Does customer satisfaction lead to improved brand equity? An empirical examination of two categories of retail brands

Purpose – The objective of the present research is to examine the relationship between consumers' satisfaction with a retailer and the equity they associate with the retail brand. Design/methodology/approach – Retail brand equity is conceptualized as a four-dimensional construct comprising: retailer awareness, retailer associations, retailer perceived quality, and retailer loyalty. Then the associative network memory model is applied from cognitive psychology to the specific context of the relationships between customer satisfaction and consumer-based retailer equity. A survey was undertaken using a convenience sample of shopping mall consumers in an Australian state capital city. The questionnaire used to collect data included an experimental design such that two categories of retailers were included in the study: department stores and specialty stores, with three retailers representing each category. The relationship between consumer-based retailer equity and customer satisfaction was examined using multivariate analysis of variance. Findings – Results indicate that retail brand equity varies with customer satisfaction. For department stores, each consumer-based retailer equity dimension varied according to customer satisfaction with the retailer. However, for specialty stores, only three of the consumer-based retailer equity dimensions, namely retailer awareness, retailer associations and retailer perceived quality, varied according to customer satisfaction level with the retailer. Originality/value – The principal contribution of the present research is that it demonstrates empirically a positive relationship between customer satisfaction and an intangible asset such as retailer equity.

ANÁLISE DA ASSOCIAÇÃO DE OPERAÇÕES DE CAPITALIZAÇÃO DE PRIVATE EQUITY E VENTURE CAPITAL NO DESEMPENHO DE EMPRESAS COM AÇÕES NA BOVESPA

A vantagem competitiva e o desempenho organizacional são conceitos administrativos estreitamente ligados à competitividade das empresas e sua permanência no mercado a longo prazo. Para que alcancem tal objetivo, de acordo com os fundamentos da RBV, as capacidades organizacionais dessas empresas devem ser dinâmicas, o que significa estar à frente das mudanças ambientais, mantendo, criando e desenvolvendo novas capacidades. Um dos caminhos para que isso se realize é a aposta na sua capitalização, que pode ocorrer com a captação de recursos de terceiros ou recursos próprios, com maior ou menor grau de risco. A captação de recursos com capital de terceiros acontece, principalmente, via instituições financeiras e factorings. A captação por meio de capital próprio pode ocorrer por retenção de lucros ou pelo underwriting. A emissão feita via mercado primário configura a oferta pública inicial de ações ou Initial Public Offering (IPO). No Brasil, a escolha dos fundos de Private Equity e Venture Capital, segmentos do mercado financeiro que consistem fundamentalmente em aporte temporário de capital, vem crescendo consideravelmente nos últimos anos. Contudo, existem poucas pesquisas a respeito da utilização e do desempenho financeiro que esses fundos trazem para as empresas. O presente estudo procura averiguar se as empresas que estavam listadas na BOVESPA no período de 2002 a 2008 e que receberam recursos via Private Equity e Venture Capital com IPO desenvolveram desempenho financeiro superior às que receberam ou não outros tipos de financiamento no mesmo período. Foram selecionados dados secundários como: balanços patrimoniais, demonstração de resultados e valores das ações, utilizando-se da base de dados da Economática. Tomando o logaritmo do Q de Tobin como variável dependente e log_Ativo, Debt to Equity, ROA, crescimento de vendas, crescimento de investimentos, crescimento investimento Fama e CrescInv_endividamento como variáveis de controle, foram aplicados testes estatísticos, comparando a média dos índices, seguidos de análise por setor econômico, subsetor e segmento. Os resultados encontrados apontam que as empresas que receberam recursos via Private Equity e Venture Capital com IPO, tornaram-se diferentes das demais empresas que estavam listadas na BOVESPA naquele período. O presente trabalho busca, dessa forma, contribuir para o enriquecimento de conhecimento acadêmico acerca do tema.(AU)

Brand equity and purchase intention in fashion industry:a cross-cultural study in Asia and Europe

This research is the leading brand for purchase of assets, and analyzing the factors based on brand asset components and the relationship between the brand and brand assets assets impact factors and purchase intent on uncovering the relationship between components and trademarks centered on South Korea and the United Kingdom, by comparing the asset management plan would generate. The study, information navigation product knowledge affects of constant (+), brand attitudes and knowledge of the brand loyalty and brand value to the constant trademark (+). Brand value and brand loyalty and purchase intent-(+) in the United Kingdom, on the other hand, of the impact that do not affect that.

