Return on Brand Investment - The Economy of Brands

RETURN ON BRAND INVESTMENT

Jan Lindemann

INTRODUCTION 

With brands being such important business assets that account for substantial corporate value the question of managing and measuring the investments a company makes into a brand arises. Marketing expenditures for most companies have grown exponentially over the past decade. In several industries, especially consumer goods, marketing represents more than half of total costs of goods sold (COGS). Brands as intangible assets account for between 30 percent and 80 percent of shareholder value. In most companies brands are the single most valuable asset. It is therefore not surprising that the pressure from senior management and the financial community has grown to make marketing and brand investment accountable and align their use of funds to the value-based management agenda. The days when companies accepted the view expressed by Lever Brothers founder Lord Leverhulme (among others) who reputedly said: “I know half my advertising budget is wasted. But I am not sure which half” have passed.¹ In the post-Sarbanes-Oxley world of accountability and the need to boost corporate earnings following the 2008/9 recession, management require quantifiable proof that the resources being spent on marketing can be justified to shareholders. As brand-building requires substantial investments of both time and money companies are looking for a Return on Investment (ROI) framework that optimizes resources in order to achieve maximum value creation for shareholders. 

ROI – THE SHORT-TERM VIEW 

Easy and close to real-time access to high frequency sales and marketing data have resulted in the development and proliferation of complex and sophisticated marketing-mix models that measure the ROI of individual marketing activities as well as optimizing the overall marketing and media budget. Based on the scanner data from the tills these models can measure the direct sales impact on marketing activities and analyze which incremental sales have been generated by which specific effort. Most of these ROI models also provide “optimal” allocation of the marketing budget across all activities to guide future spend. Some very advanced models utilize game theory to anticipate competitors’ marketing activities and optimize the budget accordingly.²  Their attraction lies in their simplicity and their base in hard data that a non-marketing professional can easily understand. 

However, too much focus on short-term ROI results in reallocating funds from longer-term brand-building investments like strategic marketing and communications to short-term sales drivers like pricing and promotion. In addition, traditional media is becoming increasingly fragmented, reducing the effectiveness of mainstream media such as advertising. According to a study by the consulting firm Booz & Co. companies are shifting marketing spend from media communications (TV, radio, print) to sales-focused activities such as consumer and trade promotions. These increased their share of marketing spend by 7–8 percent during the period 2000 to 2004³. The study suggests that the reallocation of marketing budgets to promotions is due to the fact that their success can be easily measured. Price promotions increase sales in the short term but have a negative effect in the long term by impairing the perception of the brand. On-going price promotions and incentives lead to a downward spiral in which low prices harm brand perceptions resulting in the need for further price promotions to stabilize sales. Consumers get used to the promotion prices and the company suffers a permanent hit on its margins and the brand on its image. The incentivebased selling of US car brands has shown how such an approach harms brand perceptions and kills the margins of the business. 

Brand building is a long-term process 

Brand building is a long-term process that can stretch over decades as evidenced by the building of leading global brands such as Apple, BMW, Coca-Cola and Gillette. The change of brand perceptions is therefore relatively slow. The reason is that a company needs to deliver the brand to their customers through all their customer-facing activities in a constant clearly differentiated and relevant way. Due to limited capacity and interest it is a time-consuming activity to get a space in consumers’ minds, particularly given the current media bombardment to which consumers are exposed. In the developed world, consumers are exposed on average to more than 3000 brand messages per day⁴ Engraving a brand perception in consumers’ minds does not happen quickly. Consumers need to be aware of the brand, develop knowledge of its offer, consider its relevance and difference to competing offers, and then purchase if they believe their needs are met. Obviously, given the immense choice that exists in nearly all categories, consumers cannot perform such an assessment for each brand on the market. Companies therefore need to use their resources as efficiently as possible to attract consumers’ attention and loyalty. This requires a focused effort to create and deliver a distinctive and relevant brand message and delivery. Constantly and consistently strengthening and optimizing all parts of the brand value chain (see "The Brand Value Chain") enables companies to create, maintain, and grow the perception of their brands in consumers’ minds. Once companies have established their brand perception it is possible to reap the economic rewards for a considerable length of time as evidenced by Coca-Cola, HP, and Kellogg’s. Consumer memory tends to be durable and once information about a brand is fixed in peoples’ minds it erodes very slowly.⁵ Consistent brand building over time therefore creates a sustaining and accumulative effect on customers’ perceptions and behaviors. The investments that companies make accumulate into a sustainable brand asset whose value can be quantified. In that respect the brand asset and investments made in the brand behave differently to physical or other intangible assets such as patents and technology. The brand asset is invested in an on-going basis through the company’s actions and communications. The effect accumulates over time making each additional investment more efficient as it adds to a growing base. The effect limits are set by the relevance of the brand meeting consumer needs and financial resources. 

Marketing spend creates shareholder value 

Brand building creates sustainable shareholder value. According to several surveys, brands account for 30–80 percent of shareholder value, depending on the industry.⁶ This supports the view that overall brand investments have a positive impact on shareholder value. The direct result of the brand’s impact on shareholder value can be measured by brand value which represents the NPV of the brand’s expected future earnings. Brand value is therefore a good measure of the success of brand investments. The impact on brand investments and marketing activities on brand value differ significantly. To understand these impacts it is helpful to look at each investment category separately. 

The first investment category – strategic brand investments – are made periodically and provide the framework for communications and tactical investments. Strategic investments are the core brand elements, brand image advertising, product development and design, retail space as well as sales force and customer service personnel training. The core brand elements define the attributes and associations that consumers attach to the brand. They create the differentiation and relevance of the brand’s offer which impacts customers’ purchases and the resulting financial outcomes. Brand core elements include the brand name, core values and positioning, and some visual elements, primarily the logo. Often these core elements remain unchanged for many years or even decades as they are a big part of the reason why the company has become successful in the first place. Only strategic shifts in the sector or business require a change of these core values. Brands such as BMW, Apple, Coca-Cola, Louis Vuitton, Hermès, Nivea, Sony, Kellogg, Disney, Virgin, and IBM are just a few examples of the continuity and endurance of a brand’s core elements. The Coca-Cola brand still represents refreshment, the original cola, and American heritage while the written logo, the color red, and the bottle shape are still the defining brand elements. Apple represents fun, ease of use, and style in consumer electronics represented by its iconic logo and product design. BMWstill represents performance, style, and engineering quality and, although the design of the cars has changed over the years, the kidney split grill and the blue and white logo have remained core design elements. IBM is, despite a significant shift in business strategy in the 1990s, still the safe and secure IT consulting choice donning the striped logo as they have since 1972. The key effect of the core brand elements is not necessarily the beauty or aesthetics of the specific designs or symbols but the consistency and recognition they create for the brand. The Coca-Cola logo was not created by a designer but by the company’s accountant in 1885. The visual core elements may, over time, be tweaked to keep them looking contemporary (e.g., 3D logos) but a major departure from the established elements needs to be well grounded in changes of business strategy and environment. Strategic repositioning of brands occurs but can be very dangerous as demonstrated by BP in "The Brand Value Chain". The creation and management of the core brand elements are relatively cheap and are made up of management workshops, consulting time, trademark registration and protection of name, logo and other elements such as colors or shapes. The ROI is very high as the majority of brand communications are directed by the core elements. 

