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Branding and Firm Value

HANDBOOK OF MARKETING AND FINANCE, Shankar Ganesan and Sunder Bharadwaj, eds., Edward Elgar Publishing, 2011

58 Pages Posted: 12 Feb 2011  

Shuba Srinivasan

Boston University - Questrom School of Business

Liwu Hsu

Boston University - Questrom School of Business; Boston University - Department of Marketing

Susan Fournier

Boston University

Date Written: January 6, 2011

Abstract

Branding is widely recognized as an important marketing activity, yet marketing executives are challenged to prove the value of branding in clear financial terms. The objective of this chapter is to integrate emerging insights from the literature on branding and shareholder value into a process framework that helps enumerate and explain the brand-finance link. This chapter begins by discussing the reasons why using shareholder value (i.e., stock returns and risks) is an appropriate metric to assess brand performance and brand equity value. The authors introduce common metrics of shareholder value (e.g., Tobin’s q, abnormal returns, and idiosyncratic risk) and three distinct metrics of brand equity: customer, product-market, and finance-based. Next, the chapter delineates the mechanisms that govern the branding-finance interface to address whether and how branding affects shareholder value; key findings from the extant literature on branding and shareholder value are summarized to support these process routes. In conclusion, the chapter considers three antecedents of brand-equity creation, again reviewing extant literature to qualify effects on firm value and cash flow: organization-level strategy (e.g., corporate name strategy, mergers & acquisition), brand strategy (e.g., brand extensions and brand portfolio strategy) and brand management tools (e.g., advertising). The chapter concludes with an agenda for future studies that address gaps and challenges in this important and growing area of research.

Keywords: Branding, Shareholder Value, Firm Risk, Brand Management, Marketing-Finance

JEL Classification: M31

Suggested Citation

Srinivasan, Shuba and Hsu, Liwu and Fournier, Susan, Branding and Firm Value (January 6, 2011). HANDBOOK OF MARKETING AND FINANCE, Shankar Ganesan and Sunder Bharadwaj, eds., Edward Elgar Publishing, 2011. Available at SSRN: https://ssrn.com/abstract=1759670

Shuba Srinivasan (Contact Author)

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
6173535978 (Phone)
6173534098 (Fax)

HOME PAGE: http://smgnet.bu.edu/mgmt_new/profiles/SrinivasanShuba.html

Liwu Hsu

Boston University - Department of Marketing ( email )

United States

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

Susan Fournier

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617 353 2773 (Phone)

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