Journal of Food, Agriculture and Environment

Alternative methodology for brand value evaluations: the Friboi case

Author(s):

Bruno Cesar Marsolla ¹, Diego Henrique Garcia Soriani ¹, Régio Marcio Toesca Gimenes ², Erlaine Binotto ²*, Helder Henrique Martins ³

Recieved Date: 2017-06-12, Accepted Date: 2017-09-26

Abstract:

From the financial motivation, this study aims at measuring the monetary value of the company’s brand. The proposed methodology consists in assessing the company’s market value as a whole, using the discounted cash flows with and without the drivers of value with specific influence in the brand building (scorecards). The study identifies the value added to the company by the brand, that is, the advantage that would not exist without the brand influence. The company chosen for this study was JBS-Friboi, a publicly-held corporation whose financial statements are public. In addition to the company’s data, secondary sources of information was searched and used to compose the proposed methodology. In this specific context, the growth rate of the food sector was used for computing the company value (R$ 27.02 billion), which was estimated from the discounted cash flows. The scorecards that impact on costs, revenues and selling expenses were applied to the calculation. Then, a new discounted cash flow was projected without the influence of the brand (R$ 20.99 billion). Therefore, the difference between these two values is the brand value calculated for Friboi (R$ 6.03 billion). Importantly, this methodology can also be applied to privately-held companies if information is available for future cash flow projections. In addition to tests, adjustments and determination of brand value, an important contribution of the brand assessment methodology proposed in this study is the possibility of more proactive management strategies in order to generate and maintain the Market Value Added (MVA) of the business. By identifying the impact of the main brand value drivers on the company’s cash flow and consequently their ability to generate Economic Value Added (EVA), managers have in their hands a control panel with a suitable tool to track performance and develop new brand-specific strategies and policies to orient the company towards fulfilling its mission. Although this is not the focus of the study, the brand scorecard calculated for JBS-Friboi provides valuable and relevant information for decision-making strategies of the company with regard to the monitoring of the acceptance of its products by consumers.

Keywords:

Brand value, intangibles, discounted cash flow, scorecards, Friboi, resource-based view, decision-making, costs, marketm economic, methodology, evaluations

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Journal: Journal of Food, Agriculture and Environment
Year: 2017
Volume: 15
Issue: 3&4
Category: Food and Health
Pages: 26-34

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