I am not really a bratz man myself (I prefer G.I. Joe), but I saw this interesting case on the CNN site today. what I am curious about is what if Bryant had been named Banu, and lived in India instead of in the U.S.? Where is the value being added? How do you separate the original creation from what others have added? I think this is extremely difficult question to answer because building a name brand in a market as finicky as Children's toys doesn't necessarily depend on a long term marketing plan. Instead luck just plays a big factor.
http://money.cnn.com/2008/08/26/news/companies/mattel_bratz.ap/index.htm?cnn
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1 comment:
I think this is Erik that posted the comment, and if it is you'll know that in transfer pricing, half the battle is determining where the value is added. You'll also know then that to determine values, comparables are often used. My guess is in this case you would search for a comparable license agreement on the license of a name brand for a similar product between third parties. I recently did such a search, not for dolls, but in general name brands return 5-15% on sales. As such, lets assume the 1 billion quoted in the article is taken as sales, then it appears the jury was dang close (100 million). Granted, as you'll know, there's many flaws in this method, but I wonder how the lawyers came up with their figures.
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