THE IMPACT OF BRAND VALUE ON MARKET PERFORMANCE INDICATORS OF HIGH-TECHNOLOGY ENTERPRISES

Milica Jovanović, Bojan Krstić, Sandra Milanović

DOI Number
https://doi.org/10.22190/FUEO200612023J
First page
317
Last page
328

Abstract


Brand valuation gained in importance in the 1980s, when a difference between the price at which some enterprises are bought and their value, according to the balance sheet, was noticed. Brand value can be considered an intangible asset of an enterprise, whose impact on the market performance indicators must be taken into account. This paper examines the relationship between brand value and selected market performance indicators using correlation and regression analysis. The analysis is based on Interbrand data on brand value and annual reports of selected enterprises from high-technology sector. The sample included top 5 enterprises from high - technology sector, whose corporate brands are on the list of the 100 most valuable brands, in all years of the analysed eight-year period (from 2012 to 2019). This paper discovered a statistically significant positive relationship between brand value and market performance indicators and that brand value positively influences those performances of high - technology enterprises. The focus of this study is on the following market performance indicators: market capitalization, Tobin's Q, market to book ratio and earnings per share. The research contributes to the field of brand value management and emphasizes the importance of investments in corporate branding process.


Keywords

brand value, market performance, market capitalization, Tobin's Q, market to book ratio, earnings per share

Full Text:

PDF

References


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

Arora, S., & Chaudhary, N. (2016). Impact of Brand Value on Financial Performance of Banks: An Empirical Study on Indian Banks. Universal Journal of Industrial and Business Management, 4(3), 88-96. https://doi.org/10.13189/ujibm.2016.040302

Balsam, S., & Lipka, R. (1998). Share Prices and Alternative Measures of Earnings per Share. Accounting Horizons, 12(3), 234-249.

Bart, M. E., Clement, M. B., Foster, G., & Kasznik, R. (2003). Brand values and capital market valuation. In: Hand, J. & Lev, B. (Eds.), Intangible assets: values, measures and risk (pp. 153-184). New York: Oxford University Press.

Barth, M. E., Clement, M. B., Foster, G., & Kasznik, R. (1998). Brand Values and Capital Market Valuation. Review of Accounting Studies, 3, 41–68. https://doi.org/10.1023/A:1009620132177

Basgoze, P., Yildiz, Y., & Camgoz, S. M. (2016). Effect of brand value announcements on stock returns: empirical evidence from Turkey. Journal of Business Economics and Management, 17(6), 1252-1269. https://doi.org/10.3846/16111699.2016.1153517

Berzkalne, I., & Zelgalve, E. (2014). Intellectual capital and company value. Procedia - Social and Behavioral Sciences, 110, 887-896. https://doi.org/10.1016/j.sbspro.2013.12.934

Blackett, T. (1991). The Valuation of Brands. Marketing Intelligence & Planning, 9(1), 27-35. https://doi.org/10.1108/02634509110135442

Brand Finance (2000). Brand Valuation: Measuring and Leveraging your Brand, Retrieved from: http://www.markenlexikon.com/texte/brandfinance_brand_valuation_leverage_may_2000.pdf, Accessed on: February 10, 2020.

Buzdar, M. F., Janjua, S. Y., & Khurshid, M. A. (2016). Customer-based brand equity and firms’ performance in the telecom industry. International Journal of Services and Operations Management, 25(3), https://doi.org/10.1504/IJSOM.2016.079516

Chen, M., Cheng, S., & Yuchang, H. (2005). An empirical investigation of the relationship between intellectual capital and firms’ market value and financial performance. Journal of Intellectual Capital, 6(2), 159-176. https://doi.org/10.1108/14691930510592771

Christodoulides, G., & De Chernatony, L. (2010). Consumer-based brand equity conceptualisation and measurement: a literature review. International Journal of Market Research, 52(1), 43-66. https://doi.org/10.2501/S1470785310201053

Cohen, J. (1992). Quantitative methods in psychology: A power primer. Psychological Bulletin, 112(1), 153-159. https://doi.org/10.1037/0033-2909.112.1.155

Copraro, A. J., & Srivastava, R. K. (1997). How do reputations affect corporate performance?: Has the influence of financial performance on reputation measures been overstated?. Corporate Reputation Review, 1(1), 86–92. http://dx.doi.org/ 10.1057/palgrave.crr.1540023

Davidson, H. (1998). The next generation of brand measurement. The Journal of Brand Management, 5(6), 430-439. https://doi.org/10.1057/bm.1998.33

De Mortanges, C. P., & Van Riel, A. (2003). Brand equity and shareholder value. European Management Journal, 21(4), 521-527. http://dx.doi.org/doi:10.1016/S0263-2373(03)00076-8

Doyle, P. (2001). Shareholder-value-based brand strategies. Journal of Brand Management, 9(1), 20-30. https://doi.org/10.1057/palgrave.bm.2540049

Drucker, P. (1994). The theory of business. Harvard Business Review, 72(5), 95-104.

