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S. Cem Bahadir, Sundar G. Bharadwaj, & Rajendra K. SrivastavaFinancial Value of Brands in Mergersand Acquisitions: Is Value in the Eyeof the Beholder?In mergers and acquisitions (M&As), brands account for significant but heterogeneous proportions of overalltransaction value. The marketing literature focuses on the drivers of financial value of brands when there is nochange in the ownership of brands. However, in M&As, the value of brands also depends on how their new ownersleverage them. This study identifies both the target and the acquirer firm characteristics that affect the value of atarget firm’s brands in M&As. The study uses audited measures of acquired brand value from Securities andExchange Commission filings (made available as a result of recent statutory reporting requirements) along withdata collected from diverse secondary sources. The empirical test of the model is based on 133 M&A transactionsin which acquirers attribute value to target firms’ brands. The results indicate that acquirer and target marketingcapabilities and brand portfolio diversity have positive effects on a target firm’s brand value. The positive impact ofacquirer brand portfolio diversity and target marketing capability is lower when the M&A is synergistic than whenit is nonsynergistic. The findings are robust to various model specifications, measures, endogeneity, and sampleselection.Keywords: brand valuation, brand equity, marketing capability, brand portfolio, mergers and acquisitionsrands are critical assets in mergers and acquisitions(M&As) (Keller 1993; Rao, Mahajan, and Varaiya1991). For example, Constellation Brands (2005)justified the acquisition of Robert Mondavi Winery asfollows:trates the variance in brand value as a percentage of firmvalue. At one end of the spectrum, 49% of the firm valuewas attributed to brands with the purchase of Gillette, and atother end, less than 1.51% was attributed to the brand valuein the acquisition of Latitude by Cisco Systems.What is the source of heterogeneity in the target firms’brand value across M&As? The extant marketing literaturesuggests that each brand has a different potential for generating future cash flows as a result of differences in brandspecific factors, such as price or revenue premiums (Srivastava, Shervani, and Fahey 1998). Complementing thisexpectation, acquirers may have different cash flow expectations of the brands that are independent of the target’sbrand-specific characteristics. For example, in 1994,Quaker Oats paid 1.7 billion for the Snapple brand, a pricehigher than Coca-Cola’s offer as well as those of other bidders (Deighton 2002). More recently, PepsiCo and CocaCola offered 13.4 billion and 15.75 billion, respectively,in the bidding war to acquire Gatorade and the rest ofQuaker Oats’ brand portfolio (McKay and Deogun 2000;Sorkin and Winter 2000). Collectively, the literature and theexamples point to two broad sources of heterogeneity inbrand value in the context of M&As: (1) the brand-specificcharacteristics of the target firm and (2) the buyers’ varyingcash flow expectations of acquired brands.The objective of this article is to understand the factorsthat determine the value attributed to the target firms’brands by the buyer in the context of M&As. We definebrand value as the present value of future cash flows thataccrue to a branded offering (product or service).1 In theBThe acquisition of Robert Mondavi supports the company’s strategy of strengthening the breadth of its portfolio across price segments to capitalize on the overallgrowth in the premium, superpremium, and fine winecategories.In several of these M&A transactions, firms paid significantprices to acquire targeted brands. In a watershed transaction, Philip Morris acquired Kraft for 12.9 billion, fourtimes its book value. Reflecting on the premium paid, PhilipMorris chief executive officer (CEO) Hamish Marshall concluded, “The future of consumer marketing belongs to thecompanies with the strongest brands” (Biggar and Selame1992, p. 36). Recently, Hewlett-Packard attributed 1.5 billion to Compaq’s brands in a transaction valued at 24 billion. Table 1 provides a set of recent transactions and illusS. Cem Bahadir is Assistant Professor of Marketing, Moore School ofBusiness, University of South Carolina (e-mail: [email protected]). Sundar G. Bharadwaj is Associate Professor of Marketing (e-mail:sundar [email protected]), and Rajendra K. Srivastava isRoberto C. Goizueta Chair in E-Commerce and Marketing (e-mail: [email protected]mory.edu), Goizueta Business School, Emory University. The authors thank the four anonymous JM reviewers; Vithala Rao; theparticipants of a research seminar at Goizueta Business School, EmoryUniversity; the participants of a special session “Financial Impact of Marketing” at Marketing Science Conference XXVIII; and the participants of aresearch seminar at Indian School of Business for their comments on previous versions. 2008, American Marketing AssociationISSN: 0022-2429 (print), 1547-7185 (electronic)1Brand value can also be defined from the perspective of consumers (e.g., Kamakura and Rusell 1993; Keller 1993). We use49Journal of MarketingVol. 72 (November 2008), 49–64

