The authors propose a new approach for measuring, analyzing, and predicting a brand's equity in a product market. Brand equity is defined as the incremental contribution ($) per year obtained by the brand in comparison to the underlying product (or service) with no brand-building efforts. The incremental contribution is driven by the individual customer's incremental choice probability for the brand in comparison to his or her choice probability for the underlying product with no brand-building efforts. The approach takes into account three sources of brand equity--brand awareness, attribute perception biases, and non-attribute preference--and reveals how much each of the three sources contributes to brand equity. This is done by taking into account not only the direct effects of these three sources on choice probabilities, but also the indirect effects through enhancing the brand's availability. The method provides what-if analysis capabilities to predict the likely impacts of alternative strategies to enhance a brand's equity. The survey-based results from applying the method to the digital cellular phone market in Korea show that the proposed approach has good face validity and convergent validity, with brand awareness playing the largest role, followed by non-attribute preference.

An Approach to the Measurement, Analysis, and Prediction of Brand Equity and Its Sources

Research background: Among academicians, a growing interest in brand valuation methods can be observed since the 1980s, when it became obvious that firms have off-balance sheet assets which have a significant effect on their value. Moreover, in a number of cases, the need to value the brand arises due to the reporting requirements or transactional and other intrafirm reasons. The existing methods used so far have commonly focused on changes in variables such as sale prices, changes in customer behaviour, or sales volumes and very often lead to different results, even when valuing the same brand. We believe that the risk factor has been neglected in these methods, although having a significant impact on the brand valuation.
Purpose of the article: The aim of this paper is to formulate an alternative brand valuation approach based on the risk difference. This is defined as the difference between the risk to which a producer with a certain brand is exposed and the risk of the producer without a brand.
Methods: Firstly, a set of assumptions was defined concerning the issue what conditions are required to be applied to use the proposed methodological approach. Next, the concept itself is formulated and tested while using the case study approach. Hence, in conditions of a model company, the method was verified with specific data. The results were also compared with the reproduction cost approach.
Findings & value added: This paper presents a novel brand valuation method based on the risk difference. Building on a thought experiment, we compare an incumbent with a brand rather than with an average producer, which is a commonly used approach, with a new entrant to the market. We argue that in comparison to existing methods, our methodological approach reduces the number of unobservable inputs in the brand valuation process, and thus increases the accuracy and reliability of its results. Our method supports both researchers and practitioners to establish a better understanding between the well-established financial theories and new directions in brand valuation research.

/pdf/brand-valuation-an-innovative-approach-based-on-the-risk-2m14re01x3.pdf

Brand valuation: an innovative approach based on the risk difference

Research on brand alliances has generally shown favorable outcomes for partnering brands among comparably strong brands. Recently, some retailers have offered promotions that pair a strong brand with a weak brand, with the goal of helping the weak brand. What is unique about these promotions is that the strength of the alliance integration is very low. The present research was designed to address the question of whether such asymmetric brand alliances—bundling a weak brand with a strong brand as part of a joint sales promotion—can benefit the weak brand through a transfer of positive associations from the strong brand. We show that not only do such partnerships fail to help the weak brand, they can actually hurt the weak brand by increasing the salience of the brand contrast in consumers’ decision-making process. We also show that alliance integration moderates the transference of the association’s effect. 

Asymmetric brand alliances: When joint promotions with strong brands hurt


Purpose
The literature on product design/development (PD) has attempted to understand the consumer but has not provided a comprehensive framework for product marketers and designers. Thus, this paper aims to compile and link the main topics in the literature on PD to create a foundation for strategic development in this field.


Design/methodology/approach
This research adopted a “fit-for-purpose” methodology, a cross-referencing method and a meta-narrative approach that are appropriate for reviewing studies in a field involving complex topics and areas in which the literature is still developing.


Findings
To enhance the quality of product development, there is a need for PD strategy based on a clear understanding of many factors: the consumer; the complex interrelations among a product’s values, dimensions and personalities; PD theories; and other related variables.


Practical implications
This study found that PD studies should concentrate more on codifying strategies to enhance product development success. This is particularly important in view of consumers’ varied and changeable tastes in the global market and the differing insights of product marketers and designers.


Originality/value
This comprehensive systematic review is a unique study that contributes to future business-to-consumer and business-to-business research by compiling scattered and hidden strategies, theories and variables in the PD/development literature.


The missing link in the evolution of product design: a strategy roadmap towards product development success

This study focuses on the decreasing relevance of financial information associated with current financial reporting standards for intangible assets. We summarize and compare three approaches to improving financial reporting standards for internally generated intangibles—the recognition approach, the fair value approach and the disclosure approach, among which we focus on the recognition approach. We investigate the impact of current International Accounting Standard 38 on the R&D capitalization policies of the high-tech industry, particularly among medical device firms in China. We conclude that the current recognition criteria are so stringent that they disincentivize firms from capitalizing their R&D investments. A large variation exists in capitalization timing within the medical device industry. Accordingly, we propose the milestone approach to revising financial reporting standards for intangible assets. We suggest that determining the capitalization criteria for intangibles based on the R&D cycle and capitalization timing should be moved forward. 

How to improve IFRS for intangible assets? A milestone approach

The experimental evaluation of brand strength and brand value

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The experimental evaluation of brand strength and brand value