Part of the strategic core elements is the decision on how many brands are to be used and what relationship these brands have to each other. A brand that stretches across too many markets and products can quickly lose its differentiation and relevance. Some companies therefore develop specific brands for specific audiences and markets. For example, Toyota and Nissan recognized that despite their engineering and design capabilities their brands did not stretch credibly into the premium car segment. They therefore developed Lexus and Infinity brands respectively which both became successful brands albeit after a long and hard marketing push. Most car companies use a portfolio of brands to cover more markets. In many consumer good sectors the brand positioning needs to be relatively narrow to be credible and attractive to consumers. For that reason, companies in a variety of industries use a portfolio of brands that enables them to apply their competencies to a wide audience in their chosen industry. Examples are P&G and Nestlé in packaged goods, VW and BMW in cars, LVMH and PPR in fashion and luxury, and WPP and Omnicom in marketing services. The use and relationship of different brands is called brand architecture. Some companies use only one master-brand and the corporate and customer-facing brand is the same, examples are Samsung and IBM. In some cases corporate and product brand are the same but the company also uses other product brands, for example, BMW, VW, and L’Oréal. Some companies operate as pure holding companies with a portfolio of customer-facing brands such as P&G and WPP. A portfolio of brands is only wealth-creating when the net returns exceed the associated costs. In many bank or telecommunication company mergers, brands disappear because one brand takes on the role of both brands and investments are reduced accordingly. Brand architecture is therefore an important strategic brand decision. Supporting one brand is cheaper than supporting a portfolio of brands as each brand activity and investment accumulates to build the value of one brand. This is supported by academic research that has suggested that the impact of marketing variables on brand-related intangible assets may be moderated by the type of branding strategy adopted by a firm: corporate branding; house-of-brands; or mixed branding. Based on a panel data set, the results show that a master branding strategy is associated with a 58 percent higher Tobin’s q value (market value/asset value) relative to a house-of-brands strategy and a 73 percent higher value than a mixed-branding strategy.⁷

The core brand elements impact on other strategic brand investments. Product development and design are often driven by the brand positioning as in the case of Apple and Samsung. Apple’s product line moved from computers to MP3 players (i-Pod) and mobile phones (i- Phone) while still applying the same brand principles of fun, ease of use, and style. The Apple design style is consistent throughout its product line-up making the brand instantly recognizable. BMW is another good example in this respect. Over time the consistent application of certain design elements become core brand elements such as the grill design of BMW or Rolls-Royce. Major product developments occur in longer cycles sometimes of many years. Their impact on brand value is significant as demonstrated by brands such as Apple, Samsung, Audi, BMW, and Nintendo. Companies therefore invest significant sums in R&D. L’Oréal spends as much on R&D as it does on advertising. Samsung spends about 50 percent more on R&D than on advertising. Intel and Microsoft have some of the highest R&D budgets in the industry. These companies need new products to attract consumers to build and maintain their brands. Branded companies tend to spend more on R&D than their more commodity-based peers. A strong brand also allows for higher returns on R&D investments as the brand creates instant credibility, acceptance, and reassurance. 

Core positioning also drives the image advertising and communications of the brand. For many consumer-facing businesses advertising is an essential and in many cases the most expensive component of their marketing communications. As it deals directly with the communication aspect of the brand, it can be designed to deliver brand specific messaging to influence consumers’ perceptions and behaviors. This includes building awareness and knowledge of the brand, differentiation, and premium perceptions. A study by PwC claims that advertising positively affects consumers’ brand perceptions and their willingness to pay a price premium for these brands. The study suggests a strong correlation between share of voice (in particular TV advertising) and consumer willingness to pay price premia. The same study stated that brand investments can shift brand preferences within 14 months.⁸ While advertising can have persistent effects on sales,⁹ in most cases, the immediate sales impact is short-term with about 90 percent of the effect ceasing after 3 to 15 months.¹⁰ Advertising contributes to building brand knowledge and attitudes.¹¹ Brand awareness is a function of the number of brand exposures and experiences accumulated by consumers.¹²

While the specific effect of advertising on consumer perceptions and experiences depends on a wide range of factors including message content, media scheduling, product category, and competitive activities,¹³ overall higher advertising spend tends to positively affect brand attitudes and perceptions.¹⁴ The effect of advertising on consumer brand perception can be sustaining and accumulativem¹⁵ as each brand message and touch point builds and reinforces other brand messages and touch points improving the effectiveness of each additional message and exposure.¹⁶ The image communication of the brand is accumulative and each advertising campaign consistent with the core positioning builds the brand perceptions in consumers’ minds. Brand advertising builds awareness, knowledge, and preference. While most companies still spend the majority of their advertising budget on TV advertising there has been a shift towards direct mail and the Internet because the direct impact of these media on sales is relatively easy to measure. In many companies, advertising is one of the largest marketing expenses.¹⁷

Another strategic brand investment is retail space such as shops and dealerships. They are main brand touch points and ultimately the point of sale. Not all businesses can afford to control their point of sale but the ones that do make substantial investments in their retail outlets. Most leading luxury brands have reduced their concessions and focused on their owned retail space. In 2003, Prada paid US$87 million for its flagship store in Tokyo, which was the largest single investment made by an italian company in Japan since World War II.¹⁸ Brands like Gucci, Hermès, BMW, Apple, and McDonald’s invest enormous amounts in their retail outlets. The returns are high, with Apple now selling about 15 percent of its products through its own branded stores. Many brands (Samsung, Sony, Nike, Adidas) have established, at a minimum, flagship stores to showcase their products in a brand-controlled environment and for Starbucks the retail environment is one of the core drivers of brand value. Increasingly, the web presence has become, for many brands, an important retail space albeit at significantly lower costs then their physical counterparts. The retail spaces form a crucial part of the brand experience and their design is guided by the core brand elements. 

For service brands and brands that have significant control over their retail outlets customer service and sales personnel are key in delivering the brand experience. Staff behavior needs to follow brand-influenced rules and guidelines. The behavior of the customer-facing personnel is a key influencing factor on customers’ purchase decisions. The experience in an Apple or LouisVuitton shop will reflect the different nature of the brands. The additional brand-specific investments beyond salaries and compensations are relatively low but the return is substantial. For a brand like Starbucks the staff behavior is a core driver of brand value. 

Sponsorships are also strategic brand investments that can build sustainable brand value. At the lowest level they create awareness due to the exposure of the brand logo and provide hospitality opportunities for high-end clients and multipliers. Their deeper brand building occurs only if the sponsorship is properly activated through appropriate brand image advertising support. Nike, Samsung, and Accenture have made efficient use of their sponsorship investments. The investment amounts can be substantial. Samsung Electronics spends about US$100 million on their Olympic sponsorship including activation, and Accenture has spent about US$65 million per year on its Tiger Woods sponsorship.¹⁹ For Accenture, the sponsorship has become a key vehicle for its brand communications. 

Promotions are tactical marketing activities that can build the brand in situations where the brand moves into new markets or needs to revitalize itself. Consumer perception-building promotions communicate distinctive brand attributes and contribute to the development and reinforcement of the brand image.²⁰ On an aggregate level, companies are spending more on promotional activities than on advertising with about 60–75 percent of promotional budgets being spent on sales promotion.²¹ The impact on promotions, however, differs between brand perception building initiatives and pure price promotions. Consumer promotions, such as samples, tempt trial and can assist in shifting consumer perceptions by exposing more potential customers to the brand experience. Short-term financial promotions can help in product introductions and accelerating trial sales in the short term. However, over-use and reliance on financial promotions can destroy brand value on a large scale. The downfall of the US car brands is an example of how a strategic focus on short-term sales push through financial incentives has ruined brand perception and led to the long term decline of brands such as Chrysler, Chevrolet, and Ford. Price promotions destroy brand value as well as companies’ profit margins. 

An academic research study assessed the impact of brand investments on brand value based on the Best Global brands study published annually in BusinessWeek.²² It assessed the impact and optimal levels of key brand investments such as R&D, advertising, and promotional spend on brand value creation. According to the research, the return on R&D spending increases for expenses below US$200 million and reaches saturation point around US$1 billion, beyond which it does not significantly increase brand value. This is supported by industry experience from companies with large R&D budgets, such as Microsoft and Philips.²³ It is also in line with the flat maximum principle²⁴ that states that large changes in spending do not generate big changes in profits. 

The positive impact of advertising expenditure on a company’s stock market performance has consistently been proven most recently in the example of Samsung.²⁵ Marketing expenses also create a significant barrier to market entry, as the high amount of spend required to change consumer perception deters potential competitors from entering a marketing-intensive environment.²⁶ Advertising can directly influence sales, market share, and relative price.²⁷ Advertising contributes most effectively to brand value in a spending range between US$200 million and US$4.6 billion. 