TABLE 1Illustrative Transactions and Brand Portfolio ValueAcquirerTargetCheckers Drive-In RestaurantsProcter & GambleConstellation BrandsCisco SystemsTarget Firm BrandTarget Firm ValuePortfolio Value (in(in Millions of Dollars) Millions of Dollars)Rally’s HamburgersGilletteRobert MondaviLatitude4053,4571,042861926,2511861Brand PortfolioValue/Firm Value49.72%49.61%17.85%1.16%Notes: Compiled from SEC filings.marketing literature, conceptual and empirical work focuseson antecedents to brand value in contexts in which there isno change in the ownership of brands (e.g., Barwise et al.1990; Chu and Keh 2006; Farquhar and Ijiri 1991).Although pri0or studies have incorporated important andrelevant characteristics of the target (e.g., market share),they have overlooked the M&A context and therefore havenot addressed an acquirer’s perspective of brand value.Only Mahajan, Rao, and Srivastava (1994) acknowledge theimportance of the acquirer’s perspective on a target firm’sbrand value, but they do not empirically test the role of target and acquirer characteristics that could affect the value ofa target firm’s brands in M&As. The dearth of academicresearch on the financial value of brands, as we illustrate inTable 2, is surprising because firms allocate substantialresources to acquire brands and brands continue to be ofstrategic importance to firms.data that reflect the acquirer firm’s future cash flow expectationsof the brand, so brand value from the firm perspective is moreappropriate in this context than brand value from the consumerperspective. We modify Simon and Sullivan’s (1993) definition offinancial value of brands to capture a holistic perspective. Wediscuss the valuation of brands from a holistic perspective in themeasurement section.TABLE 2Positioning the ResearchConceptualliteratureon thedeterminants offinancial brandvalueEmpiricalliteratureon thedeterminants offinancial brandvalueWithin a FirmIn an M&ABarwise et al.(1990)Mahajan, Rao,and Srivastava(1994)Farquhar and Ijiri(1991)This studyShocker andWeitz (1988)Chu and Keh(2006)Simon andSullivan (1993)Notes: The list of articles is illustrative.50 / Journal of Marketing, November 2008Against this backdrop, we contribute to the marketingliterature in the following ways: First, we identify theimpact of both target and acquirer characteristics on thefinancial value of the target firm’s brands in an M&A context. We find that acquirer and target marketing capabilitiesand their brand strategy (proxied by brand portfolio diversity) affect a target’s brand value positively.2 These findingsunderscore the significance of acquirer characteristics indetermining the financial value of brands in an M&Acontext.Second, we investigate the contingent effect of M&Astrategy (synergistic versus nonsynergistic) on the relationship between a target firm’s marketing capability and itsbrand value, as well as the relationship between the diversity of an acquirer’s brand portfolio and a target’s brandvalue. We find that the positive impact of an acquirer’sbrand portfolio diversity on a target’s brand value is lowerwhen the acquisition is synergistic. We also find that thepositive effect of a target’s marketing capability on its brandvalue is attenuated when the M&A strategy is synergistic innature. Taken together, these findings underscore the significance of redundancy in brand portfolios and marketingcapabilities on the value of acquired brands.Third, for the dependent variable, we use an accountingestimate of brand value as reported in the Securities andExchange Commission (SEC) filings of the acquirer firm inthe analysis. We use the dollar value an acquirer firmattaches to the target firm’s brands in an M&A transactionas the measure of brand value. There are several keystrengths of this measure: (1) It is based on the acquirer’scash flow expectations from the brand, so it is expressed inmonetary terms; (2) it is a forward-looking measure ofbrand value; (3) it reflects value attached only to brands, notto other assets; (4) it is based on a thorough analysis by theacquirer and valuation experts; and (5) it is subject to auditby the SEC. In the following section, we develop theoreticalarguments that link the variables of interest to the acquirer’scash flow expectations from acquired brands.Model DevelopmentThis studyWe develop the theoretical model from a discounted cashflow perspective. In essence, all the constructs in the model2We use the terms “target brand value” and “target brand portfolio value” interchangeably throughout the text.

