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Measuring Brand Value in an Equilibrium Framework

Measuring Brand Value in an Equilibrium Framework We propose a structural approach to measuring brand and subbrand value using observational data. Brand value is defined as the difference in equilibrium profit between the brand in question and its counterfactual unbranded equivalent on search attributes. Our model allows us to make this computation rigorously, taking into account competitors' and retailers' reactions in the real and counterfactual situations. We illustrate our method using quarterly city-level data on ready-to-eat breakfast cereals, and compare our brand value estimates with those obtained from previously used reduced-form methods. A key advantage of our methodology is that it provides estimates of the value of brands to firmsmanufacturers and retailerstaking into account the brand's value to consumers as well as its impact on firm decisions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Marketing Science INFORMS

Measuring Brand Value in an Equilibrium Framework

Marketing Science , Volume 28 (1): 18 – Jan 1, 2009
18 pages

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References (57)

Publisher
INFORMS
Copyright
Copyright © INFORMS
Subject
Research Article
ISSN
0732-2399
eISSN
1526-548X
DOI
10.1287/mksc.1080.0376
Publisher site
See Article on Publisher Site

Abstract

We propose a structural approach to measuring brand and subbrand value using observational data. Brand value is defined as the difference in equilibrium profit between the brand in question and its counterfactual unbranded equivalent on search attributes. Our model allows us to make this computation rigorously, taking into account competitors' and retailers' reactions in the real and counterfactual situations. We illustrate our method using quarterly city-level data on ready-to-eat breakfast cereals, and compare our brand value estimates with those obtained from previously used reduced-form methods. A key advantage of our methodology is that it provides estimates of the value of brands to firmsmanufacturers and retailerstaking into account the brand's value to consumers as well as its impact on firm decisions.

Journal

Marketing ScienceINFORMS

Published: Jan 1, 2009

Keywords: Keywords : branding ; brand equity measurement ; new empirical industrial organization

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