A further study suggests that only large-scale promotions have an impact on brand value, while an investment volume below US$2 billion appears to have little impact. This is not surprising as promotions work mainly as a direct sales impetus that needs scale to be effective.²⁸ 

A study separating the long-term effects of marketing on an increase in sales volume and sales value concluded that most of the increase in volume is due to advertising and discounting, and most of the variation in value is due to distribution and product.²⁹ 

Summary 

There is sufficient evidence to prove that marketing investments have a positive impact on brand value and shareholder value. The value creation is accumulative and sustainable. It materializes in the long term and their effect is therefore not appropriately captured by short-term ROI measures. The proliferation and easy access of scanner and sales data has led to a disproportionate shift towards short-term marketing activities in particular, sales promotions. Sales promotions are the one activity which only creates value if used sparsely and supports the overall brand image. Continual or frequent sales promotions destroy brand value and profit margins. The most effective mix of different marketing activities depends on their brand-building potential. For that reason an ROI approach is required that assesses the long-term brand value creation of each activity and their optimal interplay to achieve the highest return on brand investments. 

NEED FOR A LONG-TERM VIEW 

While marketing ROI and mix models have provided useful tools for quantifying the short-term effect of specific initiatives they have also focused marketing accountability on the short-term. Brand building, however, is a long-term process stretching over several years and requires long-term commitment and vision. With brand assets accounting now for a substantial part of corporate wealth, an ROI approach is needed that reflects the nature of the value creation of the asset.³⁰

No company would use scanner data and changes in short-term sales to assess the return on capital expenditures. The accounting depreciation of many fixed assets such as land and buildings stretches up to 20 years. About 70 percent of the leading 100 global brands are older than 50 years outlasting the life span of the average US corporation and the useful economic life of nearly all other business assets. According to all leading accounting standards acquired brands need to be capitalized on the balance sheet and amortized according to their useful economic life which can be 20 years or more. Brands with an infinite economic use remain a capitalized asset and their value is adjusted downwards (see "Brand Value in Mergers and Acuisitions") according to annual impairment test. Given the fact that on average more than 70 percent of a company’s share price is based on expected cash flows beyond 3 years, and that about 25 years of future cash flow expectations make up about three-fourths of the NPV of most companies, the long-term value of the brand as one of the company’s most important assets should be managed according to its expected long-term value generation.31 This requires looking at the brand as a long-term asset that needs long-term planning and investment. A suitable ROI model therefore needs to address the short- and longterm impact of marketing activities. 

ROI calculation 

In business and financial analysis, ROI is used as a performance measure to assess the efficiency of an investment or to compare the efficiency of a number of different investments. Calculation of ROI is relatively easy, the benefit or return of an investment is divided by its costs. To make the investment worthwhile the benefit has to exceed its costs. The result is expressed as a percentage or a ratio that assesses the investment. The return on investment formula is simple: 

ROI=Net Return/Investment 

If an investment has a negative ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken. 

ROI is a very simple and versatile tool as it can be applied to nearly all investment decisions. The resulting ratio provides a clear and easily understood result. The difficulty with ROI lies in the definition of its two components: return and investment. For example, a marketer may compare two different brands by dividing the revenue that each brand has generated by its respective marketing expenses. A financial analyst, however, may compare the same two brands by dividing the net income of each brand by the total value of all resources that have been employed to make and sell the brands. Thus the ROI can be positive for the marketer but negative for the financial analyst. Understanding the inputs is therefore crucial in assessing ROI. This becomes even more complex and controversial when assessing ROI for specific functions and departments such as marketing or R&D. 

Brand ROI 

Return on brand or marketing investment is defined as the relationship between the spend on and investments in the brand and the economic return they create. Brand ROI is a metric for optimizing marketing spend for the short and long term by comparing brand specific economic returns and investments. An improved brand ROI will lead to increased revenues and profits for the same amount of spend. The assessment is complicated by the time impact of marketing investments and initiatives. Some brand initiatives such as direct mail campaigns focus on short-term sales increase and value creation. Others, such as improved customer experience or brand image campaigns, show their effect on value creation over several years. The short-term ROI assessment is most widely used because it creates an easily measurable link between investment and return, due to the short measurement period. 

For example, if a company spends US$1 million on a short-term initiative that results in incremental brand earnings of US$250,000 then the ROI (the amount of incremental brand earnings for each dollar of marketing spend) is 25 percent. This calculation works if incremental sales and earnings can be properly identified. This entails ensuring that during the period of the campaign no other marketing activities or unexpected events could have caused the increase in revenues. If parallel to the campaign other activities occur separating incremental sales becomes more difficult. This short-term assessment is relatively simple and easily executed. For short-term investments a simple determination of revenue and Brand Earnings per dollar spent for each marketing activity can suffice to make decisions on improving the entire marketing mix. However, strategic brand investments often show their effect with a delay and over a longer period of time, sometimes many years. Such marketing investments include changes in brand positioning, product design, sponsorships, or customer touch points such as customer service, sales staff training, and retail design. Measuring the return on these investments requires assessing their impact over many years. One way many companies tackle the issue is to use brand value as the asset value that relates to the brand or marketing investment. For example, if the value of the brand before the investment amounts to US$1 billion and the company invests in a five-year sponsorship deal with an annual investment of US$20 million the incremental brand value generated by the initiative over the period needs to exceed US$100 million to make the investment worthwhile. If the value of the brand increased to US$1.12 billion and no other additional investments or initiatives were taken then the return of the sponsorship was 120 percent. The additional US$120 million represent the additional NPV of brand cash flows generated by the US$100 million sponsorship investment. The brand value includes the impact of the sponsorship investment on customer perceptions, behaviors, and financial impact (see "Financial Approaches to Valuing Brands" and "The Brand Value Chain"). 

The starting point for brand ROI is brand value and a detailed understanding of the brand value chain, i.e. the link between customer perceptions, behaviors, and their financial impact in the form of revenues and profits. The historical analysis should ideally cover at least a period of 3 years. Longer time frames can be used if there is sufficient data available and there is no change in the underlying market conditions and consumer sentiment. In times of economic crisis and structural change in the economic landscape, as encountered in 2008/9, an analysis of previous crises in different markets can be very helpful. The historical analyses then need to be blended with forward looking information and data such as GDP growth, disposable income, shopping priorities, and consumer sentiment. These analyses will provide trend lines for sales and profits that can be extrapolated forward. Such an exercise will require the collaboration of marketing, planning, and financial professionals. The data quality is important and it may require the purchase of additional market and research data. A variety of statistical modeling tools can be used and can include: econometrics; choice modeling; multivariate random forecasting; and structural equation modeling. 

Ultimately, the purpose of these tools is to identify any cause-andeffect relationships between inputs used to build the brand and their economic outcome. Due to the wide range of factors and variables involved, this is a data-intensive exercise. It is important not to get drawn into impenetrable black box modeling tools that cannot be understood without a PhD in mathematics as this delegates the decision process to some “experts” with the potential exclusion of sufficient checks and balances. The logic and results, as well as the limits of these models, need to be understood by marketing and financial professionals to avoid reliance on the “black box.” Ultimately, all these models have severe limits and should be used as tools and not blindly and mechanically relied upon. A well constructed and understood cause-and-effect model can be a very useful tool for guiding brand-and business-related investment decisions. However, depending on the data a simplified framework may be more appropriate for short-term management. For example, based on an in-depth brand value assessment specific brand perception drivers can be identified such as certain associations and attitudes and used for short-term performance and success metrics on a monthly or quarterly basis assuming the appropriate data are tracked for these time-frames. The strategic brand value drivers can be reassessed or adjusted according to the annual valuation of the brand. The annual ROI calculation is then adjusted based on actual perception metrics as well as behavioral impact and financial delivery i.e. brand earnings and value. 