affect one or more aspects of the acquirer’s cash flowexpectations from the target firm’s brand portfolio: level,growth, volatility, and vulnerability of cash flows (Srivastava, Shervani, and Fahey 1998). In developing our arguments linking marketing capabilities and brand portfoliostrategies—through cash flow expectations—to brandvalue, we build on two streams of research: (1) theresource-based view (RBV) and (2) brand strategy. TheRBV literature suggests that firms differ in terms of theirstrategic resources and capabilities (Barney 1991; Wernerfelt 1984). Barney (1986) argues that the heterogeneity ofresources and capabilities may explain why potentialacquirers have different cash flow expectations from thesame strategic assets. Makadok (2001) demonstrates howresource-deployment capability leads to differential cashflow expectations from the same resources among potentialacquirers.In the marketing RBV literature, brands (and brandequity) are identified as market-based assets and as sourcesof competitive advantage (Bharadwaj, Varadarajan, andFahy 1993; Srivastava, Shervani, and Fahey 1998). Brandsconform to the asset properties that lead to market imperfections (e.g., rarity, inimitability). Thus, firms differ intheir market-based assets and capabilities. Consequently, inan M&A, we expect that the acquirer’s cash flow expectations from the target firm’s brand portfolio vary as a function of the target’s and the acquirer’s marketing capabilities.The RBV points only to capabilities in explaining thecash flow expectations from a target’s strategic assets. However, the brand strategy literature suggests that there areother target and acquirer characteristics that could affect theformation of an acquirer’s expectations of a target’s brands.The branding strategy literature identifies the presence ofthree main branding strategies in practice: corporate, houseof-brands, and mixed (Laforet and Saunders 1994, 1999).On a branding strategy continuum, at one end is the corporate branding strategy in which the firm uses only one brandname across product markets (e.g., General Electric). At theother end of the continuum is the house-of-brands strategyin which the firm uses different brands to serve differentproduct markets (e.g., Procter & Gamble). The trade-offbetween two marketing strategies is economies of scale inmarketing spending versus targeting and positioning ofbrands specific to each segment (Rao, Agarwal, andDahlhoff 2004). Consequently, a firm’s brand strategyreflects its preference for economies of scale over differentiation benefits, or vice versa. Firms restructure their brandportfolios to achieve differentiation or economies-of-scalebenefits (Kumar 2004). For example, in the early 1990s,Colgate-Palmolive reduced its brand portfolio size by onequarter, which led to savings of 20 million a year (Knudsen et al. 1997). Similarly, after an M&A, acquirers restructure a target firm’s brand portfolio in various ways (e.g.,divestment of target’s brands) according to their brandstrategies (Ettenson and Knowles 2006). Thus, bothacquirer and target brand portfolio strategies are importantin determining the value of a target firm’s brands as a resultof a firm’s preference for different brand portfoliostrategies.Acquirer CharacteristicsAcquirer marketing capability. The acquirer’s marketing capability refers to its ability to combine efficiently several marketing resources to engage in productive activityand attain marketing objectives (Amit and Schoemaker1993; Dutta, Narasimhan, and Rajiv 2005). Acquirers varyin terms of their marketing resources (e.g., sales personnel),and the differences in marketing resources create differences among acquirers’ marketing capabilities (Makadok2001). Prior empirical findings corroborate the argumentthat there is heterogeneity across firms’ marketing capabilities, even among firms in the same industry (Dutta,Narasimhan, and Rajiv 1999). Firms with stronger marketing capabilities will attribute higher value to targets’ brandsbecause their expectations of future revenues from a brandportfolio will be higher than firms with lower marketingcapabilities. This stems from the notion that acquirers withstronger marketing capabilities are able to deploy a target’sbrand portfolio more efficiently, which will affect theirlevel, growth, and volatility of cash flow expectations fromthe target’s brand portfolio. More specifically, “marketingcompetent” acquirers may leverage a target’s brands successfully in the following ways: (1) by achieving the sameor higher level of revenues by spending fewer marketingdollars, leading to expectations of a greater cash flow; (2)by extending the target’s brands to new markets more efficiently, thus enabling an expectation of a greater level ofgrowth in cash flow; (3) by cobranding the target’s brandswith existing brands more efficiently, also leading to greaterexpectations of cash flow; or (4) by better withstanding thecompetitive pressures from other brands, leading to a lowervolatility/vulnerability of expected cash flow and, thus,lower discount rates. An awareness of the capability