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140-542: Continental Connection was the brand name under which several commuter airline carriers and their holding companies operated services marketed exclusively by Continental Airlines . As such, all Continental Connection banner carrier services were operated primarily with turboprop aircraft in contrast to Continental Express , whose flights were operated by Continental's regional jet partners, ExpressJet and Chautauqua Airlines . Continental Connection operations were merged into Continental Express in 2012. According to

280-439: A target audience . Marketers tend to treat brands as more than the difference between the actual cost of a product and its selling price; rather brands represent the sum of all valuable qualities of a product to the consumer and are often treated as the total investment in brand building activities including marketing communications. Consumers may look on branding as an aspect of products or services, as it often serves to denote

420-469: A titulus pictus . The inscription typically specified information such as place of origin, destination, type of product and occasionally quality claims or the name of the manufacturer. Roman marks or inscriptions were applied to a very wide variety of goods, including, pots, ceramics, amphorae (storage/shipping containers) and on factory-produced oil-lamps. Carbonized loaves of bread , found at Herculaneum , indicate that some bakers stamped their bread with

560-636: A brand may recognize that advertising touchpoints are most effective during the pre-purchase experience stage therefore they may target their advertisements to new customers rather than to existing customers. Overall, a brand has the ability to strengthen brand equity by using IMC branding communications through touchpoints. Brand communication is important in ensuring brand success in the business world and refers to how businesses transmit their brand messages, characteristics and attributes to their consumers . One method of brand communication that companies can exploit involves electronic word-of-mouth (eWOM). eWOM

700-400: A brand may showcase its primary attribute as environmental friendliness. However, a brand's attributes alone are not enough to persuade a customer into purchasing the product. These attributes must be communicated through benefits , which are more emotional translations. If a brand's attribute is being environmentally friendly, customers will receive the benefit of feeling that they are helping

840-403: A brand name is a "memory heuristic": a convenient way to remember preferred product choices. A brand name is not to be confused with a trademark which refers to the brand name or part of a brand that is legally protected. For example, Coca-Cola not only protects the brand name, Coca-Cola , but also protects the distinctive Spencerian script and the contoured shape of the bottle. Brand identity

980-463: A brand with consumers. For example, a jingle or background music can have a positive effect on brand recognition, purchasing behaviour and brand recall. Therefore, when looking to communicate a brand with chosen consumers, companies should investigate a channel of communication that is most suitable for their short-term and long-term aims and should choose a method of communication that is most likely to reach their target consumers. The match-up between

1120-478: A brand, the more they trusted the brand. This suggests that a company could look to employ a social-media campaign to gain consumer trust and loyalty as well as in the pursuit of communicating brand messages. McKee (2014) also looked into brand communication and states that when communicating a brand, a company should look to simplify its message as this will lead to more value being portrayed as well as an increased chance of target consumers recalling and recognizing

1260-518: A broad range of goods. In 1266, makers' marks on bread became compulsory in England. The Italians used brands in the form of watermarks on paper in the 13th century. Blind stamps , hallmarks , and silver-makers' marks —all types of brand—became widely used across Europe during this period. Hallmarks, although known from the 4th-century, especially in Byzantium, only came into general use during

1400-496: A business sells sub-standard products to reduce cost and make a quick profit, it damages its reputation and therefore destroys competitive advantage in the future. The same holds true for businesses that neglect research or investment in motivated and well-trained employees. Shareholders, analysts and the media will usually find out about these issues and therefore reduce the price they are prepared to pay for shares of this business. This more detailed concept therefore gets rid of some of

1540-412: A category is differentiated from its competing brands, and thus the brand helps customers & potential customers understand which brand satisfies their needs. Thus, the brand offers the customer a short-cut to understanding the different product or service offerings that make up a particular category. Brand awareness is a key step in the customer's purchase decision process, since some kind of awareness

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1680-417: A certain attractive quality or characteristic (see also brand promise). From the perspective of brand owners, branded products or services can command higher prices. Where two products resemble each other, but one of the products has no associated branding (such as a generic , store-branded product), potential purchasers may often select the more expensive branded product on the basis of the perceived quality of

1820-422: A company's worth. When all of a company's focus and strategy is concentrated on increasing share prices, the practice and ethics of the firm can become lost because of the following problems with the shareholder value model. In the shareholder value model, companies often take on much more risk than they otherwise would. The acquisition of debt makes the company unstable and at risk of bankruptcy . Plentiful debt