Dutordoir, M., Verbeeten, F. H. M., & De Bejier, D. (2015). Stock price reactions to brand value announcements: Magnitude and moderators. International Journal of Research in Marketing, 32(1), 34-47. https://doi.org/10.1016/j.ijresmar.2014.08.001

Eng, L. L., & Keh, T. H. (2007). The Effects of Advertising and Brand Value on Future Operating and Market Performance. Journal of Advertising, 36(4), 91-100. https://doi.org/10.2753/JOA0091-3367360407

Feldwick, P. (1996). Do we really need 'Brand Equity?. The Journal of Brand Management, 4(1), 9-28. https://doi.org/10.1057//bm.1996.23

Hsu, F. J., Wang, T. Y. & Chang, M. Y. (2013). The Impact of Brand Value on Financial Performance. Advances in Management & Applied Economics, 3(6), 129-141.

Interbrand (2012). Best brands, Retrieved from: https://www.interbrand.com/best-brands/best-global-brands/2012/ranking/, Accessed on: March 20, 2019.

Interbrand (2013). Best brands, Retrieved from: https://www.interbrand.com/best-brands/best-global-brands/2013/ranking, Accessed on: March 20, 2019.

Interbrand (2014). Best brands, Retrieved from: https://www.interbrand.com/best-brands/best-global-brands/2014/ranking, Accessed on: March 20, 2019.

Interbrand (2015). Best brands, Retrieved from: https://www.interbrand.com/best-brands/best-global-brands/2015/ranking, Accessed on: March 20, 2019.

Interbrand (2016). Best brands, Retrieved from: https://www.interbrand.com/best-brands/best-global-brands/2016/ranking, Accessed on: March 20, 2019.

Interbrand (2017). Best brands, Retrieved from: https://www.interbrand.com/best-brands/best-global-brands/2017/ranking, Accessed on: March 20, 2019.

Interbrand (2018). Best brands, Retrieved from: https://www.interbrand.com/best-brands/best-global-brands/2018/ranking, Accessed on: March 20, 2019.

Interbrand (2019). Best brands, Retrieved from: https://www.interbrand.com/best-brands/best-global-brands/2019/ranking, Accessed on: February 10, 2020.

Kapferer, J. N. (2012). The New Strategic Brand Management: Advanced Insights and Strategic Thinking. 5th edition, London: Kogan-Page.

Kerin, R. A., & Sethuraman, R. (1998). Exploring the brand value — Shareholder value nexus for consumer goods companies. Journal of the Academy of Marketing Science, 26(4), 260-273. https://doi.org/10.1177/0092070398264001

Kim, H. B., Kim, W. G., & An, J. A. (2003). The Effect of Consumer-Based Brand Equity on Firm’s Financial Performance. Journal of Consumer Marketing, 20(4), 335-351. http://dx.doi.org/10.1108/07363760310483694

Kirk, C. P., Ray, I., & Wilson, B. (2013). The impact of brand value on firm valuation: The moderating influence of firm type. Journal of Brand Management, 20(6), 488-500. https://doi.org/10.1057/bm.2012.55

Krstić, B., & Bonić, Lj. (2016). EIC: A new tool for intellectual capital performance measurement. Prague economic papers, 25(6), 723-741. https://doi.org/10.18267/j.pep. 586

Krstić, B. & Popović, A. (2011). Analiza Interbrand, Brandz i Brand Asset Valuator metodologija za vrednovanje marke [Analysis of the Interbrand, Brandz and Brand Asset Valuator methodologies for brand valuation]. Marketing, 42(4), 237-256.

Krstić, B., Đukić, S., & Popović, A. (2014). Vrednovanje marke kao ključne intelektualne imovine iz perspektive potrošača [Valuation of the brand as a key intellectual asset from a consumer perspective]. Marketing, 45(1), 14-28.

Lev, B. (1997). The old rules no longer apply: intellectual capital measurement. Forbes Magazine, 72(13), 34-38.

Lev, B. (2001). Intangibles: Management, Measurement, and Reporting. Washington, D.C.: Brookings Institution Press.

Lindenberg, E. B., & Ross, S. A. (1981). Tobin's q ratio and industrial organization. Journal of Business, 54(1), 1-32. https://doi.org/10.1086/296120

Madden, T. J., Fehle, F., & Fournier, S. (2006). Brands matter: An empirical demonstration of the creation of shareholder value through branding. Journal of the Academy of Marketing Science, 34(2), 224-235. https://doi.org/10.1177/0092070305283356

Matsumura, H., Ueda, T., & Sagane, Y. (2019). Data on the correlations among brand value, market capitalization, and consolidated overseas sales ratios of Japanese companies. Data in Brief, 23, 1-6. https://doi.org/10.1016/j.dib.2019.103808

