Subject: Customer equity drivers | Loyalty intentions | Cultural differences | Markentreue | Brand loyalty | Kundenwert | Customer value | Kundenbindung. Therefore, this study investigates whether the link between customer equity drivers (value equity, brand equity and relationship equity) and loyalty intentions is. Further, Relationship equity has the strongest impact on the development of customer equity in this particular industry. Relationships among value equity, brand.
The value of the brand is then aggregated over products and markets countries to determine a value for brand. Brand Value Approach 2: Evidence comes from a series of studies I conducted with Professor Robert Jacobson of the University of Washington, using time series data which included information on accounting-based return-on-investment ROI and models that sorted out the direction of causation. The consistent finding was that the impact of increasing brand equity on stock return was nearly as great as that of an ROI change, about 70 percent as much.
In contrast, advertising, also tested, had no impact on stock return except that which was captured by brand equity. Brand Value Approach 3: Reflect on Other Valuable Brands A third approach is to look at case studies of brands that have created enormous value. Or, the fact that from to two cars were made in the same plant using the same design and materials and marketing under two brand names, Toyota Corolla and Chevrolet GEO Prism.
And consumers and experts both gave it higher ratings. Only the brand was different.
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Brand Value Approach 4: What is the business strategy? What is the strategic role of the brand in supporting that strategy? In the case of India, mandatory certification to Securities and Exchange Board of India SEBI by companies listed in the stock exchanges and enforcement through companies actare some of the means to ascertain and enforcement corporate governance compliances.
Brand Equity is the added value endowed by the brand to the product [ 8 ]. Ina Financial times survey across chief executives in 20 countries on most respected companies maintained a high score on financial performance, integrity, commitment to the community and corporate governance [ 11 ].
It will help firms to evaluate if their corporate governance actions are building value and if they are getting associated with their customers. This study focuses on top 20 Brands of India and shall ascertain if there is a linkage between their Brand Equity and the corporate disclosures they make.
Customer equity - Wikipedia
The specific research objective is to determine if corporate governance disclosures impact brand equity of Indian firms. The study relies on a combination of Corporate Governance Index suggested by Black et al. Brand Equity figures published by Interbrand for Indian Brands.
Correlation and regression is used as the primary statistical tool. Goel and Ramesh [ 1415 ] on the other hand found a positive impact of corporate governance practices on valuation and profitability. Arora and Sharma [ 16 ], found the relationship between corporate governance and performance not very strong in Indian firms. They found no relationship between ROE, profitability and stock returns, with corporate governance indicators of the firms.
Ioannou and Serafeim [ 18 ] suggest that sustainability reporting not only increases transparency but can also change corporate behavior and there is a positive impact of this on responsible management practices. Well-governed firms were found to be significantly outperforming the poorly governed firms by up to 15 per cent a year. Financial disclosure, internal control, shareholder rights, and remuneration significantly impacted stock performance.
They were however cautious to point out that not all aspects of corporate governance matter to shareholders [ 19 ].
Brand Equity vs. Brand Value: What's the Difference? | Aaker on Brands
Positive correlation has been found between good governance with market valuation and operating performance [ 20 ]. Reflecting good governance through disclosure compliance was seen to be driven by active board and board committees.
They further evidenced that board and ownership structure were more reliable about predicting future accounting operating performance than future stock market performance. They however cautioned that corporate governance and performance might be endogenous.
Bhatt and Bhattacharya [ 23 ] and Erkens et al. Kumar and Singh [ 25 ] found negative association between board size and firm value and firms with high ownership concentration of promoters have high market valuations. Executive chairperson has been found to affects the firm value and optimal combination of inside and outside directors, independent directors key to driving firm performance [ 26 ].
Directors pay impacts the profit after tax across various industries and firms of varied sizes. It has also been found that firms with weaker corporate governance have lower credit ratings [ 27 ].
Dowling [ 28 ] reported from his study, that good reputation aids the company and results in better financial performance in general. Firms with strong brands, create value for their shareholders through greater returns with less risk [ 30 ]. Brand equity increases both consumer preferences and purchase intentions [ 31 ].
Corporate governance is one of the strong means to enhance reputation and hence improving performance of the brand.
- Brand Equity vs. Brand Value: What’s the Difference?
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Brand value is influenced by corporate identity which is transmitted by corporate communications, corporate design and corporate behaviour [ 32 ]. Disclosures being are a form of corporate communication is likely to hence play a role in brand equity outcomes.
Social responsibility is key to successful brands and growing brand value, as consumers want to feel responsible in what they consume [ 33 ]. Singh and Kumar [ 34 ] further submit that effective internal monitoring can improve the performance of the firms and higher disclosure standards have positive impact on performance.
With better Corporate Governance, firms can achieve greater returns on their capital invested [ 36 ]. This is further supported by Lai et al. One of the key parameters of shareholder value namely Earnings per Share EPS has also been found to be impacted by the directors pay [ 38 ].
Mandatory corporate governance disclosures have been found to bring in efficient supervision of managers by boards of directors and increased implementation of ethical practices [ 18 ], which in turn impacts the brand value of a firm.
Many companies see branding as an output of their corporate governance activities. British Petroleum BP has used corporate governance to differentiate from rivals. Diageo has relied on corporate governance to build distinct brand values [ 40 ]. Corporate governance is positively associated with Corporate Social Responsibility CSR and expected to have an impact on future social responsibility of the firm thereby enhancing reputation [ 41 ].
Effective corporate governance leads to lower costs and more equitable capital and it influences market orientation. It is key factor in decision of releasing new product information due to its influence on market orientation behaviors of the firm.
In their study, they also noted that governance mechanisms reduce expropriation or misallocation of funds, and lead to a long-term planning horizon. This finding can be extrapolated to mean that the improved perception would impact the reputation and the Brand value.
Sustainability, corporate governance and innovation are important drivers of brand strength in B2B markets. Particularly in the case of India, Brand strength perception showed strong association with sustainability and corporate governance [ 45 ].