The financial brand value chain: How brand investments contribute to the financial health of firms

Fischer, M; Himme, A

The financial brand value chain: How brand investments contribute to the financial health of firms

Fischer, M

Himme, A

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Publication Type:: Journal Article
Citation:: International Journal of Research in Marketing, 2017, 34 (1), pp. 137 - 153
Issue Date:: 2017-03-01

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Field	Value	Language
dc.contributor.author	Fischer, M https://orcid.org/0000-0002-9012-2292	en_US
dc.contributor.author	Himme, A	en_US
dc.date.issued	2017-03-01	en_US
dc.identifier.citation	International Journal of Research in Marketing, 2017, 34 (1), pp. 137 - 153	en_US
dc.identifier.issn	0167-8116	en_US
dc.identifier.uri	http://hdl.handle.net/10453/124431
dc.description.abstract	© 2016 Elsevier B.V. Marketing and finance executives follow different objectives and focus on different stakeholder groups. Marketers want to create sales impact. Finance executives are concerned about the financial health of the firm. As a result, both worlds tend to be rather disconnected in their daily business. We argue that this does not reflect the dynamics of the firm where important marketing and financial metrics in fact interact. As long as marketing and finance officers do not fully appreciate the interplay of their key metrics, their decisions are likely to be suboptimal. This article proposes a simultaneous equation model that reflects the interaction of marketing and finance-domain variables in the value creation process. We focus on brand-building activities and the attraction of capital as major tasks of marketing and finance officers. Our model shows how advertising and other investments increase customer-based brand equity (CBBE) that in turn impacts financial leverage and credit spread and ultimately elevates the level of financial resources. Based on a broad sample of 155 firms covering various B2C industries, we test for the empirical relevance of our model. We also assess the practical significance of our results by transforming them into elasticities. Our results suggest that marketing and finance executives need to consider the dynamic interaction of their decision and performance variables to fully evaluate the effects of their decisions on the firm's financial health.	en_US
dc.relation.ispartof	International Journal of Research in Marketing	en_US
dc.relation.isbasedon	10.1016/j.ijresmar.2016.05.004	en_US
dc.subject.classification	Marketing	en_US
dc.title	The financial brand value chain: How brand investments contribute to the financial health of firms	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	34	en_US
utslib.for	1505 Marketing	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Marketing Discipline
utslib.copyright.status	closed_access
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	34	en_US

Abstract:

© 2016 Elsevier B.V. Marketing and finance executives follow different objectives and focus on different stakeholder groups. Marketers want to create sales impact. Finance executives are concerned about the financial health of the firm. As a result, both worlds tend to be rather disconnected in their daily business. We argue that this does not reflect the dynamics of the firm where important marketing and financial metrics in fact interact. As long as marketing and finance officers do not fully appreciate the interplay of their key metrics, their decisions are likely to be suboptimal. This article proposes a simultaneous equation model that reflects the interaction of marketing and finance-domain variables in the value creation process. We focus on brand-building activities and the attraction of capital as major tasks of marketing and finance officers. Our model shows how advertising and other investments increase customer-based brand equity (CBBE) that in turn impacts financial leverage and credit spread and ultimately elevates the level of financial resources. Based on a broad sample of 155 firms covering various B2C industries, we test for the empirical relevance of our model. We also assess the practical significance of our results by transforming them into elasticities. Our results suggest that marketing and finance executives need to consider the dynamic interaction of their decision and performance variables to fully evaluate the effects of their decisions on the firm's financial health.

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http://hdl.handle.net/10453/124431