Customer equity drivers and future sales

Research on linking operational marketing inputs to customer attitudes and customer behavior has been gaining significance concomitant with the growing recognition that customers are market-based assets. In response to this, researchers and practitioners have proposed several conceptual models. Despite recent advances in research, the results are still inconclusive as to the relationship between customer attitude and future sales. A reason for this could be due to the paucity of studies combining survey-based data with behavioral data to understand better the drivers of customer behavior. With that in mind, the authors investigate the effects of customer perceptions of key marketing actions on customer attitudes and actual customer behavior as reflected by future sales. The authors propose that customer perceptions of value, brand, and relationship—“customer equity drivers”—affect loyalty intentions and future sales. The results of the study, which is based on a sample of 5694 customers of a large European do-it-yourself retailer, suggest that customer equity drivers can significantly predict future sales, even after the authors control for the current sales level.

Private equity and the flight of the phoenix four - the collapse of MG Rover in the UK

This paper explores the nature of the co-called ‘private equity business model’ (PEBM) and assesses its shortcomings, using the illustrative example of the role of private equity in structuring the finance and subsequent collapse of MG Rover, as the automotive industry has been a significant destination for private equity financing. The paper outlines the nature of the PEBM. It then details how the PEBM extracts value, before stressing how this can affect workers in a portfolio business. We argue that the emergence of the PEBM changes the basis of competitive rules in organizations and the running of erstwhile going concerns, necessitating a need for further regulation—particularly, how to secure wider stakeholder oversight without reducing the efficiency of PEBM concerns.

A taxonomy of measures for consumer-based brand equity:drawing on the views of managers in Europe

Purpose: The purpose of this paper is to identify the components of consumer-based brand equity from the perspective of experts in brand management in the UK, Germany and Greece. Design/methodology/approach: Data were collected from semi-structured interviews with senior brand consultants and managers, five in the UK, five in Germany and five in Greece. Findings: The findings suggested four categories of measures which can be used to define brand equity. These are the consumers' understanding of brand characteristics; consumers' brand evaluation; consumers' affective response towards the brand; and consumers' behaviour towards the brand. Specific dimensions are identified as indicators of each category. Research limitations/implications: Although the focus of this study is Europe, data were only collected from the UK, Germany and Greece, countries representing three of the five European cultural clusters. The resultant taxonomy adds to the fragmented literature on brand equity measurement by proposing four categories to gauge brand equity. Practical implications: The suggested taxonomy provides indicators of a framework managers could use when assessing brand equity. Originality/value: There is little agreement on what constitutes brand equity and therefore measures of brand equity are fragmented. To date, the views of practicing managers have not been taken into account in research. This paper draws on the views of practitioners and academics to suggest a taxonomy of categories of measures for brand equity. © Emerald Group Publishing Limited.

The influence of brand equity on consumer responses

Purpose: The purpose of this paper is to propose and test a model to better understand brand equity. It seeks to investigate the effects of this construct on consumers' responses using data from two European countries. Design/methodology/approach: Hypotheses were tested using structural equation modeling (SEM). Measurement invariance and stability of the model across the two national samples was assessed using multigroup confirmatory factor analysis. Findings: Results indicate that brand equity dimensions inter-relate. Brand awareness positively impacts perceived quality and brand associations. Brand loyalty is mainly influenced by brand associations. Finally, perceived quality, brand associations and brand loyalty are the main drivers of overall brand equity. Findings also corroborate the positive impact of brand equity on consumers' responses. In addition, the general framework proposed is found to be empirically robust across the studied countries. Only a few differences are observed. Research limitations/implications: A limited set of product categories, brands and countries were used. Practical implications: Findings provide useful guidelines for brand equity management. Managers can complement financial metrics with consumer-based brand equity measures to track brand performance over time and to benchmark against other brands. Building brand equity generates more value for corporations since a more favourable consumer response results from positive brand equity. Originality/value: This study contributes to the scarce international brand equity literature by testing the proposed model using data from a sample of consumers in two European countries. It also enriches the brand equity literature by empirically examining the relationships among consumer-based brand equity dimensions and its effects on consumers' responses. © Emerald Group Publishing Limited.