The brand ROI approach (incremental brand value/brand investment) captures the short-and long-term value creation of brand investments by linking brand specific spending and initiatives to their impact on consumer perceptions, behaviors, and related financial outcomes. An important aspect is the identification and definition of brand investments. There is a tendency to focus or limit brand investments to the traditional marketing communications, in particular, advertising and promotions. While these are key platforms for communicating the brand message, other brand-driven investments can have an equal or even greater impact on value creation. Strategic brand investments such as product development and design can have a large and long lasting impact on brand perception and delivery. Leading multinational companies such as Samsung Electronics, BMW, and Intercontinental Hotels Group use their brand to guide a wide range of customer-facing touch points including product design and development, point of sale and retail design as well as sales force and personnel training. These tend to be more strategic and relatively less frequent than advertising and other communications. 

Once the relationships between specific brand drivers and their economic impact have been identified and quantified, the framework can be used to model and assess the likely success of different brand investments. Based on statistical analyses, the financial value the brand contributes, compared to other value drivers such as distribution, pricing, services, and other factors, can be identified. 

This is a sophisticated metric that balances marketing and business analyses and is used increasingly by many of the world’s leading organizations to measure the economic (that is, cash-flow derived) benefits created by marketing investments. This approach offers a way to prioritize investments and allocate marketing and other resources on a scientific basis. It is, however, intensively data driven and requires sophisticated cause-and-effect modeling tools to link changes in consumer attitudes to changes in their behavior. It also requires deep and rich data sets. However, with modern research techniques and statistical modeling tools, such an approach can be implemented at little or no additional costs if current market research budgets are consolidated and optimized. 

Brand ROI is an advanced metric tool used by a number of forwardthinking firms interested in value-based brand management and aligning the assessment of brand investments with all the investments of the company. Based on the brand value chain and the cause-and-effect modeling results, brand investments are determined, this includes decisions about how much money to spend on the advertising for each brand, product, market, or target group. Once the initiatives have been implemented they need to be constantly checked through actual changes in financial and marketing parameters to see if they are working. 

By using the brand ROI framework, companies can prioritize and optimize their brand investments to increase their brand value. A very successful example is Samsung Electronics that, at the beginning of its turnaround at the end of the 1990s, set ambitious brand value targets and established sophisticated brand analytics to understand and implement strategic and tactical brand investments. Samsung used extensive data on market variables, brand share, marketing expenses, and other variables. It ran simulations to understand how and where marketing investments yielded the highest returns. For example, this led Samsung to their Olympic sponsorship, a reassessment of distribution channels, and a focus on TV advertising in the US in the last 6 months of the year (the main sales season for consumer electronics).³²

ESTABLISHING A BRAND ROI FRAMEWORK 

First, the key elements that influence the brand’s value creation from a customer’s perspective need to be identified and defined. These elements then need to be integrated into a brand value chain that links the brand with financial value creation derived from customers’ purchases. Through a detailed cause and affect analysis and modeling exercise the relationship between brand values, perceptions, touch points and their impact on customer behavior, and the related financial outcomes can be determined and quantified. The pinnacle of this relationship is the value of the brand which breaks down in its components and linkages (the brand value chain). This knowledge emerges from market research or in-market experimentation that shows how existing and prospective customers make choices in a competitive marketplace. 

Each customer touch point is analyzed and assessed according to its contribution to value creation in the context of the other touch points. This exercise identifies and quantifies the elements that impact customer demand and loyalty. 

Segmentation 

It is also necessary to prioritize efforts according to their value creation potential. This means a clear understanding and definition of the target markets. Most brands have several circles of customers ranging from the committed loyalist who will only buy the particular, to opportunistic or occasional customers who consider that brand alongside others and buy it depending on price and convenience. In addition, there are potential customers to whom the brand could be relevant but who are not currently buying the brand. In assessing brand ROI it is important to understand the return options for each customer segment. A price promotion may attract new customers but an improvement in customer service may reduce customer loss. In many sectors customer acquisition costs outstrip the costs of retaining customers. A price promotion provides a short-term increase in revenues whereas the improved customer service secures cash flows from a long-term customer relationship. Customer lifetime value is a useful way of balancing such investments. This is also true when assigning investments in different geographic markets. Investments in countries where the brand is little known but with substantial value potential may require longer-term investments than in established markets. A well-known technology brand used to allocate its brand investments as a percentage of revenues and as a result spending focused heavily on established markets such as US and Europe. This changed once the company had assessed the value of its brands on a global scale revealing the brand value opportunities in some large emerging markets. Based on the brand valuation, the company switched to a brand ROI approach that aligned marketing spending with actual value creation. Since then the return on its marketing investments has nearly doubled. 

Touch points 

To optimize the allocation of marketing resources it is mandatory to identify, understand, and quantify the impact of the brand’s customer touch points. Touch points are all elements that connect the company and the consumer. Key customer touch points are the product or service offer, price, point of sale presence, customer service, packaging, the Internet, sales representatives and shop assistants, media communications including advertising, sponsorships, corporate identity, PR, direct mail, and trade and price promotions. Depending on the brand’s industry and business model some of these touch points will be more relevant or controllable. For example, many services and luxury goods businesses control a significant number or all of their distribution outlets or sales force. They can therefore, directly influence the customer even at the point of sale. Most packaged goods and consumer electronics brands, on the other hand, sell entirely through third parties such as retailers or intermediaries thus having rather less control over the point of sale. At the same time, their products are placed next to, or near, competing offers. They can influence their point of sale through shelf management, retailer sales force training, and education. If they own a strong brand portfolio, such as P&G and Nestlé, they can force weaker brands off the shelf through packaged deals. However, in the end it is consumer pull and the shelf turnover that decides how long retailers are willing to stock a brand. Retail space is so valuable that weak brands disappear relatively quickly. The focus on such brands is therefore on product innovation, packaging, advertising, and price. The ROI framework allows allocation of marketing funds between touch points and optimizes their investments from an overall budget impact perspective. For example, Samsung Electronics’ product design and development as well as channel marketing have been key touch points invested in by the company to achieve its outstanding growth in brand value over a relatively short period of time. Starbucks’ success has been mainly the result of its store design and employee training – advertising has only commenced recently. 

Implementing brand ROI metrics 

The brand ROI analysis also helps to optimize the communication of core values by assessing which mix of values and attributes has the strongest impact on perceptions and behaviors. Messaging content can be aligned with touch points and attributes can be turned up and down to achieve the most economically effective impact. For example, a sports sponsorship can focus on communicating performance as a value while local corporate social responsibility (CSR) efforts can be focused on communicating “togetherness” and care. This means that brand ROI can also guide messaging and content focus at each key touch point. To make ROI a useful management tool for enhancing the value of the brand short- and long-term metrics need to be considered and used. While brand building is a long-term affair, most companies will have already established a certain level of brand value. That value represents the cumulative result of the company’s total brand-building activities. The brand ROI framework is derived from the brand valuation method and the brand value chain. It needs to measure short- and long-term impact of brand and marketing investments. There needs to be a balance between the short- and long-term performances of the brand. If the short-term bias is too strong, investments are focused on short-term sales enhancing activities such as price promotions that will harm the perception and long-term value creation of the brand. If the long-term bias is too strong investments can shift towards hypothetical returns that never actually materialize. Both short- and long-term metrics are required to optimize brand investments. 

Short-term metrics measure the relatively immediate impact of all marketing investments. These include maintenance investments to ensure that the value of the brand does not decline and growth investments to increase the value of the brand. While all companies will want to increase the value of their brand, budget constraints and diminishing returns will limit the investment possibilities. For example, a company may be able to reduce investments in one market or product group in order to take advantage of the opportunities in another market. It is also heavily dependent on competitors’ activities. 

For a brand-appropriate ROI approach, perception and behavioral data need to be measured and linked as perceptions are lead indicators while behavior tends to lag. Ultimately, brand investments need to deliver financial results. That does not mean every activity will yield instant results. It can take years to communicate a new brand message before it creates economic value. However, if after 18 months no positive impact can be detected the messaging needs to be scrutinized and if necessary abandoned. Most of the available marketing-mix models and pricing and promotion analysis tools measure the short-term impact (1 to 3 months) of marketing activities on sales. This is helpful to fine-tune tactical marketing activities to improve the short-term performance of the brand. Promotional tactics, in particular, are easily countered by competition so their effects are usually short-lived. Apart from the short-term sales impact, some marketing activities also have a long-term impact. There are two types of long-term brand investments. The first type are strategic investments such as positioning, corporate identity, brand advertising campaigns, Internet presence, product development and design, and shop design that are made at less frequent intervals and set the scene for other brand investments. Some of these strategic investments last a very long time and only require periodic adjustment. The positioning and corporate identity of a brand can remain unchanged for many years. Some even remain with little adjustment for decades. The positioning and identity of theBMWbrand has been consistent since the 1990s. The core positioning of the Coca- Cola brand stems from the 1970s. The second type of long-term brand investments are cumulative brand investments such as advertising that build brand value through frequency of use. The more consumers are exposed to brand messaging the better their knowledge about the brand will become. 

