Market brand equity: lost in terminology and techniques?

Don Schultz*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

Purpose: The purpose of this paper is to review, update and suggest new approaches to estimate/determine market brand equity (MBE) impact based on additional brand investments in existing brands. The approach can be used by senior managers, replacing traditional return-on-investment (ROI) historical approaches. The paper focuses on the brand owner’s values/returns rather than those of the customer/consumer. Design/methodology/approach: A conceptual approach using a theoretical methodology based on a literature review and informed analysis of how a new type of MBE estimation/calculation methodology might be developed. Findings: This paper proposes a radically different, forward-looking calculation/estimation of MBE determination based on estimations of additional cash flows which might return to the firm as a result of additional investments made in the brand. The approach moves away from traditional cost/managerial accounting approaches to a more actuarial-based estimation of future income flows should additional investments be made in the brand. A Markov chain or other probability-based methodology of estimating future returns is suggested. Originality/value: Presently, most brand investment models are based on historical backward-looking estimations/calculations of snapshots of point-in-time ROI models. These, the author argues, are outdated and irrelevant for forward-looking managers and firms. This recommended approach provides senior management with estimates of the value that might be created in the future.

Original languageEnglish (US)
Pages (from-to)507-515
Number of pages9
JournalJournal of Product and Brand Management
Volume25
Issue number6
DOIs
StatePublished - Jan 1 2016

Keywords

  • Brand evaluation
  • Consumer brand equity
  • Financial brand equity

ASJC Scopus subject areas

  • Marketing
  • Management of Technology and Innovation

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