Brand management efficiency and firm value: An integrated resource based and signalling theory perspective

Brand managers in most markets use some types of marketing inputs such as advertising to build and manage their brands, with the objective of strengthening brand equity. Previous research has explored the link between some of these inputs and outputs, such as the link between advertising expenditure and brand equity, or between brand equity and firm performance. These studies typically provide a partial view of brand management performance in that they focus selectively on individual inputs and outputs, but not on all together. In contrast, this paper takes a holistic view, incorporating all brand management inputs and performance outputs, measured concurrently. A new concept called “brand management efficiency” is advanced to provide an integrated view of the link between brand management inputs and outputs. The study reported here investigates the impact of “brand management efficiency” on firm value in US-based B2B firms. It demonstrates that firms with a higher level of brand management efficiency have a higher firm value as measured by Tobin's q.