Linking Advertising and Brand Value Harvard Case Solution & Analysis

Brand equity is one of the most important assets of the company. Unfortunately, those intangible assets, received little attention from the finance and accounting community. This view can now be changed. The focus of research on the evaluation of influence of advertising on brand, not only for external reporting, but also for the internal management and control. Pros and cons of various brand valuation models considered. Make measurement of assets should consider the success of the company in the creation of product, providing marketing assistance, customer retention, creation of brand value, and reduced return volatility. The authors use a calculation called "advertising revolution" to describe the relationship between advertising expenditure and brand value. This shows how well the company converts the advertising dollars in the value of the brand, and is similar to methods used in the financial analysis to determine the productivity of capital assets or receivables. The construction of this calculation over time can distinguish high-grade amplifiers, low efficiency amplifiers brand unknown future brand and brand deterioration. Brand ROI can be split into a "brand turnover" and "return on sales." Brand Kellogg performance is used as an example of the model to assess the ability of advertising and market share to increase brand value. "Hide
by Irene M. Herremans, John K. Ryans Jr., Raj Aggarwal Source: Business Horizons 8 pages. Publication Date: May 15, 2000. Prod. #: BH047-PDF-ENG

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