Apr 06 2011
Marketing & Finance
Being a finance student, I thought I’d try to find a link between my discipline and marketing. I believe I found one.
In finance, the share value of a company often resides in the market perception and expectation of future earnings. It does not matter, to some extend, what its intrinsic measure is. What the market perception says is what counts. Well, this concept is quite similar to the marketing concept of positioning and consumer perception. It primarily has to do with how the market perceives your products and company as opposed to anything else. This perceived value will eventually translate and add to the company’s brand equity. And I’m a big fan of brand equity! For me, it’s really synonymous of “the true market value of a company” – marketing-ly speaking.
This sentence from Dave Dolak’s blog http://davedolak.blogspot.com/2007/05/what-is-brand-equity.html summarizes the concept well: “A brand is nearly worthless unless it enjoys some equity in the marketplace. Without brand equity, you simply have a commodity product.”
Below is a good description of brand equity from Dave’s Blog. Pay attention to the wording, as much of it is interchangeable between both the discipline of marketing and finance.
“Brand Equity is the sum total of all the different values people attach to the brand, or the holistic value of the brand to its owner as a corporate asset. Brand equity can include: the monetary value or the amount of additional income expected from a branded product over and above what might be expected from an identical, but unbranded product; the intangible value associated with the product that can not be accounted for by price or features; and the perceived quality attributed to the product independent of its physical features.”