Proposed Methodology for Estimating the Value of Brands and Products

Abstract

Brands confer additional value of products that derives from perceived reliability, quality, availability of resale value and after-sales service. This meant that there is possibility of monopolistic behaviour on the part of the brand that allowed it to use its brand value to charge exorbitant prices for its product. Thus, how should the regulatory authority determine if monopolistic behaviour has been exercised, and how much extra charges have been levied on the consumer? This abstract idea preprint seeks to outline a methodology for using customer survey to estimate the value of brands and products. Using a series of questions, the survey would be able to estimate how much consumer is willing to pay extra for a certain brand vis-à-vis another brand of similar specifications. Questions include for the context of high-end smartphones: (i) how much extra are you willing to pay for an Apple smartphone versus a smartphone of similar specifications from another brand, and (ii) how much are you willing to pay for a smartphone of a particular technical specifications? The first question gives an aggregated view of the value of a brand in consumers’ hearts, while the second question provides an estimate of the value of a smartphone of certain specifications. Adding the two values together provides an estimated market price of the smartphone, which forms the basis for the regulatory authority to assess if monopolistic behaviour is present in the pricing of the smartphone. Comparing the market price and the estimated price of the product determined using the proposed methodology will inform the regulatory authority of possible price manipulation on the part of the brand. Overall, the proposed methodology illustrates the power of the oft-used tool of consumer surveys in marketing to help inform the value of a brand and product.

Keywords: pricing mechanism, smartphone, monopolistic behaviour, brand value, product value, consumer surveys