to execute these possibilities will lead an acquirer to attributehigher value to the target firm’s brand portfolio.H1: The greater the acquirer’s marketing capability, the higheris the target firm’s brand portfolio value.Acquirer brand portfolio diversity. Brand portfoliodiversity is defined as the degree to which a firm chooses toserve markets with different brands. Brand diversity is lowwhen the firm uses a single brand or few brands acrossindustries (e.g., General Electric). If the firm uses differentbrand names across its businesses, brand portfolio diversityis high (e.g., Procter & Gamble). A highly diverse brandportfolio enables the firm to customize the brands for thespecific needs of different customer segments and to enjoythe revenue and price premium benefits of differentiation.However, such portfolios tend to be much less efficient interms of marketing spending than less diverse brand portfolios (e.g., Rao, Agarwal, and Dahlhoff 2004).In the context of an M&A, an acquirer with a diversebrand portfolio will keep more of the target firm’s brandsactive following the M&A. In contrast, if the acquirer’sbrand portfolio diversity is low, the acquirer will divestmost or all of the target firm’s brands because keeping thetarget’s brands alive will hurt the economies of scale inmarketing spending.Financial Value of Brands in Mergers and Acquisitions / 51

If fewer brands are retained, the acquirer’s level of cashflow expectations from the target firm’s brand portfolio willbe lower than when a larger number of brands are retained.Consequently, a fewer number of brands retained will leadto lower brand portfolio value. Empirical findings suggestthat the target’s assets are more likely to be divested thanthe acquirer’s assets following a transaction (Capron,Mitchell, and Swaminathan 2001). Brands are subject todivestiture along with other assets. A recent review of 207M&As completed since 1995 reports that target brands aredivested in 39.6% of the transactions (Ettenson andKnowles 2006). As a case in point, after the merger betweenAT&T and SBC Communications, AT&T (which has lowbrand portfolio diversity) decided to abandon the popularCingular brand and logo in 2007 (Advertising Age 2006).Given the empirical and anecdotal evidence that theacquirer is likely to keep few, if any, of the target’s brandsalive when the acquirer’s brand portfolio diversity is low,we posit the following:H2: The greater the acquirer’s brand portfolio diversity, thehigher is the target firm’s brand portfolio value.Target CharacteristicsTarget marketing capability. Traditionally, firms’ marketing objectives have been customer satisfaction, marketshare, and sales growth. However, achieving these objectives may be costly. Indeed, firms are increasingly interested in the productivity of marketing investments (Rust etal. 2004). If revenues are highly dependent on substantialmarketing spending, the margins on the brands will be low.Thus, the critical metric for the acquirer firm is the outputs(revenues) generated by marketing inputs (advertising andpromotion). Target firms with strong marketing capabilitiesare likely to achieve financial outcomes more efficientlythan firms with weaker marketing capabilities. Empiricalfindings suggest that stronger marketing capabilities lead tohigher firm profitability (Dutta, Narasimhan, and Rajiv1999), implying that firms with stronger capabilitiesachieve efficiency in marketing spending. This efficiencywill affect an acquirer’s level of cash flow expectationsfrom the brand portfolio. If the target firm is productivewith respect to marketing spending, the acquirer firm willbe able to generate higher revenues from the target firm’sbrand portfolio with lower marketing spending in the future.Similarly, the acquiring firm can extend a target firm’sbrand to new categories and cross-sell its brands in the target’s market by leveraging the target’s marketing capability,thus increasing both the level and the growth rate ofacquirer’s cash flow expectations.Furthermore, the target firm’s marketing capability mayoperate as insurance against the existing and potentialcompetitive pressures. Consequently, the acquirer’s volatility and vulnerability expectations associated with the cashflows from target firm brands will be much lower. Lessrisky cash flows will lead to higher brand value. Formally,H3: The greater the target’s marketing capability, the higher isthe target firm’s brand portfolio value.52 / Journal of Marketing, November 2008Target brand portfolio diversity. When brand portfoliodiversity is high, revenues tend to be higher as a result ofbetter targeting and positioning, but marketing spendingalso tends to be higher because of the separate marketingsupport needs of different brands. Empirical evidence issparse on the net performance effects of high versus lowbrand portfolio diversity effects. Rao, Agarwal, andDahlhoff (2004) find that a corporate branding strategy (lowbrand portfolio diversity) has a higher positive effect onTobin’s q than a house-of-brands strategy. In contrast, Morgan and Rego (2006) find a positive relationship