Mizik, N. (2014). Assessing the Total Financial Performance Impact of Brand Equity with Limited Time- Series Data. Journal of Marketing Research, 51(6), 691–706. https://doi.org/10.1509/jmr.13.0431

Mohan, B. C., & Sequeira, A. H. (2013). Exploring the Interlinkages between Brand Equity and Business Performance – Towards a Conceptual Framework. Indian Journal of Marketing, 43(2), 5-10. https://doi.org/10.2139/ssrn.2133940

Perfect, S. B., & Wiles, K. W. (1994). Alternative constructions of Tobin's q: An empirical comparison. Journal of Empirical Finance, 1(3) 313-341. https://doi.org/10.1016/0927-5398(94)90007-8

Popović, A., Krstić, B., & Milovanović, G. (2015). Merenje finansijske vrednosti marke kao nematerijalne imovine preduzeća [Measuring the financial value of a brand as an intangible asset of a company]. Marketing, 46(1), 13-25.

Raggio, R. D., & Leone, R. P. (2007). The Theoretical Separation Of Brand Equity And Brand Value: Managerial Implications For Strategic Planning. Journal of Brand Management, 14(5), 380-395. https://doi.org/10.1057/palgrave.bm.2550078

Rasti, P., & Gharibvand, S. (2013). The Influence of Brand Value on Selected Malasyian's Companies Book Value and Shareholders. Review of Contemporary Business Research, 2(1), 12-19.

Seetharaman, A., Bin Mohd Nadzir, Z. A., & Gunalan, S. (2001). A conceptual study on brand valuation. Journal of Product & Brand Management, 10(4), 243-256. https://doi.org/10.1108/EUM0000000005674

Shankar, V. Azar, P., & Fuller, M. (2008). BRAN*EQT: A Multicategory Brand Equity Model and its Application at Allstate. Marketing Science, 27(4), 567-584. https://doi.org/10.1287/mksc.l070.0320

Slavin, N., & Yun, J. K. (2001). Earnings per Share: A Review of the New Accounting Standard. Journal of Corporate Accounting & Finance, 12(5), 57-71. https://doi.org/10.1002/jcaf.1009

Sontakke, K. A. (2016). A Study of S&P BSE Small Cap with Reference to Market Capitalisation and Trading Values. SIES Journal of Management, 12(1), 23-36.

Tobin, J. (1969). A General Equilibrium Approach to Monetary Theory. Journal of Money, Credit, and Banking, 1(1), 15-29. https://doi.org/10.2307/1991374

Tobin, J. (1978). Monetary Policies and the Economy: The Transmission Mechanism?. Southern Economic Journal, 44(3), 421-431. https://doi.org/10.2307/1057201

Topuz, Y. V., & Akşit, N. (2016). The effect of the brand value on firm value: an empirical implementation on global brands. British Journal of Marketing Studies, 4(1), 21-31.

Varaiya, N., Kerin, R. A., & Weeks, D. (1987). The Relationship Between Growth, Profitability, and Firm Value?. Strategic Management Journal, 8(5), 487-497. https://doi.org/10.1002/smj.4250080507

Veljković, S., & Kaličanin, Đ. (2016). Improving business performance through brand management practice. Economic annals, 61(208), 137-167. https://doi.org/10.2298/EKA1608137V

Verbeeten, F. H. M., & Vijn, P. (2010). Are brand-equity measures associated with business-unit financial performance? Empirical evidence from the Netherlands. Journal of Accounting, Auditing and Finance, 25(4), 645-671. http://dx.doi.org/10.1177/0148558X1002500408

Yang, T. Y., Yang, Y. T., Chen, J. R., & Lu, C. C. (2018). Correlation between owner brand and firm value – Case study on a private brand in Taiwan. Asia Pacific Management Review, 24(3), 232-237. https://doi.org/10.1016/j.apmrv.2018.06.002

Yeung, M., & Ramasamy, B. (2008). Brand value and firm performance nexus: Further empirical evidence. Journal of Brand Management, 15(5), 322-335. https://doi.org/10.1057/palgrave.bm.2550092

Yoo, B., & Donthu, N. (2001). Developing and Validating a Multidimensional Consumerbased Brand Equity Scale. Journal of Business Research, 52(1), 1–14. http://dx.doi.org/10.1016/S0148-2963(99)00098-3

Yoo, B., Donthu, N., & Lee, S. (2000). An examination of selected marketing mix elements and brand equity. Journal of Academy of Marketing Science, 28(2), 195-211. http://dx.doi.org/10.1177/0092070300282002

Yu, K. Y., Ng, H. T., Wong, W. K., Chu, S. K. W., & Chan, K. H. (2011). An Empirical Study of the Impact of Intellectual Capital Performance on Business Performance. Journal of Information & Knowledge Management, 10(01), 11-21. https://doi.org/10.1142/S0219649211002791




DOI: https://doi.org/10.22190/FUEO200612023J

Refbacks

  • There are currently no refbacks.


ISSN 0354-4699 (Print)

ISSN 2406-050X (Online)