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Article
Publication date: 1 November 1989

Noel Penrose and Martin Moorhouse

Recent merger and takeover activity in the branded goods sector hasnow prompted a number of companies to place formal valuations on theirbrand assets and include these in their…

1165

Abstract

Recent merger and takeover activity in the branded goods sector has now prompted a number of companies to place formal valuations on their brand assets and include these in their balance sheets. The authors believe brand valuation is an exciting management tool for the measurement of brand performance and other purposes. The article considers possible ways to value brands, brand strength and the use of this valuation.

Details

Marketing Intelligence & Planning, vol. 7 no. 11/12
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 1 January 1991

Tom Blackett

For many companies their most valuable assets are their brands, butuntil recently no reliable, objective methodology has existed for theanalysis, evaluation and measurement of a…

1385

Abstract

For many companies their most valuable assets are their brands, but until recently no reliable, objective methodology has existed for the analysis, evaluation and measurement of a brand and its performance. The last few years, however, have seen a burgeoning interest in brands and branding, as evidenced by the vast premiums which are being paid for brand portfolios and the current high level of interest in brand evaluation for strategic planning purposes. The phenomenon of brand evaluation is examined and the many different uses to which brand evaluation is now being put are reviewed.

Details

Marketing Intelligence & Planning, vol. 9 no. 1
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 9 November 2021

Washington Macias, Katia Rodriguez, Flavio Arosemena-Burbano and Donald Zhangallimbay

The purpose of this work is to analyze a brand valuation methodology proposed by the current Ecuadorian National Service for Intellectual Rights, assessing the relevance of the…

Abstract

Purpose

The purpose of this work is to analyze a brand valuation methodology proposed by the current Ecuadorian National Service for Intellectual Rights, assessing the relevance of the proposed marketing variables: awareness, associations and evaluation of purchase determinants, and their relationship within the proposed methodology.

Design/methodology/approach

The authors used data from surveys of 482 consumers of two agricultural brands in Ecuador (supplies, equipment and services). The authors applied linear multiple regressions estimated by generalized least squares with heteroskedasticity-robust standard errors. “Intention to repurchase” and “recommend” the brands were selected as dependent variables due to their relationship with brand value.

Findings

Brand awareness and associations positively influence the two dependent variables. However, the interaction between brand awareness and associations is negative, suggesting that, for the upper level of awareness, associations have no effect over intentions. This result holds for both brands. Brand evaluation of purchase determinants was a significant predictor of intentions only for the brand which belongs to a product category in which the purchase decision process is more extensive and with more effort.

Research limitations/implications

This study is focused only on agricultural brands, which limits the generalization of the findings.

Originality/value

The agricultural sector is very important in Ecuador due to its contribution to GDP and employment, and the country's position as the fifth exporter of bananas worldwide. Understanding consumer behavior is important for brands and firms' managers in order to preserve or increase brand value, for which a reliable valuation model is useful.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 13 no. 2
Type: Research Article
ISSN: 2044-0839

Keywords

Article
Publication date: 1 December 2020

Enrico Laghi, Michele Di Marcantonio, Valentina Cillo and Niccolo Paoloni

This study aims to validate a direct method to measure relational capital through the estimation of corporate brands. Considering the influence of relational capital management in…

12650

Abstract

Purpose

This study aims to validate a direct method to measure relational capital through the estimation of corporate brands. Considering the influence of relational capital management in leading performance and brand development, we consider brand value as a proxy for relational capital. The main research goal is to extend the previous literature on intellectual capital, financial performance and brand management by elaborating and testing an original approach for valuating corporate brands using regression analysis on multiples based on firm-specific accounting data and market information.

Design/methodology/approach

The authors propose two econometric models, for both listed and non-listed companies, which consider brand valuations made by primary consulting entities (Interbrand, Brand Finance, BrandZ, European Brand Institute) and multiples derived from accounting and market data of firms. Models were tested on a sample of nonfinancial firms for the period from 2006 to 2019, distinguishing between IAS/IFRS-based and US GAAP-based reporting standards.

Findings

The empirical results show that the identified set of market and accounting multiples proved to be significant information for estimating the value of brands within the IAS/IFRS framework, while a lower explanatory power was assessed for US GAAP firms. Furthermore, the empirical evidence confirm that the direct, relative approach based on multiples is more accurate for valuating listed firms than non-listed firms. Robustness analysis demonstrates that findings do not change significantly when the reference datasets and the main assumptions of the models are altered.

Research limitations/implications

The statistical significance of the analysis is limited by the non-objective nature of brand value estimates. The use of additional sources for brand valuations might allow for the further assessment of the robustness of the relationships identified.

Practical implications

Due to their efficacy and ease of use, the proposed models represent valid practical tools for managers, investors, analysts and professional evaluators.

Originality/value

This work contributes to the existing literature through the identification of significant, stable relationships between brand values and the main economic, financial and asset characteristics of firms; the identification of those relationships would allow for the extension of the multiples approach also to the evaluation of brands.