While measuring short-term sales impact is relatively easy, assessing long-term brand impact is much more difficult. It requires the ability to understand, identify, and quantify cause and affect relationships between marketing activities, consumer perceptions, consumer behavior, and financial outcomes. This requires the collection and modeling of a complex set of marketing and financial data. The quality of the analysis is dependent on the quality of the questionnaire and the survey sample which needs to be representative of buyers in the specific category/ industry being analyzed. Using actual consumer behavior rather than their responses to a survey questionnaire has the advantage of eliminating biases from responses that do not accurately reflect consumers brand perceptions, but the disadvantage is that it limits the responses observed to brands and products purchased even though the consumer may have awareness and perceptions about brands they have not purchased. It is therefore best to use a combination of both approaches. There is also the issue of the model quality, accuracy, and predictability. There is a difference between parallel moving metrics measured through correlating the respective data and causal relationships that can measure cause and effect. Advanced statistical analyses such as structural equation and least squares modeling techniques can deliver impressive results in identifying and predicting causal relationships. These techniques can be used to model the brand value chain and derive predictive outcomes. 

Once the brand value chain has been established and the financial value of the brand calculated, key metrics can be identified for use in an on-going measurement of the impact and return on brand investments. If the brand value chain model is established and in place then new marketing data can be integrated into the ROI model to assess the effectiveness of brand investments. ROI can be assessed on an aggregate level of brand value as well as on single components and their interaction with the brand value. The individual components can be integrated into a scorecard for managing brand investments and activities. Some of the key metrics are as follows: 

◾Brand awareness: This measures whether consumers are aware of the brand and if so, at what level. Aided awareness measures whether consumers connect the brand with the category when the name is mentioned. If aided awareness is low then the brand has not penetrated consumers’ minds. Unaided awareness shows that consumers associate the brand without being prompted with the category. Top of mind measures whether the brand is the first the consumers think of in the specific category. It demonstrates a strong presence of the brand in consumers’ minds. 

◾Brand knowledge: This metric measures the extent of the consumers’ knowledge about the brand beyond the name. The greater the brand knowledge the better consumers can assess the brand’s offer. 

◾Brand attributes and association: This measures the attributes consumers associate with the brand and how the brand performs on each attribute relative to its competitors. They represent the functional (e.g., quality) and emotional (e.g., status, image) utility the brand provides. In order to be effective a brand needs to represent a unique mix of attributes and associations that differentiate the brand from competitors and make its offers relevant to consumers. 

◾Differentiation: This is derived from the performance on brand attributes and associations. Differentiation ensures that the brand stands out from its competitors. 

◾Relevance: In order to be considered, a brand needs to provide a relevant offer that meets consumer need. Price or very specific brand elements can limit consumer relevance. 

◾Consideration: This is the first step in a potential purchase. Here the brand is seriously considered as purchase option. 

◾Preference: Being the desired choice indicates a clear preference and likelihood of purchase. There need to be significant reasons for nonpurchase which tend to be price and financially based. 

◾Choice: The brand is the consumer’s choice and his/her intended purchase 

◾Satisfaction: This metric only refers to customers who have previous purchasing experience of the brand. Customer satisfaction is better in measuring functional or material attributes than emotional factors. 

◾Advocacy: This measures the likelihood of the consumer recommending the brand to others. Advocacy is key in driving “word of mouth” advertising. This is one of the most powerful purchase drivers as it usually comes from credible and trusted parties such as family, friends, colleagues, or specialized agencies such as JD Power, Which, or Stiftung Warentest. 

◾Loyalty: This is an important metric for sustainability of brand value. The more loyal the customer base is the more predictable the brand’s cash flow will be. In addition, brands that have a very loyal customer base need to spend less on customer acquisition which in many service businesses is a large cost factor. 

◾Sales price: Price is an indication of the appreciation of the brand relative to its competitors and creates direct value at it is a key component of the companies’ revenues. An increase in price directly increases profit margins but only if the net results exceed potential drops in volume and frequency. 

◾Sales volume: This is an indication about the relevance of the offer. Sales volume also contributes to revenues and works in tandem with price. 

◾Sales frequency: This is another indicator of relevance and also contributes directly to revenues. 

◾Intangible earnings: These are the earnings entirely attributable to the intangibles of the business. They are calculated by deducting the brand operating costs, a return for the capital employed, and tax payments from the revenues that are generated. Intangible earnings are similar to concepts such as EVA and economic profit. 

◾Brand impact: This metric measures the impact the brand has on customer choice relative to other intangibles. Brand impact is measured for each purchase driver and aggregated to an overall percentage representing the impact of the brand on revenues and profit generation. 

◾Brand earnings: This number represents the earnings generated by the brand. It is calculated by multiplying the brand impact percentage with intangible earnings. 

◾Brand value: This metric look at the overall value creation of the brand within the company’s business context. Brand value is calculated as the NPV of the future expected brand earnings discounted with the weighted average cost of capital (WACC). 

The use of the brand valuation framework for ROI calculations depends on the availability and frequency of the reporting of the above data. Many research and financial data are available on a monthly basis. Once the value of the brand has been calculated it can easily be updated depending on the internal data flow and availability. Some companies update their brand value as an on-going process while other companies value their brands on a quarterly or annual basis making it part of the overall business review. Most companies will already collect the data that are necessary to calculate brand value and ROI. If this is not the case then these frameworks can help companies adjust and redirect their research budgets toward the brand value framework. Brand value is at the core of ROI as it represents the brand’s contribution to the underlying business. Brand-building activities need to be assessed according to their value creation which means brand and subsequently shareholder value. Each initiative and investments needs to create economic value. The brand ROI calculation is therefore: 

Brand ROI=Incremental brand value/Brand investment 

As brand value represents the NPV of all expected brand earnings marketing activities need to enhance brand value over and above their cost and the cost of capital or WACC. That means the expected incremental NPV of the respective activity needs to be larger than its cost. The brand ROI approach aligns the assessment of brand investments with that of other company assets, and puts marketing expenses on par with other investments such as capital expenditures. The ROI approach treats the brand as an asset that needs to be maintained and built according to the same principle as other business assets. 

Measuring brand ROI requires a balance between short- and long-term metrics. Short-term metrics ensure that marketing activities impact consumers’ behaviors and create financial value. This can be achieved through the on-going analysis of sales data provided by scanners or other sources. At the same time, the other metrics identified earlier need to be monitored to ensure that strategic long-term brand investments can be implemented and that short-term initiatives do not undermine brand perceptions, e.g., price promotions. In order to ensure that marketing activities deliver value companies need to classify investments according to their goal and impact. Price promotions will show immediate sales uplift but, if they become the focus of marketing investments they will destroy brand value in the long term. This will be picked up in the brand perception research. On the other hand, a strategic marketing initiative needs not only to influence perceptions but also behaviors and their financial results. The brand ROI framework and metrics allow for such a balance. It is also important not to limit brand investments to traditional marketing communications such as advertising, promotions, web presence, corporate identity, and PR. Product development and design, pricing strategy, point of sale presence, channel marketing, sales, and customer service personnel training can be equally important. In fact for many brands they are more important than traditional communications. One of the most effective brand-building investments for Samsung and Apple were product development and design as well as channel marketing. Apple has heavily invested in its own distribution which now accounts for more than 20 percent of its revenues. The retail investments of luxury brands such as Louis Vuitton, Prada, and Gucci substantially outstrip their media investments. The brand ROI can differ significantly by initiative. Companies therefore need to measure ROI in the short- and long-term. 

