Abstract

Brand building is a cornerstone of marketing strategy. As an important tool to measure and communicate brand building success, financial brand value quantifies a brand’s monetary worth. However, despite its importance, empirical insights into the drivers of financial brand value remain sparse due to challenges in measurement and valuation inconsistencies. Addressing these gaps, the authors leverage an extensive dataset of over 26,500 brand valuations spanning three decades, 4,655 brands, and 18 valuation methods. They decompose the sources of brand value variation, revealing that firm management explains the majority of brand value variance, while valuation methods, industry, and time trends contribute to a lower degree. Guided by the resource-based view of the firm, the authors then identify the key firm-specific drivers of brand value creation, including critical resources (advertising, sales force & other marketing expenditures, and innovation), firm strategy choices (competitive differentiation, product market scope, and vertical integration), as well as strategic enablers (emphasis on growth vs. profit and CMO presence), for optimizing brand value creation. These insights provide actionable guidance for managers and enrich our academic understanding of brand value creation.

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