1960-1021: A corporation hopes to accomplish, and to explain why customers should choose one brand over its competitors. Brand personality refers to "the set of human personality traits that are both applicable to and relevant for brands." Marketers and consumer researchers often argue that brands can be imbued with human-like characteristics which resonate with potential consumers. Such personality traits can assist marketers to create unique, brands that are differentiated from rival brands. Aaker conceptualized brand personality as consisting of five broad dimensions, namely: sincerity (down-to-earth, honest, wholesome, and cheerful), excitement (daring, spirited, imaginative, and up to date), competence (reliable, intelligent, and successful), sophistication (glamorous, upper class, charming), and ruggedness (outdoorsy and tough). Subsequent research studies have suggested that Aaker's dimensions of brand personality are relatively stable across different industries, market segments and over time. Much of

2100-472: A different stage in a customer's cognitive ability to address the brand in a given circumstance. Marketers typically identify two distinct types of brand awareness; namely brand recall (also known as unaided recall or occasionally spontaneous recall ) and brand recognition (also known as aided brand recall ). These types of awareness operate in entirely different ways with important implications for marketing strategy and advertising. Brand recognition

2240-403: A function of the changing political economy throughout the late 20th century. The crux of their argument is based upon one main idea. The rise in prominence of institutional investors can be credited to three significant forces, namely organized labor, the state and the banks. The roles of these three forces shifted, or were abdicated, in an effort to keep corporate abuse in check. However, "without

2380-462: A given category, when prompted with a brand name, a larger number of consumers are typically able to recognize it. Brand recognition is most successful when people can elicit recognition without being explicitly exposed to the company's name, but rather through visual signifiers like logos, slogans, and colors. For example, Disney successfully branded its particular script font (originally created for Walt Disney's "signature" logo ), which it used in

2520-493: A high level of brand equity. Brand owners manage their brands carefully to create shareholder value . Brand valuation is a management technique that ascribes a monetary value to a brand. The word brand , originally meaning a burning piece of wood, comes from a Middle English brand , meaning "torch", from an Old English brand . It became to also mean the mark from burning with a branding iron. Branding and labeling have an ancient history. Branding probably began with

2660-507: A low-involvement purchasing decision. Brand recognition is often the mode of brand awareness that operates in retail shopping environments. When presented with a product at the point-of-sale, or after viewing its visual packaging, consumers are able to recognize the brand and may be able to associate it with attributes or meanings acquired through exposure to promotion or word-of-mouth referrals. In contrast to brand recall, where few consumers are able to spontaneously recall brand names within

2800-415: A prominent idea during the 1980s and 1990s, along with the management principle value-based management or managing for value. The term shareholder value , sometimes abbreviated to SV , can be used to refer to: For a publicly traded company, shareholder value is the part of its capitalization which is equity as opposed to long-term debt . In the case of only one type of stock , this would roughly be

2940-399: A receiver, it runs the risk of the receiver incorrectly interpreting the message. Therefore, a brand should use appropriate communication channels to positively "…affect how the psychological and physical aspects of a brand are perceived". In order for brands to effectively communicate to customers, marketers must "…consider all touch point |s, or sources of contact, that a customer has with

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3080-475: A share price) invest about half as much as privately held companies in the United States. Even shareholders have had disappointing results with poor returns on investment and a reduction in the population of publicly traded companies by 40%. In addition to reduced growth, critics also point to reduced productivity. Shareholder value can have a negative effect on employee morale as the entire mission of

3220-401: A special relationship to the corporation.  The corporation is permanent, the share-holder is transitory. It might even be said without much exaggeration that the corporation is really socially and politically a priori, whereas the share-holder's position is derivative and exists only in contemplation of law". Drucker's argument is expanded upon by anthropologist Karen Ho , who notes that in

3360-414: A trademark from the late 1870s, with great success. Pears' soap , Campbell's soup , Coca-Cola , Juicy Fruit chewing gum and Aunt Jemima pancake mix were also among the first products to be "branded" in an effort to increase the consumer's familiarity with the product's merits. Other brands which date from that era, such as Ben's Original rice and Kellogg's breakfast cereal, furnish illustrations of

3500-407: A trademark in the form of a 'White Rabbit", which signified good luck and was particularly relevant to women, who were the primary purchasers. Details in the image show a white rabbit crushing herbs, and text includes advice to shoppers to look for the stone white rabbit in front of the maker's shop. In ancient Rome , a commercial brand or inscription applied to objects offered for sale was known as

3640-509: A visual or verbal cue. For example, when looking to satisfy a category need such as a toilet paper, the customer would firstly be presented with multiple brands to choose from. Once the customer is visually or verbally faced with a brand, they may remember being introduced to it before. When given a cue, consumers able to retrieve the memory node associated with the brand exhibit brand recognition. Often, this form of brand awareness assists customers in choosing one brand over another when faced with