CONCLUSION 

Most marketing investments create brand and shareholder value. They are cumulative and sustainable, building on a company’s most valuable assets. As such, marketing expenditures should not be only measured by their immediate impact on sales but on their creation of sustainable brand and shareholder value. The availability of, and easy access to, sales data from store scanners and the Internet has led companies to shift marketing expenses to short-term activities such as sales promotions, direct mail, and the Internet as their success is easily measured against clear financial results. However, short-term marketing activities as a strategy can destroy brand value and ultimately shareholder value. To capture the long-term value creation of brand investments, companies need to employ sophisticated cause-and-effect models that can measure and optimize the impact of each activity on customer perceptions, behaviors, and their financial impact. Only then can a meaningful return on investment be assessed and calculated. Although complex, such models should not rely on impenetrable black box approaches with questionable correlations but on sound business models that link perception to value creation. A brand ROI approach based on the economic value of the brand and the brand value chain provides a framework for assessing and managing short- and long-term investments in brand assets. After all efficient brand-building is part of a company’s responsibility to the shareholders who provide the financial means. Brand ROI is a framework that, with the right data input, can be sufficiently robust and representative to measure the impact of marketing investments on brand performance and sustainability. The alternative would be to remain at the short-term level and sacrifice brand and shareholder value.

NOTES

1. See Marketing Week 3, October 2008, this quote has also been attributed to John Wannamaker and Henry Ford.
2. Prasad A. Naik, Kalyan Raman and Russell S. Winer, 2005, pp. 25–34.
3. Booz Allen Hamilton, 2006.
4. superbrands.net
5. E.F. Loftus and G.R Loftus, 1980; Kevin L. Keller, 1993, pp. 1–22.
6. Best Global Brands, 2008; Financial Times, 2009, PriceWaterhouseCoopers, Markenwert wird zunehmend als Unternehmenswert anerkannt, 2006; Brand Leverage, 1999; Peter Doyle, 2000.
7. Vithala R. Rao, Manoj K. Agarwal, and Denise Dahlhoff, 2004, pp. 126–41; Amit M. Joshi and Dominique M. Hanssens, 2007.
8. PriceWaterhouseCoopers, 2008a.
9. M.G. Dekimpe, and D. Hanssens, 1995, pp. 1–21.
10. Gert Assmus, Johan U. Farley, and Donald R. Lehmann, 1984, pp. 65–74; Chiquan Guo, 2003; Demetrios Vakratsa and Tim Ambler, 1999, pp. 26–43.
11. Robert E. Smith, 1993, pp. 204–19.
12. Joseph W. Alba and J. Wesley Hutchinson, 1987, pp. 411–54; Joseph W. Alba, J. Wesley Hutchinson and John G. Lynch, 1991, pp. 1–49.
13. R. J. Kent and C. T. Allen, 1994, pp. 97–105; Demetrios Vakratsas and Tim Ambler, 1999, pp. 26–43.
14. C. J. Cobb-Walgren, C. A. Ruble and N. Donthu, 1995, pp. 25–4.
15. Carl F. Mela, Sunil Gupta and Donald R. Lehmann, 1997, pp. 248–61.
16. Margaret C. Campbell and Kevin L. Keller, 2003, pp. 292–304; R. J. Kent and C. T. Allen, 1994, pp. 97–105.
17. Fang Wang, Xiao-Ping Zhang and Ming Ouyang, 2007.
18. Financial Times, 2 August 2003.
19. Sports Business Daily, 2006.
20. Kevin L. Keller, 1993, pp. 1–22.
21. G. Belch and A. Belch, 2004.
22. Singfat Chu Chu and Hean Tat Keh, 2006.
23. R. Berner and D. Kiley, 2005.
24. D.S. Tull, Van R. Wood, D. Duhan, T. Gillpatrick, K.R. Robertson, and J.G. Helgeson, 1986, pp. 25–32.
25. U. Ben-Zion, 1978, pp. 224–9; M. Corstjens, and J. Merrihue, 2003, pp. 114–21; Fang Wang, Xiao-Ping Zhang and Ming Ouyang, 2007.
26. Y.K. Ho, H.T. Keh and J. Ong, 2005, pp. 3–14.
27. A. Chaudhuri, 2002, pp. 33–43.
28. Singfat Chu Chu and Hean Tat Keh, 2006.
29. Berk Ataman, Harald J. van Heerde and Carl F. Mela, 2006.
30. “An Analytic Approach to Balancing Marketing and Branding ROI,” 2007.
31. Tom Koller, Marc Goedhart, David Wessels, 2005, pp. 277–8; Mckinsey 2004.
32. John Quelch and Anna Harrington 2005; Best Global Brands, 2002; M. Corstjens and J. Merrihue, 2003, pp. 114–21; R. Berner and D. Kiley, 2005, pp. 56–63; Kris Frieswick, 2001.

BIBLIOGRAPHY

D. Aaker, Building Strong Brands (New York: Free Press, 1991a).

D. Aaker, Managing Brand Equity (New York: Free Press, 1991b).

D. Aaker, Building Strong Brands (New York: Free Press, 1996), p. 336.

D. A. Aaker and R. Jacobson, “The Financial Information Content of Perceived Quality,” Journal of Marketing Research, 31, 1994.

D. A. Aaker and R. Jacobson, “The Value Relevance of Brand Attitude in High Technology Markets,” Journal of Marketing Research, 38 (November), 2001, 485–93.

J. W. Alba and J. W. Hutchinson, “Dimensions of Consumer Expertise,” Journal of Consumer Research, 13, 1987, 411–54.

J. W. Alba, J. W. Hutchinson and J. G. Lynch, Memory and Decision Making, in: H. H. Kassarjian and T. S. Robertson (eds) Perspectives in Consumer Behavior, 4th edn (New York: Prentice-Hall, 1991), pp. 1–49.

Ambac Assurance Corporation, “Dunkin’ Brands Securitization Marks Milestone for Innovative Private Equity Financing 2007,” New York, 2007.

American Marketing Association (AMA) 2006, retrieved from: marketingpower.com.

“An Analytic Approach to Balancing Marketing and Branding ROI,” 2007, retrieved from: Enumerys.com.

B. Ataman, H. J. van Heerde and C. F. Mela, “The Long-term Effect of Marketing Strategy on Brand Performance,” 2006, available at: http://www.zibs.com/ techreports/The%20Long-term%20Effect%20of%20Marketing%20Strategy.pdf.

AT&T Inc. Annual Report, 2005.

G. Assmus, J. U. Farley, and D. R. Lehmann, “How Advertising Affects Sales: Meta- Analysis of Econometric Results,” Journal of Marketing Research, 21 (February), 1984, 65–74.

Associated Press, “Honda, Porsche Lead in J. D. Power Quality Study,” June 4, 2008.

L. Austin, “Accounting for Intangible Assets,” University of Auckland Business Review, 9 (1), 2007, 64–5.

N. Bahadur, E. Landry, and S. Treppo, “How to Slim Down a Brand Portfolio,” McLean, VA: Booz Allen, 15 November 2006.

F. Balfour, Fakes! “The Global Counterfeit Business is Out of Control, Targeting Everything from Computer Chips to Life-saving Machines,” BusinessWeek, February 7, 2005, available at: http://www.businessweek.com/magazine/content/05_06/ b3919001_mz001.htm

BAV Electronics 2006 results, available at: brandassetvaluator.com.au.

M. H. Bazerman, “Is There Help for the Big Ticket Buyer?” Boston, MA: Harvard College, September 17, 2001.

G. Belch and A. Belch, Advertising and Promotion: An Integrated Marketing Communications Perspective (New York: McGraw Hill, 2004).

U. Ben-Zion, “The Investment Aspect of Non-production Expenditures: An Empirical Test,” Journal of Economics and Business, 30 (3), 1978, 224–9.

I. E. Berger and A. A. Mitchell, “The Effect of Advertising on Attitude Accessibility, Attitude Confidence, and the Attitude-behavior Relationship,” Journal of Consumer Research, 16 (December) 1989, 269–79.