betweenbrand portfolio size and Tobin’s q.In the M&A context, brand portfolios with low diversity provide lower growth opportunities. As the brand portfolio diversity decreases, the extension options diminishbecause further extending the few brands in the portfolioholds risks of brand dilution. However, more diverse brandportfolios provide strategic options for the acquirer (i.e.,flexibility in terms of brand extension opportunities). Theacquirer can generate additional cash flows by using the target’s brands in new markets or categories. The acquirer cancherry-pick the brand it wants to extend to new categories.The presence of extension options will increase theacquirer’s level and growth of cash flow expectations fromthe acquired brand portfolio. For example, when Liz Claiborne acquired Prana (a maker of apparel for climbing,yoga, and outdoor activities), Paul Charron, CEO of LizClaiborne, argued that Prana provided strategic brandextension opportunities in nonapparel categories (Ryan2005). Similarly, after AOL/Time Warner’s acquisition ofIPC Media, Michael Pepe, CEO of Time International, contended that IPC Media had a brand portfolio in the publishing business that provided extension opportunities (Brech2001). Collectively, these examples corroborate the argument that more diverse brand portfolios offer more extension opportunities to the acquirer. In the presence of multiple opportunities, the acquirer’s expectations of the leveland growth rate of cash flows from the target brand portfolio will be greater because the acquirer will be able togenerate additional revenue streams by leveraging theseextension opportunities. Consequently,H4: The greater the target’s brand portfolio diversity, thehigher is the target firm’s brand portfolio value.ModeratorsThe acquirer’s and target’s marketing capabilities and brandportfolio strategies will affect the acquirer’s cash flowexpectations from the target firm’s brand portfolio. However, the literature suggests two contingencies as candidatesthat are likely to influence the impact of marketing capability and brand portfolio strategy on brand value. First, theacquirer’s M&A strategy, which is treated as a determinantof its cash flow expectations in the strategy literature (e.g.,Brush 1996), is likely to cause redundancy among acquirerand target brand portfolios and marketing capabilities. Inturn, redundancy is likely to affect the acquirer’s cash flowexpectations. Second, target sales growth is considered amoderator because executives frequently focus more onshort-term performance metrics than on long-term metrics,

such as marketing capabilities. Because marketing capability is a key variable in the model, we examine the moderating effect of sales growth on the relationship between targetmarketing capability and target brand value.M&A StrategyM&A strategy and acquirer firm brand portfolio diversity. When the acquirer and the target operate in the sameindustry, the redundancy between the acquirer’s and thetarget’s brands will be greater (Varadarajan, DeFanti, andBusch 2006). Acquirers with more diverse brand portfolioswill suffer more from redundancy than acquirers with lessdiverse brand portfolios because firms with more diversebrand portfolios will have more brands targeted at differentconsumer segments within the same industry. The overlapamong brand portfolios will cause a cannibalization of cashflows. Consequently, to minimize the cash flow cannibalization, the acquirer’s propensity to retain the target’sbrands will be lower. For example, Procter & Gambledecided to divest Gillette’s Right Guard, Soft & Dri, andDry Idea brands in the deodorant category even thoughProcter & Gamble has a highly diverse brand portfolio.Fewer brands retained will lead to a lower level of cash flowexpectations from target brands. Furthermore, the acquirer’scash flow expectations from the target’s brand portfolio willbe lower even for the retained brands. The presence of multiple brands in the same industry will inevitably lead to cannibalization of cash flows because customer segments inmany industries are not separated by distinct borders. Thus:H5: The expected positive effect of the acquirer’s brand portfolio diversity on a target firm’s brand portfolio value islower (higher) when the M&A strategy is synergistic(nonsynergistic).M&A strategy and target firm marketing capability. Asynergistic M&A strategy is likely to lead to redundancybetween an acquirer’s and a target’s marketing capabilities.There may be overlaps in skills between the acquirer’s andthe target’s marketing personnel. In such cases, the acquirermay put less of a premium on the target’s marketing capability for generating additional cash flows because similarcapabilities reside in the acquirer. In extreme cases of overlap among the marketing capabilities of the target and theacquirer, the acquirer may deploy the target’s marketingpersonnel elsewhere (Capron and Hulland 1999). In thepresence of redundancy between target and acquirer marketing capabilities, the ability of the target’s marketing capability to affect the acquirer’s cash flow