Article
Publication date: 1 July 2001

A. Seetharaman, Zainal Azlan Bin Mohd Nadzir and S. Gunalan

Recognizing brands on the company’s financial statement as an identifiable intangible asset is a relatively recent development in financial reporting, which only became a focus of…

11373

Abstract

Recognizing brands on the company’s financial statement as an identifiable intangible asset is a relatively recent development in financial reporting, which only became a focus of attention in the late 1980s. Accounting bodies throughout the world have appeared uncertain as to how to treat the issue of placing a brand in the financial statement as there is little guidance and less understanding over accounting treatment of brand valuation. The debate over procedures for valuing brands and including them as a fixed asset to the corporate financial statement has become a great controversy. As a descriptive study, the present conceptual study highlights the problems associated with brand valuation. Many corporate companies support the fact that valuing and hence capitalizing their brand bring a lot of advantages to the organization. The present study examines four main methods of valuing brands, namely the cost‐based method, market‐based method, income‐based method and formulary method. The method used in every valuation is subject to the suitability of the brand condition determined on their existing uses. A few recommendations based on the conceptual study are made in order to meet the needs of organizations and the business community as well.

Details

Journal of Product & Brand Management, vol. 10 no. 4
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 February 1989

J. Murphy

A storm of controversy has been created by Rank Hovis McDougall′sdecision to capitalise its brands, including those developed within thegroup. The case for capitalisation is…

Abstract

A storm of controversy has been created by Rank Hovis McDougall′s decision to capitalise its brands, including those developed within the group. The case for capitalisation is presented, and its implications and alternative methodologies discussed. A model of the actual methodology used is offered, followed by advice about the decision to value brands.

Details

British Food Journal, vol. 91 no. 2
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 1 September 2006

Robin Roslender and Susan J. Hart

The purpose of this paper is to identify brand management accounting as a further approach to accounting for brands and to suggest a number of possible measurement metrics it…

2432

Abstract

Purpose

The purpose of this paper is to identify brand management accounting as a further approach to accounting for brands and to suggest a number of possible measurement metrics it might incorporate.

Design/methodology/approach

The paper is discursive in nature, developing a critique of existing approaches to accounting for brands before considering a number of attributes of a new approach.

Findings

The growing importance of brands as a key source of competitive advantage has been among the most visible changes in many business organisations in recent years. Effective strategic brand management, therefore, poses a major challenge to both accountants and their marketing colleagues. To date, the history of accounting for brands has largely been concerned with the derivation of brand valuations suitable for financial accounting and reporting purposes. Although the merits of a management accounting perspective on brands have been recognised for some time, recent studies indicate that to date it has failed to attract much support. New approaches to accounting for brands are now required. Underpinned by high levels of interfunctional cooperation between management accounting and marketing management practitioners, brand management accounting examplifies the more inclusive approach to the task of strategic management increasingly evident within contemporary organisations.

Originality/value

The paper integrates both existing and new insights informed by the accounting and marketing literatures in an attempt to promote a further approach to the task of accounting for brands.

Details

Journal of Accounting & Organizational Change, vol. 2 no. 3
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 1 August 1998

Reza Motameni and Manuchehr Shahrokhi

Since late 1980s there has been a frenzy of mergers and acquisitions in which brands have played the primary role. It is no longer rare to find offers at a multiple of more than…

23360

Abstract

Since late 1980s there has been a frenzy of mergers and acquisitions in which brands have played the primary role. It is no longer rare to find offers at a multiple of more than 25 times company earning, or two or three times its share value. In this paper we attempt to reach several objectives. First, the marketing and finance perspectives of brand equity are presented, and their interrelationships are shown. Second, the different measurements of brand equity are presented. Next, a comprehensive model of global brand equity, which we believe is capable of both estimating the brand equity more accurately and show the sources of the equity will be proposed.

Details

Journal of Product & Brand Management, vol. 7 no. 4
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 August 1998

T Kippenberger

Proposes that brands must be valued and that since the late 1980s this has gathered momentum in the larger firm. Takes a bird's‐eye view of the brand valuation argument and…

4778

Abstract

Proposes that brands must be valued and that since the late 1980s this has gathered momentum in the larger firm. Takes a bird's‐eye view of the brand valuation argument and underlines the powerful nature of brands as a defensive mechanism in a competitive environment. Argues that brand valuation has developed partly as a way of excusing excessive acquisition premiums paid in mergers and acquisitions since the late 1980s; though overspending on premiums has led to spending cuts in brand maintenance and development so reducing their value.

Details

The Antidote, vol. 3 no. 5
Type: Research Article
ISSN: 1363-8483

Keywords

Article
Publication date: 6 September 2019

B. Rajesh Kumar, K.S. Sujit and Waheed Kareem Abdul

The purpose of this study is to broadly examine the role of marketing–finance interface factors for value creation. Specifically, the study investigates the influence of…

1091

Abstract

Purpose

The purpose of this study is to broadly examine the role of marketing–finance interface factors for value creation. Specifically, the study investigates the influence of discretionary expenditures such as advertisement on valuation of brands and firms within the framework of risk factors.

Design/methodology/approach

To test the model and hypotheses of this study as it has the possibilities of multiple causations among different variables used in the system. Some independent variables are not truly independent and there is a possibility of biased estimation and inconsistent results. Hence a dynamic simultaneous equation model is used including the instrumental variable approach.

Findings

The study provides evidence for direct association between brand value and firm value which is represented by the joint impact of both operating and stock market performance. The results establish the direct relationship between brand and firm value and signify the relevance of intangible value creation.

Originality/value

This study addresses the gap in the research which examines the role of marketing decisions on value creation which jointly impacts both operating and stock market performance.

Details

Measuring Business Excellence, vol. 24 no. 1
Type: Research Article
ISSN: 1368-3047

Keywords

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