(2.5) - (2.6) Brand value chain & Financial impact of brand equity

Question 1

Explain the brand value chain

Answer 1

Marketing mis –> (program quality multiplier) –> customer mind set or CBBE –> (market place conditions multiplier) –> market performance –> (investor sentiment multiplier) –> shareholder value
SEE FYSICAL SCHEME!

Question 2

Explain the empirical analysis of the value chain

Answer 2

SEE FYSICAL SCHEME!
Most important are the long term elasticities:
» Advertising on fin resources: +0.029
» CBBE on credit spread: -0.351 (most signif)
» CBBE on fin resources: +0.614
» Fin resources on CBBE: +0.228

Question 3

How to define elasticity?

Answer 3

The % change of the outcome variable if the input variable increases with 1%.

Question 4

Give an overview of brand equity-shareholder value
studies (2001 – 2008)

Answer 4

• 2001 - Aaker & Jacobson
  Brand attitude is associated with same-period stock return
• 2006 - Madden et al
  Higher return and lower risk if high brand equity portfolio, compared to full market
• 2008 - Mizik & Jacobson
  Only brand relevance and energy explain stock prices
• 2012 - Johannson et al
  Only CBBE has significant incremental effect on stock returns
• 2013 - Luo et al
  Brand dispersion decreases stock returns and stock risks
• 2016 - Edeling & Fischer META
  Elast (advertising) = 0.04, elast (brand) = 0.33, elast (customer) = 0.72

Question 5

How to invest as particular in brand equity?

Answer 5

Through the brand capital fund!
» invests in companies with strong brands to max total value!