Handbook on Brand and Experience Management
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Handbook on Brand and Experience Management

Edited by Bernd H. Schmitt and David L. Rogers

This important Handbook explores new and emerging directions in both brand management research and practice. It encompasses a diverse set of approaches including the latest academic research offering new frameworks for understanding brand management, the researcher’s perspective on current tools in practice by brand managers, new research and conceptual frameworks for understanding and managing customer experiences and recent empirical research and scale development in both brand and experience management. The book focuses on practical, managerial, and organizational best practices.
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Chapter 5: Brand Investment and Shareholder Value

Donald Sexton


Donald Sexton An organization’s brands are likely to be their most valuable single asset – and their branding activities may be one of their most important investments. Many studies have established that brands represent substantial monetary value. For example, CoreBrand tracks the brands of more than a thousand companies. For those companies, Jim Gregory, CoreBrand’s founder and CEO, estimated that in 2006, on average, corporate brands accounted for 16.1 per cent of the market capitalization for companies producing home appliances, 14.1 per cent for motor vehicles, 11.6 per cent for aerospace, 8.3 per cent for computers and peripherals, 10.3 per cent for foods, 8.0 per cent for brokerage services, 7.0 per cent for telecommunications equipment, 5.8 per cent for pharmaceutical products, and 5.4 per cent for industrial equipment. CoreBrand corporate brand equity estimates for individual companies included $69.0 billion for General Electric, $62.9 billion for Exxon Mobil, $53.3 billion for Microsoft, and $42.1 billion for Toyota Motor. The conclusions of other studies are similar: An organization’s brands represent a significant portion of their market capitalization. This conclusion holds true for products and services and for business-to-consumer and business-to-business companies. Brand value as a percentage of market capitalization does vary by industry category and company, but it always represents a substantial amount of money. That an organization’s brands constitute a hugely valuable asset is completely consistent with standard financial concepts. Branding affects perceived value, which in turn affects overall demand. Demand affects price and sales and therefore contribution....

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