, Volume 34, Issue 2, pp 224-235

Brands matter: An empirical demonstration of the creation of shareholder value through branding

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This research responds to the attendant need for empirical evidence pertaining to how marketing affects firm performance. Using the Fama-French method, common in finance, and a leading marketplace measure of a brand’s financial equity value, the authors provide empirical evidence for the branding-shareholder value creation link. The results extend previous research by showing that strong brands not only deliver greater returns to stockholders than does a relevant benchmark but do so with less risk This finding holds even when market share and firm size are considered.

Barclays Global Investors
Thomas J. Madden is a professor of marketing and director of the Professional MBA/Executive International MBA programs at the Moore School of Business, University of South Carolina. His research focuses on the measurement of brand meaning, marketing metrics, and value-based marketing strategies. His research has appeared in theJournal of Marketing Research, theJournal of Marketing, and theJournal of Consumer Behavior.
Frank Fehle (frank.fehle@barclaysglobal.com) is the head of Europe Equity Research at Barclays Global Investors in London, United Kingdom. Previously, he was an assistant professor of finance at the University of South Carolina. His research focuses on empirical asset pricing, market microstructure, risk management, and derivatives. His work has appeared in theJournal of Financial Economics, theJournal of Futures Markets, theJournal of Economics and Business, theReview of Quantitative Finance and Accounting, among other journals and conference proceedings.
Susan Fournier is an associate professor of marketing at Boston University. Her research focuses on branding and brand relationship marketing. Current projects explore person-brands, resonance as a moderator of the brand meaning → brand strength connection, the types of relationships consumers form with brands, and dynamic processes of relationship development and evolution. She served for 9 years on the Harvard Business School faculty and 2 years as a visitor at Dartmouth College. She consults with a range of companies to inform her teaching, case development, and research.