2) market approach;

3) cost approach.

b) The ranking entity shall specify which approach or combination of approaches is used for the financial dimension and shall document the assumptions and limitations of the chosen approach.

SE-02.7.2 ISO 20671 Alignment

a) The indicator system shall be consistent with the dimensions of brand evaluation specified in ISO 20671:2019, particularly:

1) brand strength (encompassing awareness, loyalty, and association);

2) brand performance (encompassing financial and market performance);

3) legal and regulatory compliance.

b) The ranking entity shall map each indicator in this module to the corresponding ISO 20671 dimension and shall document any deviations.

SE-02.8 Publication and Transparency

SE-02.8.1 Publication Requirements

In addition to the requirements specified in Chapter 9 of the core layer, brand value ranking publications shall include:

a) the Brand Health Index for each ranked brand;

b) the brand valuation approach used for the financial dimension and its key assumptions;

c) the survey methodology summary, including sample size, method, and period;

d) the valuation date and financial period;

e) a statement of compliance with ISO 10668 and ISO 20671 requirements.

SE-02.8.2 Brand Identification

a) Each ranked brand shall be uniquely identified using:

1) the brand name and legal entity;

2) the scope of the brand (corporate, product line, geographic scope);

3) the brand elements included in the evaluation (name, logo, trade dress, etc.).

Note: This extension module is part of ICO Std 2002 (Tianji Ranking Methodology Standard). Brand value evaluation inherently combines objective financial data with subjective perceptual measures. Ranking entities should be transparent about the relative contributions of financial and perceptual dimensions to the overall ranking, and should avoid presenting brand value rankings as precise financial valuations. The Brand Health Index is intended to provide a diagnostic complement to the overall score, highlighting brands whose current financial performance may not be sustained by underlying brand strength.