1. The origin of brand evaluation

In 1994, the ranking of the world's most valuable brands published by the American "Financial World" magazine was reported by Xinhua News Agency and spread to our country for the first time. At that time, the Coca-Cola brand value was US$35.95 billion and the Marlboro brand value was US$33.045 billion, which shocked the Chinese people.

How much is our Chinese famous brand worth? Ai Feng, then director of the China Quality Miles Organizing Committee, suggested to the central government that China’s Quality Miles March should, while in-depth cracking down on counterfeiting, crack down on counterfeiting and support the best, and advance on both sides. It is necessary to add value to China's own famous brands, establish brand awareness, and enhance international competitiveness. Thus, Beijing Famous Brand Asset Appraisal Firm (now Beijing Famous Brand Asset Appraisal Co., Ltd.) was born. In line with the purpose of studying the value connotation and development rules of famous brands, guiding and promoting Chinese enterprises to create world-famous brands, and based on the evaluation methods of the world's most valuable brands, the Famous Brand Evaluation Institute based on the 500 national and The sales revenue and profit rankings of 200 light industry companies were selected, and companies in consumer categories, with Chinese own brands, and able to provide financial status and other information were selected for research. In early 1996, based on the research results, 80 brands were selected and released as the '95 China's Most Valuable Brands.

In this way, China’s own brands have their own value for the first time and have a basis for comparison with international brands. The research conclusion at that time was: Chinese enterprises have entered the era of brand competition; there is a huge gap between Chinese famous brands and world famous brands. After the release of China's Most Valuable Brand in 1995, the citation rate was very high. In China, there are hundreds of direct media reports every year, and relevant research citations by companies, experts and governments abound. It makes people's understanding of Chinese brands change from the general qualitative theory of various famous brands with no different concepts to a quantitative standard that can distinguish weight and status.

Its advent has also made Chinese people look at China's own brands with admiration. In a market as vast as the ocean, consumers have one more standard for identifying brands. It also enhances confidence in using Chinese brands.

The growth of brand sales revenue can best represent consumers’ trust and loyalty to the brand. Over the past 16 years, China's most valuable brand has influenced Chinese people's lives and consumption with its prominent position. The average annual growth rate is about 20, which has rapidly concentrated the position of Chinese brands in the market. In the field of durable consumer goods, mainly home appliances, the market concentration of Chinese brands is increasing day by day, reaching about 70-80.

2. Evaluation objects and data sources

When we first conducted the research on China’s most valuable brands in 1995, we were the largest industrial enterprise in terms of sales and profits and taxes in the country in 1993 and 1994. The rankings of the top 500 and top 200 light industry companies are selected according to the following criteria:

1. China’s own brands include brands jointly created by Sino-foreign joint ventures in China.

2. Products can meet consumers.

3. Leading the industry market share.

4. Consumers have the right to choose products.

5. Be able to provide relevant material data required for evaluation. (In my country, the degree of information disclosure is limited. Even listed companies select high-quality assets to be partially listed. The data collected by the National Bureau of Statistics are also reported by enterprises. Moreover, each legal entity is the statistical subject. And a group may have several Ten independent legal entities cannot reflect the performance of a brand in the entire group)

6. Or a brand that meets the above standards can be obtained from public information.

Based on the above principles, we selected 80 brands from more than 200 shortlisted brands as the ’95 most valuable brands in China.

The brands released each year in the future will be based on this basis. With the increase in industry brand concentration and the availability of public information, the 2009 brand value list has been expanded to 100.

Because enterprises in China's telecommunications, banking, insurance and other industries have not really become complete market competition entities, and because the service targets of basic industries such as mining, smelting, petroleum, and electricity are not mainly mass consumers, although These companies will be relatively large in China, but their influence on consumers is not mainly based on brand appeal, so they have not yet been included in this list.

3. Evaluation method

The evaluation formula of the world’s most valuable brand can be simply expressed as:

Profit Ⅹ intensity multiple

Obviously , the key indicators are profit and strength multiples. This multiple generally ranges from 6 to 20, and is determined by experts based on seven aspects of information or impressions: leadership, stability, sales status, internationalization capabilities, trends, support received, and legal protection of the brand.

The evaluation formula of China’s most valuable brands can be simply expressed as:

P＝M＋S＋D

Among them: P is the comprehensive value of the brand; M is the market of the brand Possession ability; S is the brand’s value-added profit-generating ability; D is the brand’s development potential.

Through comprehensive consideration of the brand's market share, profitability, and development potential, the brand's industry status and development trajectory are ultimately expressed in terms of brand value.

In part M, we take the company’s sales revenue indicator.

We believe that sales revenue can best represent consumers’ recognition of the brand. It is relatively comparable in the same industry and also represents the market size formed by the brand.

Part S draws on the income approach in general trademark evaluation.

If the profit margin is lower than the industry average profit level, the value of this part will be zero.

Part D draws on the profit multiple method used in the above-mentioned evaluation of the world's most valuable brands. The multiple is determined based on the brand's legal protection status; the brand's technological innovation and protection; the brand's history; the brand's ability to transcend geographical and cultural boundaries; and the intensity of brand maintenance.

Our evaluation formula is more important to determine the industry correction coefficient. The biggest difficulty in uniformly quantifying brand value is comparison between different industries. If a set of comparable coefficients is not established between industries, the evaluation results will be occupied by large-scale industries such as tobacco and automobiles, and a considerable number of consumer products will not be included. This is also inconsistent with the impact of the brand in real life.

Finally add the three parts.

Sixteen years have passed now. Practice has proven that the brand value evaluation method we designed is in line with China’s reality. The value quantification under this standard system can basically reflect the current status of Chinese brands and their respective status in people's minds, and can become a reference for measuring the current status of Chinese brands.