The ‘situated functionality’ of accounting in private equity practices:a social ‘site’ analysis

This paper contributes to the recent ‘practice turn’ in management accounting literature in two ways: (1) by investigating the meshing and consequently the ‘situated functionality’ of accounting in various private equity (PE) practices, and (2) by experimenting with the application of Schatzki’s ‘site’ ontology. By identifying and describing the role and nature of accounting and associated calculative practices in different parts of the PE value chain, we note that the ‘situated functionality’ of accounting is ‘prefigured’ by its ‘dispersed’ nature. A particular contribution of experimenting with Schatzki’s ‘site’ ontology has been to identify theoretical concerns in relation to the meaning and role of the concept ‘general understandings’ and to clarify the definitional issues surrounding this concept. We also identify the close relationship between ‘general understandings’ and ‘teleoaffective structure’ and note their mutually constitutive nature.

Assessing the value relevance of accounting data after the introduction of IFRS in Europe

Since 2005, European-listed companies have been required to prepare their consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS). We examine whether value relevance increased following the introduction of IFRS, using a sample of 3,721 companies listed on five European stock exchanges: Frankfurt, Madrid, Paris, London, and Milan. We find mixed evidence of an increase in value relevance. However, the influence of earnings on share price increased following the introduction of IFRS in Germany, France, and the United Kingdom, while the influence of book value of equity decreased (except for the United Kingdom). © 2010 Blackwell Publishing Ltd.

A marketingeszközök és –tevékenységek részvényesi értékre gyakorolt hatása (The effect of marketing assets and activities on shareholder value)

A vállalati marketing pénzügyi teljesítményre, különösen részvényesi értékre gyakorolt hatásának kimutatása mind fontosabbá válik a marketingráfordítások nagyságának növekedésével, valamint annak felismerésével, hogy a részvényesek számára vevői érték nélkül nem lehet hosszú távon értéket biztosítani, azonban kedvező piaci eredményekkel sem feltétlenül valósul meg a pénzügyi teljesítmény növekedése. A szerzők tanulmányukban a marketingeszközök és -tevékenységek részvényesi értékre gyakorolt hatását vizsgálják, rámutatnak arra, hogy milyen módon befolyásolhatják a részvényeseket megillető szabad pénzáramot, a tulajdonosi megtérülést, a stratégiai tervezési időhorizontot és a végértéket. A marketing néhány lehetséges negatív hatását is kiemelik. Ezt követően felvázolják a marketingjellegű beruházások reálopciós karakterisztikáit, valamint játékelméleti összefüggéseit dinamikusan változó környezetben. ________ Proving the effect of corporate marketing on financial performance, especially on shareholder value, becomes more and more important as marketing expenditures increase. Furthermore by the recognition that for shareholders without customer value it is not possible to provide value in the long run, however, neither good market results can assure the growth of financial performance. In this paper the authors examine the effect of marketing assets and activities on shareholder value, they point out how these can influence free cash flow to equity, shareholder return, strategic planning time period and terminal value. They emphasize also some possible negative effects of marketing. The authors outline the real optional characteristics of marketing investments and their game theoretical relations in dynamic environment.

The effect of the business cycle on the performance of socially responsible equity mutual funds

The current study applies a two-state switching regression model to examine the behavior of a hypothetical portfolio of ten socially responsible (SRI) equity mutual funds during the expansion and contraction phases of US business cycles between April 1991 and June 2009, based on the Carhart four-factor model, using monthly data. The model identified a business cycle effect on the performance of SRI equity mutual funds. Fund returns were less volatile during expansion/peaks than during contraction/troughs, as indicated by the standard deviation of returns. During contraction/troughs, fund excess returns were explained by the differential in returns between small and large companies, the difference between the returns on stocks trading at high and low Book-to-Market Value, the market excess return over the risk-free rate, and fund objective. During contraction/troughs, smaller companies offered higher returns than larger companies (ci = 0.26, p = 0.01), undervalued stocks out-performed high growth stocks (h i = 0.39, p <0.0001), and funds with growth objectives out-performed funds with other objectives (oi = 0.01, p = 0.02). The hypothetical SRI portfolio was less risky than the market (bi = 0.74, p <0.0001). During expansion/peaks, fund excess returns were explained by the market excess return over the risk-free rate, and fund objective. Funds with other objectives, such as balanced funds and income funds out-performed funds with growth objectives (oi = −0.01, p = 0.03). The hypothetical SRI portfolio exhibited similar risk as the market (bi = 0.93, p <0.0001). The SRI investor adds a third criterion to the risk and return trade-off of traditional portfolio theory. This constraint is social performance. The research suggests that managers of SRI equity mutual funds may diminish value by using social and ethical criteria to select stocks, but add value by superior stock selection. The result is that the performance of SRI mutual funds is very similar to that of the market. There was no difference in the value added among secular SRI, religious SRI, and vice screens.

