Thursday, August 2, 2007

Brands Matter!

As a marketing major, I constantly have to take a lot of crap from self-righteous, over-zealous finance or accounting students. The problem is that a lot of times the marketing benefits are intangible (especially to accountants). So imagine how happy I was to stumble upon this study, providing me with some live ammo to fire back. Even though it was published in 2002 (and some of you probably already know it), it is still very much relevant.

By comparing the returns of a portfolio made up of companies with a strong emphasis on branding with the returns of a benchmark portfolio made up of the rest of the U.S. market, the researchers arrived at the conclusion that strong brands consistently outperformed the market. While this has been suspected for a long time, even before this study, the use of financial tools such as Present Value calculations makes it all the more valuable for my purposes.

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