Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Measurement and Determinants of Brand Equity: A Financial Approach

The Measurement and Determinants of Brand Equity: A Financial Approach This paper presents a technique for estimating a firm's brand equity that is based on the financial market value of the firm. Brand equity is defined as the incremental cash flows which accrue to branded products over unbranded products. The estimation technique extracts the value of brand equity from the value of the firm's other assets.This technique is useful for two purposes. First, the macro approach assigns an objective value to a company's brands and relates this value to the determinants of brand equity. Second, the micro approach isolates changes in brand equity at the individual brand level by measuring the response of brand equity to major marketing decisions.Empirically, we estimate brand equity using the macro approach for a sample of industries and companies. Then we use the micro approach to trace the brand equity of Coca-Cola and Pepsi over three major events in the soft drink industry from 1982 to 1986. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Marketing Science INFORMS

The Measurement and Determinants of Brand Equity: A Financial Approach

Marketing Science , Volume 12 (1): 25 – Feb 1, 1993
25 pages

Loading next page...
 
/lp/informs/the-measurement-and-determinants-of-brand-equity-a-financial-approach-PL5bpTG0F0

References (41)

Publisher
INFORMS
Copyright
Copyright © INFORMS
Subject
Research Article
ISSN
0732-2399
eISSN
1526-548X
DOI
10.1287/mksc.12.1.28
Publisher site
See Article on Publisher Site

Abstract

This paper presents a technique for estimating a firm's brand equity that is based on the financial market value of the firm. Brand equity is defined as the incremental cash flows which accrue to branded products over unbranded products. The estimation technique extracts the value of brand equity from the value of the firm's other assets.This technique is useful for two purposes. First, the macro approach assigns an objective value to a company's brands and relates this value to the determinants of brand equity. Second, the micro approach isolates changes in brand equity at the individual brand level by measuring the response of brand equity to major marketing decisions.Empirically, we estimate brand equity using the macro approach for a sample of industries and companies. Then we use the micro approach to trace the brand equity of Coca-Cola and Pepsi over three major events in the soft drink industry from 1982 to 1986.

Journal

Marketing ScienceINFORMS

Published: Feb 1, 1993

Keywords: Keywords : brand equity ; finance-based estimation technique ; brand management ; advertising policy

There are no references for this article.