Abstract:
In recent years, the importance of branding has dramatically increased on the ground that brands have the potential to be a source of long-term competitive advantages for any businesses. Although it seems that brand value, theoretically, has a significant impact on corporate profits, evaluating the brand value's influence level on corporate profits can give clear signals to both managers and investors to adopt the most accurate and probable decisions. Furthermore, another significant concern of this study is whether considering different types of business matters in such analyses. As a case study, this paper investigates the impact of brand value on corporate profit in two significant industries that operate in the Tehran Stock Exchange, i.e., petrochemical and banking industries which stand for B2B and B2C businesses respectively. To do so, the monthly data from June 2008 to June 2018 in a Panel GMM framework is applied. The results show that the effect of brand value on the profit of both the banking and petrochemical industries are positive and significant. These results also confirm that the effect of brand value on profitability in the B2C businesses (banking industry) is significantly higher, almost double, compared to the B2B (petrochemical industries) business group.
Machine summary:
On this basis, the main hypothesis addressed in the present study is the following: “The effect of brand value on the profit of the companies that are active in the banking industry, as examples of B2C markets, is higher than its effect on those operating in the petrochemical industry, as examples of B2B markets”.
The application of the RBT logic to the literature of marketing and brand management and also customer-firm relationship confirms that brand value – as a crucial intangible resource of a firm – can augment the sale promotion, income, profitability, and performance of the firm to successfully compete with other similar companies through increasing the number of its customers and promoting the reputation of the company (Wang and Sengupta, 2016; Iglesias et al.
Accordingly, as the primary purpose of the present study is to compare the impact of brand value on the profitability of different types of businesses, banking and petrochemical industries have been chosen as our case studies, respectively as B2C and B2B markets, in the Tehran Stock Exchange (TSE).
Based on the results presented in Table 4, it should be admitted that the effect of brand value on the profit of banking companies, as examples of B2C markets, is positive and significant.
, (2018), Bordley (2003), Bayus and Putsis (1999), and Quelch and Kenny (1995) who have fount out that the brand values' effect levels on corporate profit in each type of businesses like B2C markets are not the same.