Brands Matter: An Empirical Demonstration of the Creation of Shareholder Value Through Brands

Madden, Thomas J.; Fehle, Frank; Fournier, Susan

doi:10.2139/ssrn.346953

Cited by 38 publications

(45 citation statements)

References 26 publications

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“…The rationale is provided theoretically by Srivastava, Shervani, and Fahey's (1998) connection of market-based relational assets (e.g., brands) with the risks to firm cash flows. There is also some empirical support for this theoretical relationship in Gruca and Rego's (2005) findings linking cash flow variability with customer satisfaction as a market-based relational asset and in Madden, Fehle, and Fournier's (2006) finding that a portfolio of stocks for firms with high-value brands has lower systematic risk. In theoretically linking brand equity with firm risk, we do not develop separate hypotheses for debt-holder and equity-holder risk, because the finance and accounting literature suggests that the rationale for the proposed impact of brand equity is conceptually similar for each group of financial claimants.…”

Section: Brands and Firm-level Riskmentioning

confidence: 90%

Consumer-Based Brand Equity and Firm Risk

Rego

Billett

Morgan

2009

Journal of Marketing

258

207

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Investors and managers evaluate potential investments in terms of risk and return. Research has focused on linking marketing activities and resource deployments with returns but has largely neglected marketing's role in determining risk. Yet the theoretical literature asserts that investments in market-based assets, such as brands, should lead to reductions in firm risk. Adopting risk measures that are well established in the finance literature, the authors use credit ratings to capture debt-holder risk and the standard deviation of stock returns to measure equityholder risk, which they then decompose into systematic and unsystematic equity risk. The authors examine the impact of consumer-based brand equity (CBBE) on firm risk using data covering 252 firms from EquiTrend, COMPUSTAT, and the Center for Research in Security Prices over the 2000-2006 period. They find that a firm's CBBE is associated with firm risk and explains variance in the risk measures beyond that explained by existing finance models (i.e., it has "risk relevance"). They also find that CBBE has a stronger role in predicting firm-specific unsystematic risk than systematic risk but that it also has a particularly strong role in protecting equity holders from downside systematic risk. The results have clear economic significance and suggest that managers should make brand management part of the firm's risk management strategy and protect or even increase CBBE investments during periods of economic uncertainty.

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Section: Brands and Firm-level Riskmentioning

confidence: 90%

Consumer-Based Brand Equity and Firm Risk

Rego

Billett

Morgan

2009

Journal of Marketing

258

207

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“…Por um longo tempo, a falta de explanações e relatórios financeiros por parte do marketing "têm minado a credibilidade do marketing, ameaçado a permanência do marketing na firma e, ainda, ameaçado a existência do marketing como uma distinta capability dentro da firma" (RUST et al, 2004b;MADDEN;FEHLE;FOURNIER, 2006). Dessa forma, o marketing tem se esforçado para criar métricas que se relacionem com desempenhos financeiros, entre elas o valor da marca.…”

Section: Mensuração Do Valor Da Marcaunclassified

O valor da marca: conceitos, abordagens e estudos no Brasil

Oliveira

Luce

2011

REAd. Rev. eletrôn. adm. (Porto Alegre)

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O valor da marca é um importante construto a ser estudado porque é associado a benefícios-chave tanto para os consumidores quanto para as empresas, de forma que existe um crescente reconhecimento de que as marcas são recursos capazes de melhorar o valor ao acionista. O presente estudo visa verificar os estudos relativos ao valor da marca realizados no Brasil. Para tanto, primeiramente revisa conceitos e construtos existentes. Após, aponta alguns modelos de mensuração e, por fim, realiza um levantamento, dentre algumas das principais publicações brasileiras de administração, sobre os trabalhos realizados atinentes a esse tema. O levantamento dos estudos demonstrou que, nos últimos anos 2007 e principalmente 2006 , ocorreu um crescimento dessas pesquisas, mas ainda há um amplo caminho para esses estudos no Brasil. Muitos estudos são de caráter teórico-conceitual, existindo espaço para avanços em pesquisas de caráter empírico. Crê-se que ainda haja espaço para pesquisas que relacionem o desempenho da marca ao desempenho empresarial, seja lucratividade ou valor ao acionista. Também existe uma carência de estudos que observem concomitantemente a perspectiva de valor dos consumidores e das empresas. Dentre as contribuições que essa pesquisa buscou oferecer destacam-se, além dos conceitos, modelos e estudos levantados, a indicação de futuras pesquisas no Brasil.

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“…However, research in the marketing field has not yet come up with a single, uniformly accepted theoretical basis for brand valuation (Raggio & Leone, 2007). Thus, although the corporate world recognizes the estimation of brand equity as an important marketing activity, the estimation of brand equity (Madden, Fehle, & Fournier, 2006) and the quantification of the returns on marketing activities in financial terms continues to be a major challenge for marketing and brand managers (Mizik & Jacobson, 2008).…”

Section: Introductionmentioning

confidence: 99%

“…Adoption of a new measurement of brand equity results from the informational requirements of the following groups of people: (a) marketers, who seek to increase their organizational credibility by demonstrating the value of branding in clear financial terms (Madden et al, 2006), in order to obtain budgets for their departments and to better manage their brands; (b) scholars, who are under pressure to supply theoretical and methodological support to marketers in order to better measure brand equity, evaluate their brand performance and estimate its investment returns; (c) accountants, who set the price of a brand to be sold or purchased, and include a brand in the company's balance sheet (Feldwick, 1996), especially in mergers and acquisitions; and (d) shareholders and financial analysts, who verify the financial performance and the association between brand equity and shareholder value based on the growing evidence for the relationship between brands and the return of the firm in the stock market, as pointed out by Madden et al (2006), Mizik and Jacobson (2008), and Shankar et al (2008).…”

Section: Introductionmentioning

confidence: 99%