This research responds to the attendant need for empirical evidence pertaining to how marketing affects firm performance. Using the Fama-French method, common in finance, and a leading marketplace measure of a brand’s financial equity value, the authors provide empirical evidence for the branding-shareholder value creation link. The results extend previous research by showing that strong brands not only deliver greater returns to stockholders than does a relevant benchmark but do so with less risk. This finding holds even when market share and firm size are considered.
Aaker, David A.1991. Managing Brand Equity: Capitalizing on the Value of a Brand Name. New York: Free Press.
2.
Aaker, David A. and Robert Jacobson. 1994. “The Financial Information Content of Perceived Quality.”Journal of Marketing Research31 (Spring): 191-201.
3.
Barth, Mary E., Michael B. Clement, George Foster, and Ron Kaszkik. 1998. “Brand Values and Capital Market Valuation.”Review of Accounting Studies3:41-68.
4.
Chan, Louis, Josef Lakonishok, and Theodore Sougiannis. 2001. “The Stock Market Valuation of Research and Development Expenditures.”Journal of Finance56 (December): 2431-2456.
5.
Chaney, Paul K., Timothy M. Devinney, and Russell S. Winer. 1991. “The Impact of New Product Introduction on the Market Values of Firm.”Journal of Business64 (4): 573-610.
6.
Conchar, Margy P., Melvin R. Crask, and George M. Zinkhan. 2005. “Market Valuation Models of the Effect of Advertising and Promotional Spending: A Review and Meta-Analysis.”Journal of the Academy of Marketing Science33 (4): 445-460.
7.
Day, George S. and Liam Fahey. 1988. “Valuing Market Strategies.”Journal of Marketing52 (July): 45-57.
8.
Doyle, Peter. 2000. “Value-Based Marketing.”Journal of Strategic Marketing8:299-311.
9.
Ehrenberg, Andrew S. C.1994. “The Case Against Brand Equity: If You’re Strong, Why Aren’t You Bigger?”Admap, October, 13-14.
10.
Ehrenberg, Andrew S. C., Gerald J. Goodhardt, and T. Patrick Barwise. 1990. “Double Jeopardy Revisited.”Journal of Marketing54 (July): 82-91.
11.
Fama, Eugene F. and Kenneth R. French. 1993. “Common Risk Factors in the Returns on Stocks and Bonds.”Journal of Financial Economics33 (1): 3-56.
12.
Fama, Eugene F. and Kenneth R. French. 2004. “The Capital Asset Pricing Model: Theory and Evidence.”Journal of Economic Perspectives18 (3): 25-46.
13.
Haigh, David and Raymond Perrier. 1997. “Valuation of Trademarks and Brand Names.” In Brand Valuation, 3d ed. Ed. Raymond Perrier. London: Premier Books, 19-24.
14.
Hyman, Michael and Ike Mathur. 2005. “The Marketing Finance Interface.”Journal of the Academy of Marketing Science33:373-381.
15.
Kerin, Roger A. and R. Sethuraman. 1998. “Exploring the Brand Value-Shareholder Value Nexus for Consumer Goods Companies.”Journal of the Academy of Marketing Science26 (Fall): 260-273.
Lehmann, Donald. 2004. “Metrics for Making Marketing Matter.”Journal of Marketing68 (October): 73-75.
18.
Lindemann, Jan. 2003. “The Financial Value of Brands.” In Brands and Branding. Eds. Rita Clifton and John Simmons. London: Profile Books Ltd, 27-46.
19.
Markowitz, Harry. 1952. “Portfolio Selection.”Journal of Finance7 (March): 77-91.
20.
Moorman, Christine and Donald R. Lehmann. 2004. Assessing Marketing Strategy Performance. Cambridge, MA: Marketing Science Institute.
21.
Parkhurst, Jeffrey. 2002. “Leveraging Brand to Generate Value.” In From Ideasto Assets. Ed. Bruce Berman. New York: John Wiley, 395-420.
22.
Pettis, Chuck. 1995. “The Relationship of Corporate Brand Strategy and Stock Price.”Morgan Stanley U.S. Investment Research, June 13, pp. 20-23.
23.
Rust, Roland T., Tim Ambler, Gregory S. Carpenter, V. Kumar, and Rajendra K. Srivastava. 2004. “Measuring Marketing Productivity: Current Knowledge and Future Directions.”Journal of Marketing68 (October): 76-89.
24.
Simon, Carol J. and Mary W. Sullivan. 1993. “The Measurement and Determinants of Brand Equity: A Financial Approach.”Marketing Science12 (Winter): 28-52.
25.
Srivastava, Rajendra K., Tasadduq A. Shervani, and Liam Fahey. 1998. “Market-Based Assets and Shareholder Value: Framework for Analysis.”Journal of Marketing62 (January): 2-18.
26.
Srivastava, Rajendra K., Tasadduq A. Shervani, and Liam Fahey. 1999. “Marketing, Business Processes, and Shareholder Value: An Organizationally Embedded View of Marketing Activities and the Discipline of Marketing.”Journal of Marketing63 (Special Issue): 168-179.
27.
Tomkins, Richard. 1999. “What a Good Name Adds Up To.”Financial Times, London Edition22 (June), Inside Track, p. 15.
28.
Zinkhan, George M. and James A. Verbrugge. 2000. “The Marketing/Finance Interface: Two Divergent and Complementary Views of the Firm.”Journal of Business Research50 (2): 143-148.
