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Brands Matter: An Empirical Demonstration of the Creation of Shareholder Value Through Branding

University of South Carolina

Frank Fehle

Barclays Global Investors, frank.fehle{at}barclaysglobal.com

Susan Fournier

Boston University

This research responds to the attendant need for empirical evidence pertaining to how marketing affects firm performance. Using the Fama-French method, common in finance, and a leading marketplace measure of a brand’s financial equity value, the authors provide empirical evidence for the branding-shareholder value creation link. The results extend previous research by showing that strong brands not only deliver greater returns to stockholders than does a relevant benchmark but do so with less risk. This finding holds even when market share and firm size are considered.

Key Words: shareholder value • brand equity • brand value • portfolio analysis • brand strategy

Journal of the Academy of Marketing Science, Vol. 34, No. 2, 224-235 (2006)
DOI: 10.1177/0092070305283356


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