TESTING BRAND VALUE MEASUREMENT METHODS IN A RANDOM COEFFICIENT MODELING FRAMEWORK

Abstract

Our objective is to provide a framework for measuring brand equity, that is, the added value to the product endowed by the brand. Based on a demand and supply model, we propose a structural model that enables testing the structural effect of brand equity (demand side effect) on brand value (supply side effect), using Monte Carlo simulation. Our main research question is which of the three brand value measurement methods (price premium, revenue premium and profit premium) is more suitable from the perspective of the structural link between brand equity and brand value. Our model is based on recent developments in random coefficients model applications.

Keywords

• random coefficients logit, brand equity, brand value