R. Berner, “The New Alchemy at Sears,” BusinessWeek, April 16, 2007, 58–60.

R. Berner and D. Kiley, “Global Brands,” BusinessWeek, 5 (12), 2005, 56–63.

Best Global Brand, 2002, BusinessWeek, August 5, 2002.

Best Global Brand, 2008, BusinessWeek, September 29, 2008.

Best Global Brands, 2009, Financial Times, April 29, 2009.

Best Canadian Brands, 2008, available at: Interbrand.com.

“Beyond Petroleum Pays Off For BP,” Environmental Leader, January 15, 2008.

S. Bharadwai, “The Mystery and Motivation of Valuing Brands in M&A,” November 13, 2008, Atlanta, GA: knowledge@emory.

T. Blackett,What is a Brand?Brands and Branding (London: Profile Books, 2003), p.14.

Bloomberg, February 26, 2007, available at: www.bloomberg.com.

Booz & Co., “The Future of Advertising: Implications for Marketing and Media,” February, McLean, VA: Booz Allen, 2006.

S. Bowers, “Woolworth Lives Again as Online Brand,” The Guardian, February 2, 2009.

“Brand Leverage,” McKinsey Quarterly, May 1999, available at: Mckinsey.com.

“Brand Valuation: The Key to Unlock the Benefits from your Brand Asset,” Interbrand, 2008.

Brand Valuation Forum, “10 Principles of Monetary Brand Valuation,” Berlin, June 18, 2008.

BrandZ “Top 100 Most Valuable Global brands 2009,” Millward Brown Optimor, available at: millwardbrown.com.

T. Buerkle, “BMW Wrests Rolls-Royce Name Away From VW,” The New York Times, July 29, 1998.

Burson-Marstellar, “Most Prized Reputation Rankings,” July 17, 2008, available at: http://www.burson-marsteller.com/Innovation_and_insights/blogs_ and_podcasts/BM_Blog/Lists/Posts/Post.aspx?List=75c7a224-05a3-4f25-9ce5-2a90a7c0c761&ID=45.

M. C. Campbell and K. L. Keller, “Brand Familiarity and Advertising Repetition Effects,” Journal of Consumer Research, 3 (September), 2003, 292–304.

P. Chaney, T. Devinney and R. Winer, “The Impact of New Product Introductions on the Market Value of Firms,” Journal of Business, 64, 1991, 573–610.

A. Chaudhuri, “How Brand Reputation Affects the Advertising-brand Equity Link,” Journal of Advertising Research, 42, 2002, 33–43.

S. C. Chu, and H. T. Keh, Brand Value Creation: Analysis of the Interbrand- BusinessWeek Brand Value Rankings (Berlin, Springer Science, 2006).

C. J. Cobb-Walgren, C. A. Ruble and N. Donthu, “Brand Equity, Brand Preference, and Purchase Intent,” Journal of Advertising, 24 (3), 1995, 25–4.

Coca-Cola Company, The, Annual Report 2008, available at: http://www.thecocacolacompany.com/investors/form_10K_2008.html.

Corporate Executive Board, “What companies do best, 2009” BusinessWeek, June 23, 2009.

M. Corstjens and J. Merrihue, “Optimal Marketing,” Harvard Business Review, 81, (October) 2003, 114–21.

M. Deboo, “Ad Metrics and Stock Markets: How to Bridge the Yawning Gap,” Admap, 484, June, 2007, 28–31.

M. G. Dekimpe and D. Hanssens, “The Persistence of Marketing Effects on Sales,” Marketing Science, 14, 1995, 1–21.

N. Delcoure, Corporate Branding and Shareholders’ Wealth (Huntsville, TX: Sam Houston State University, 2008).

DIN ISO Project Brand Valuation, available at: www.din.de. “Do Fundamentals Really Drive the Stock Market?” 2004, available at: Mckinsey.com.

P. Doyle, Value-Based Marketing (New York: John Wiley & Sons, 2000).

P. K. Driesen, “BP-Back to Petroleum,” IPA Review, March 2009.

P. F. Drucker,The Practice of Management (Harper & Brothers, New York, 1954) p. 32.

K. Dubas, M. Dubas and P. Jonsson, “Rationality in Consumer Decision Making,” Proceedings of the Academy of Marketing Studies, 10, 2, Las Vegas, 2005.

G. Edmondson and D. Welch, “VW Steals a Lead in Luxury,” BusinessWeek, December 6, 2004.

Eisbruck, Jan, “Introduction Royal(ty) Succession: The Evolution of IP-backed Securitisation, Building and Enforcing Intellectual Property Value 2008,” 21, Moody’s Investors Service.

Euromoney Magazine, July 18, 2006.

F. Fehle, S. M. Fournier, T. J. Madden and D. G. T. Shrider, “Brand Value and Asset Pricing,” Quarterly Journal of Finance and Accounting, January 1, 2008.

Financial Times, Invasion, August 2, 2003.

Financial Times, “Global Brands,” FT Special Report, April 29, 2009.

C. Forelle, “Europe’s High Court Tries on a Bunny Suit Made of Chocolate,” WSJ, June 11, 2009.

K. Frieswick, “New Brand Day:Attempts to Gauge the ROI of Advertising Hinge on Determining a Brand’s Overall Value,” November 1 2001, available at: CFO.com.

J. Gerzema, and E. Lebar, Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It (New York: John Wiley & Sons, 2008).

“Global 500,” BrandFinance, April 2009, available at: brandfinance.com.

C. Guo, “Co-integration Analysis of the Aggregate Advertising-consumption Relationship,” Journal of the Academy of Business and Economics, February 2003.

J. S. Hillery, “Securitization of Intellectual Property: Recent Trends from the United States,” Washington/Core, March 2004, p. 17.

Y. K. Ho, H. T. Keh and J. Ong, “The Effects of R&D and Advertising on Firm Value: An Examination of Manufacturing and Non-manufacturing Firms,” IEEE Transactions on Engineering Management, 52, 2005, 3–14.

D. Horsky and P. Swyngedouw, “Does it Pay to Change Your Company’s Name? A Stock Market Perspective,” Marketing Science, 6 (4), 1987, 320–35.

“How Analysts View Marketing,” IPA report, July 28, 2005.

J. Huckbody, “Pierre Cardin, He’s Everywhere,” Fairfax Digital, August 1, 2003

IAS 38, International Accounting Standards Board, available at: www.iasb.org.

Indiaprwire, “Brand Licensing to be the Next Big Thing in India,” October 11, 2008. Interbrand.com.

International Bottled Water Association and the Beverage Marketing Corporation, 2008, available at: www. botteledwater.org.

International Valuation Standards Council (IVSC) Discussion, “Determination of Fair Value of Intangible Assets for IFRS Reporting Purposes Paper,” July 2007.

Investment Dealer’s Digest, “The Scramble to Brand: Not all Wall Street Banks are Equal – or Are They?” October 27, 2003.

J. Jacoby, Is it Rational to Assume Consumer Rationality? Some Consumer Psychological Perspectives on Rational Choice Theory (New York: Leonard N. Stern Graduate School of Business, 2001).

“J. D. Power Quality Study,” The Associated Press, June 4, 2008.

N. Jones and A. Hoe, “IP-backed Securitisation: Realising the Potential,” Linkelaters, 2008.

A. M. Joshi and D. M. Hanssens, “Advertising Spending and Market Capitalization,” working paper, UCLA Anderson School of Management, April 2007.

T. Kalwarski, “Investing in Brands,” BusinessWeek, July 23, 2009.

K. L. Keller, “Conceptualizing, Measuring, and Managing Customer-based Brand Equity,” Journal of Marketing, 57 (1), 1993, 1–22.

K. L. Keller, Strategic Brand Management: Building, Measuring, and Managing Brand Equity, (Upper Saddle River, NJ: Prentice Hall, 1997).