The market value implications of pension asset allocation

Pension funds have been part of the private sector since the 1850's. Defined Benefit pension plans [DB], where a company promises to make regular contributions to investment accounts held for participating employees in order to pay a promised lifelong annuity, are significant capital markets participants, amounting to 2.3 trillion dollars in 2010 (Federal Reserve Board, 2013). In 2006, Statement of Financial Accounting Standards No.158 (SFAS 158), Employers' Accounting for Defined Benefit Pension and Other Postemployment Plans, shifted information concerning funding status and pension asset/liability composition from disclosure in the footnotes to recognition in the financial statements. I add to the literature by being the first to examine the effect of recent pension reform during the financial crisis of 2008-09. This dissertation is comprised of three related essays. In my first essay, I investigate whether investors assign different pricing multiples to the various classes of pension assets when valuing firms. The pricing multiples on all classes of assets are significantly different from each other, but only investments in bonds and equities were value-relevant during the recent financial crisis. Consistent with investors viewing pension liabilities as liabilities of the firm, the pricing multiples on pension liabilities are significantly larger than those on non-pension liabilities. The only pension costs significantly associated with firm value are actual rate of return and interest expense. In my second essay, I investigate the role of accruals in predicting future cash flows, extending the Barth et al. (2001a) model of the accrual process. Using market value of equity as a proxy for cash flows, the results of this study suggest that aggregate accounting amounts mask how the components of earnings affect investors' ability to predict future cash flows. Disaggregating pension earnings components and accruals results in an increase in predictive power. During the 2008-2009 financial crisis, however, investors placed a greater (and negative) weight on the incremental information contained in the individual components of accruals. The inferences are robust to alternative specifications of accruals. Finally, in my third essay I investigate how investors view under-funded plans. On average, investors: view deficits arising from under-funded plans as belonging to the firm; reward firms with fully or over-funded pension plans; and encourage those funds with unfunded pension plans to become funded. Investors also encourage conservative pension asset allocations to mitigate firm risk, and smaller firms are perceived as being better able to handle the risk associated with underfunded plans. During the financial crisis of 2008-2009 underfunded status had a lower negative association with market value. In all three models, there are significant differences in pre- and post- SFAS 158 periods. These results are robust to various scenarios of the timing of the financial crisis and an alternative measure of funding.

There exists circularity between WACC and value? Another solution.

Although we know there exists a simple approach to solve the circularity between value and the discount rate, known as the Adjusted Present Value proposed by Myers, 1974, it seems that practitioners still rely on the traditional Weighted Average Cost of Capital, WACC approach of weighting the cost of debt, Kd and the cost of equity, Ke and discounting the Free Cash Flow, FCF. We show how to solve circularity when calculating value with the free cash flow, FCF and the WACC. As a result of the solution we arrive at a known solution when we assume the discount rate of the tax equity: the capital cash flow, CCF discounted at Ku. When assuming Kd as the discount rate for the tax savings, we find an expression for calculating value that does not implies circularity. We do this for a single period and for N periods.

Ratios and indicators that determine return on equity

This study aims to investigate factors that may affect return on equity (ROE). The ROE is a gauge of profit generating efficiency and a strong measure of how well the management of a firm creates value for its shareholders. Firms with higher ROE typically have competitive advantages over their competitors which translates into superior returns for investors. Therefore, seems imperative to study the drivers of ROE, particularly ratios and indicators that may have considerable impact. The analysis is done on a sample of 90 largest non-financial companies which are components of NASDAQ-100 index and also on industry sector samples. The ordinary least squares method is used to find the most impactful drivers of ROE. The extended DuPont model’s components are considered as the primary factors affecting ROE. In addition, other ratios and indicators such as price to earnings, price to book and current are also incorporated. Consequently, the study uses eight ratios that are believed to have impact on ROE. According to our findings, the most relevant ratios that determine ROE are tax burden, interest burden, operating margin, asset turnover and financial leverage (extended DuPont components) regardless of industry sectors.

Equity research - Brisa

Mestrado em Finanças