expectations will beinhibited. Thus:H6: The expected positive effect of the target’s marketingcapability on its brand portfolio value is lower (higher)when the M&A strategy is synergistic (nonsynergistic).Target Sales GrowthTarget sales growth and target firm marketing capability. Firms with stronger marketing capabilities are moreefficient in deploying marketing resources, leading tohigher profitability (Dutta, Narasimhan, and Rajiv 1999).Such firms are attractive candidates for acquisition as aresult of their potential to generate long-term market perfor-mance based on their marketing capabilities. If a target hasa high level of sales growth, acquirer executives may perceive the higher sales growth as additional evidence of thetarget’s marketing capabilities. In such a case, an acquirer’scash flow expectations will be influenced more by the target’s marketing capability. However, acquirer firms may notalways focus on marketing capabilities and long-term performance. Publicly traded firms are usually under pressureto meet quarterly earning estimates driven by short- tomedium-term sales growth expectations (Dobbs and Koller2005; Graham, Harvey, and Rajgopal 2005). Consequently,capturing a firm’s growth opportunities is a key driver ofM&A deals. For example, Jones Apparel Group acquiredBarneys New York “to enter the high-growth, resilient luxury goods market” (Jones Apparel Group 2006). If the target achieves a high level of sales growth, an acquirer maypay less attention to the target’s marketing capabilities andfocus more on short-term growth. In that case, the positiveinfluence of the target’s marketing capability on anacquirer’s cash flow expectations will be lower. Given thecompeting explanations on the moderating role of salesgrowth, we do not pose a directional hypothesis, and the neteffect will be determined empirically.Control VariablesWe include four industry factors to control for their effectson the acquirer’s cash flow expectations from acquiredbrands: (1) industry growth, (2) industry demand risk, (3)industry competition, and (4) industry type. We capture thenature of a target firm’s industry by categorizing industriesinto two groups: product- or service-oriented industries.Competing views exist on brands’ abilities to generate cashflows in these two industries. Ambler and colleagues (2002)argue that brands may be less important in service-orientedindustries than in goods-oriented industries. In contrast,Bharadwaj, Varadarajan, and Fahy (1993) contend thatservice firms require strong brands to “tangibilize” theintangible nature of the offering.A competing explanatory mechanism that could potentially capture the variability in reported values of acquiredbrands is the firms’ incentives to manipulate financial statements. The accounting literature notes that firms may overestimate or underestimate the value of acquired intangibleassets for financial reporting purposes (e.g., Wyatt 2005).Muller (1999) discusses the potential impact of two factorson brand value reporting: leverage and financing considerations. First, attributing value to brands improves the leverage ratio, possibly helping the firm to secure long-term debtfrom financial institutions. Second, anecdotal evidence(e.g., Jackson 1996) suggests that firms use brand valuations to support the raising of new loan capital, so we incorporate acquirer leverage and financing considerations ascontrols.MethodologySampleThe population for the study is all M&As in which the targets and acquirers were U.S.-based public firms during theFinancial Value of Brands in Mergers and Acquisitions / 53

period from 2001 to 2005. We began sampling in 2001because detailed reporting of intangible assets in M&Atransactions was only voluntary before this time. Wefocused on public firms because the data for the dependentvariables and some of the independent variables (e.g., marketing capability) were available only for public companies.We randomly sampled transactions from a wide range ofindustries and reviewed the SEC filings of all the firms inthe sampled industries. Of the 268 transactions reviewed,target brand portfolio value was recognized in 133 transactions, which serves as the sample for the main model in theestimation.Of the target firms, 31.58% operated in the business services industry, and 9% operated in the measurement instruments industry. Among the acquirer firms, 24.81% operatedin the business services industry, and 12.78% operated inthe industrial, commercial machinery, and computer equipment industries.Data SourcesWe compiled the data set manually from several secondarysources, including SEC filings, COMPUSTAT, SDC Platinum, Advertising Age, the National Bureau of EconomicResearch (NBER) patent database, and the U.S. Patent andTrademark Office (USPTO). We collected data from COMPU

The branding strategy literature identifies the presence of three main branding strategies in practice: corporate, house-of-brands, and mixed (Laforet and Saunders 1994, 1999). On a branding strategy continuum, at one end is the corpo-rate branding strategy in which the firm uses only one br