K. L. Keller, Marketing Management, 13th edn (Upper Saddle River, NJ, Prentice-Hall 2009).

K. L. Keller and D. R. Lehmann, “How, Brands Create Value?” Marketing Management, (May/June 2003) p. 23.

R. J. Kent, and C. T. Allen, “Competitive Interference Effects in Consumer Memory for Advertising: The Role of Brand Familiarity,” Journal of Marketing, 58 (3), 1994, 97–105.

J. Knowles, “Value-based Brand Measurement and Management,” Interactive Marketing, 5 (1), 2003, 40–50.

T. Koller, M. Goedhart and D.Wessels, Valuation: Measuring and Managing the Value of Companies 4th edn (New York: John Wiley & Sons, 2005).

P. Kottler, A Framework for Marketing Management (Upper Saddle River, NJ: Prentice-Hall, 2001) p. 188.

P. Kottler, and W. Pförtsch, B2B Brand Management (Berlin: Springer, 2006).

KPMG, “Purchase Price Allocation in International Accounting,” 2007, available at: http://www.kpmg.ch/docs/Purchase_price_allocation_-_englisch_NEU.pdf.

H. Lambert, “Britons on the Prowl,” The New York Times, November 29, 1987.

P. Little, D. Coffee and R. Lirely “Brand Value and the Representational Faithfulness of Balance Sheets,” Academy of Accounting and Financial Studies Journal, September 2005.

E. F. Loftus and G. R. Loftus, “On the Permanence of Stored Information in the Human Brain,” American Psychologist, 35, 5, 409–20, 1980.

Lord Hanson, Timesonline, November 2, 2004.

“Lord of the Raiders,” The Economist, November 4, 2004.

T. Madden, F. Fehle and S. Fournier, “Brands Matter: An Empirical Investigation of Brand-building Activities and the Creation of Shareholder Value,” Journal of the Academy of Marketing Science, 34 (2), 2006, 224–35.

Markenbewertung – Die Tank AG, Absatzwirtschaft, 2004.

T. McAuley, “Brand Family Values,” CFO Europe Magazine, December 31, 2003.

McKinsey “Unlock Your Financial Brand,” Marketing Practice, 2003, available at: McKinsey.com.

McKinsey “Do Fundamentals Really Drive the Stock Market?,” 2004, available at: McKinsey.com.

C. F. Mela, S. Gupta and D. R. Lehmann, “The Long-Term Impact of Advertising and Promotions on Consumer Brand Choice,” Journal of Marketing Research, 34, 1997, 248–61.

Milward Brown, Optimor, Top 100 most powerful brands 2008, available at: www.millwardbrown.com.

K. Moore, and S. Reid The Birth of Brand: 4000 Years of Branding History (McGill University, MPRA: Munich 2008) pp. 24–5.

S. Moorthy and H. Zhao “Advertising Spending and Perceived Quality,” Marketing Letters 11(3), 2000, 221–33.

Morgan Stanley, “The Relationship of Corporate Brand Strategy and Stock Price,” U.S Investment Research, June 13, 1995.

“Mother and Child Reunion: Will the AT&T/SBC Merger Build or Destroy Value?” Knowledge@Wharton, March 30, 2005.

J. Murphy (ed.), Brand Valuation (London: Hutchinson Business Books, 1989).

D. Muir, retrieved on September 16, 2009, p. 2 from: http://www.wpp.com/NR/rdonlyres/F157F2FF-BF45-409C-9737-C3550BAB15F3/0/TheStore_newsletter_006_ThePowerofBrands.pdf.

P. A. Naik, K. Raman and R. S. Winer, “Planning Marketing-Mix Strategies in the Presence of Interaction Effects,” Marketing Science, 24 (1), 2005, 25–34.

Nielson Company, The Winning Brands, retrieved from www.nielson.com. nexcen.com.

Dr. M. A. Noll, “The AT&T Brand: Any Real Value?” telecommunicationsonline, November 1, 2005.

S. Northcutt, Trademark and Brand (SANS Technology Institute, 2007). OECD.org.

Pernod Ricard, Press Release, March 31, 2008.

N. Penrose, Valuation of Trademarks, in Brand Valuation (London: Hutchinson Business Books, 1989) pp. 37–9.

R. Perrier, (ed.) Brand Valuation (London: Premier Books 1997).

M. E. Porter, Competitive Advantage (New York: Free Press, 1985).

C. Portocarrero, “Seeking Alpha,” WeSeed, February 3, 2009.

PricewaterhouseCoopers, “Markenwert wird zunehmend als Unternehmenswert anerkannt,” April 7, 2006.

PricewaterhouseCoopers “Advertising Pay Back,” 2008.

PricewaterhouseCoopers, “Kaufpreisallokation: Mehr als nur Accounting,” 2008.

J. A. Quelch, and K. E. Jocz, “Keeping a Keen Eye on Consumer Behaviour,” February 5, 2009.

J. Quelch and A. Harrington, “Samsung Electronics Company: Global Marketing Operations,” Harvard Business School, February 17, 2005.

V. R. Rao, M. K. Agarwal and D. Dahlhoff, “How Is Manifest Branding Strategy Related to the Intangible Value of a Corporation?” Journal of Marketing, 68 (4), 2004, 126–41.

E. S. Raymond, The Jargon File, December 29, 2003, see: www.catb.org/jargon/.

F. F. Reichheld, “The One Number You Need to Grow,” Harvard Business Review, e-book, March 3, 2003.

Reuters.com

M. Ritson, “Mark Ritson on Branding: BrandZ Top 100 Global Brands Shows Strength in Numbers,” Marketing Magazine April 28, 2009, available at: www.marketingmagazine.co.uk, royaltysource.com.

G. Salinas, The International Brand Valuation Manual, John Wiley & Sons, 2009.

Samsung Concludes Contract with the International Olympic Committee to Sponsor Olympic Games Through 2016, 23 April 2007, available at: Samsung.com.

S. Schwarzkopf “Turning Trade Marks into Brands: how Advertising Agencies, Created Brands in the Global Market Place, 1900–1930,” CGR Working Paper 18.

D. Shenk, Data Smog: Surviving the Information Glut (New York: HarperCollins, 1998).

S. Srinivasan and D. M. Hanssens, “Marketing and Firm Value, Metrics, Methods, Findings, and Future Directions,” Journal of Marketing Research, 46 (3), 2009.

R. E. Smith, “Integrating Information From Advertising and Trial: Processes and Effects on Consumer Response to Product Information,” Journal of Marketing Research, 30, (2), 1993, 204–19.

Sports Business Daily, September 26, 2006.

“Study Shows Brand-building Pays Off For Stockholders,” Advertising Age, 65, 1994, 18, superbrands.net.

“Top 100 Global Licensors”, Licensemag.com. April, 2009.

D. S. Tull, Van R. Wood, D. Duhan, T. Gillpatrick, K. R. Robertson and J. G. Helgeson “Leveraged Decision Making in Advertising: The Flat Maximum Principle and its Implications,” Journal of Marketing Research 23, 1986, 25–32.

D. Vakratsas and T. Ambler, “How Advertising Works, What Do We Really Know?” Journal of Marketing, 63 (1), January, 1999, 26–43.

L. Vaughan-Adams, “ICL name to vanish from tech heritage as Fujitsu rebrands,” The Independent, June 22, 2001.

D. Walker, “Building Brand Equity through Advertising,” IPSOS-ASI Research Article 5, 2002.

F. Wang, X.-P. Zhang and M. Ouyang, “Does Advertising Create Sustained Firm Value? The Capitalization of Brand Intangible,” Academy of Marketing Science, September 21, 2007.

Which, “Switching from Bottled to Tap Water, Tap vs Bottled Water,” available at: www.which.co.uk.

Woman’s Wear Daily, “Hermès’ Smart Car. . . Uniqlo’s Warm Up. . . McQ Prints It Out,” November 10, 2008.

TheWorld Customs Organization and Organisation for Economic Co-operation and Development.

T. Yeshin, Advertising, (London: Thompson Learning, 2006).

A. Zednik and A. Strebinger, “Brand Management Models of Major Consulting firms, Advertising Agencies and Market Research Companies: A Categorisation and Positioning Analysis of Models Offered in Germany, Switzerland and Austria,” Brand Management, 15 (5), 2008, 301–11.