3780-413: Is a brand's personality . Quite literally, one can easily describe a successful brand identity as if it were a person. This form of brand identity has proven to be the most advantageous in maintaining long-lasting relationships with consumers, as it gives them a sense of personal interaction with the brand Collectively, all four forms of brand identification help to deliver a powerful meaning behind what

3920-420: Is a collection of individual components, such as a name, a design, a set of images, a slogan, a vision, writing style, a particular font or a symbol etc. which sets the brand aside from others. For a company to exude a strong sense of brand identity, it must have an in-depth understanding of its target market, competitors and the surrounding business environment. Brand identity includes both the core identity and

4060-403: Is a fundamental asset to a brand's equity , the worth of a brand's identity would become obsolete without ongoing brand communication. Integrated marketing communications (IMC) relates to how a brand transmits a clear consistent message to its stakeholders . Five key components comprise IMC: The effectiveness of a brand's communication is determined by how accurately the customer perceives

4200-469: Is a precondition to purchasing. That is, customers will not consider a brand if they are not aware of it. Brand awareness is a key component in understanding the effectiveness both of a brand's identity and of its communication methods. Successful brands are those that consistently generate a high level of brand awareness, as this can be the pivotal factor in securing customer transactions. Various forms of brand awareness can be identified. Each form reflects

4340-410: Is a relatively new approach [Phelps et al., 2004] identified to communicate with consumers. One popular method of eWOM involves social networking sites (SNSs) such as Twitter . A study found that consumers classed their relationship with a brand as closer if that brand was active on a specific social media site (Twitter). Research further found that the more consumers "retweeted" and communicated with

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4480-401: Is conducive to increasing share value because the company has greater potential to increase value when starting at a lower baseline. This however is a detrimental to the stability of the company. Debt financing, or the purposeful acquisition of debt, causes the debt to equity ratio of the company to rise. Without shareholder value, this would normally be considered negative because it means that

4620-455: Is contrasted by the attitude adopted by management of modern-day corporations, which according to former WebTV CEO Randy Komisar see themselves not as institutional stewards but rather as investors themselves. Critics such as Ho believe that the shift of management attitude towards treating corporations as investments has led to the decline of the corporation as a social entity, and allows corporate management to make decisions that may be against

4760-511: Is difficult to implement in practice because of the difficulty of determining equivalent measures for usefulness to society and satisfaction of employees. For instance, how much additional "usefulness to society" should shareholders expect if they were to give up $ 100 million in shareholder return? In response to this criticism, defenders of the stakeholder value concept argue that employee satisfaction and usefulness to society will ultimately translate into shareholder value. Another related criticism

4900-426: Is difficult to influence directly by any manager, it is usually broken down in components, so called value drivers. A widely used model comprises 7 drivers of shareholder value, giving some guidance to managers: Looking at some of these elements also makes it clear that short term profit maximization does not necessarily increase shareholder value. Most notably, the competitive advantage period takes care of this: if

5040-485: Is negligible strong evidence that shareholder value theory has produced better results for businesses (studies that did provide evidence of shareholder value being beneficial generally were not able to be replicated; Stout). Since the inception and widespread application of shareholder value theory, returns on invested capital have steadily decreased. One explanation for this trend is reduced investment in innovation. Studies have shown that publicly traded companies (who have

5180-424: Is often acknowledged as the "dawn of the shareholder-value movement". Welch did not mention the term "shareholder value", but outlined his beliefs in selling underperforming businesses and cutting costs to increase profits faster than global economic growth. In 1983, Brian Pitman became CEO of Lloyds Bank and sought to clarify the governing objective for the company. The following year, he set return on equity as

5320-421: Is often little to differentiate between several types of products in the 21st century, hence branding is among a few remaining forms of product differentiation . Brand equity is the measurable totality of a brand's worth and is validated by observing the effectiveness of these branding components. When a customer is familiar with a brand or favors it incomparably over its competitors, a corporation has reached

5460-442: Is one of the initial phases of brand awareness and validates whether or not a customer remembers being pre-exposed to the brand. Brand recognition (also known as aided brand recall ) refers to consumers' ability to correctly differentiate a brand when they come into contact with it. This does not necessarily require consumers to identify or recall the brand name. When customers experience brand recognition, they are triggered by either

5600-448: Is prevalent in regions where limited liability laws are not strong. Some companies, choosing to prioritize social responsibility, elect to prioritize the social and financial welfare of employees and suppliers over shareholders; this, in turn, shields shareholders, the owners of the company, from liability when the law would not be lenient should the company engage in poor behavior. Despite its high potential social benefit, this concept

5740-406: Is stronger than brand recognition, as the brand must be firmly cemented in the consumer's memory to enable unassisted remembrance. This gives the company huge advantage over its competitors because the customer is already willing to buy or at least know the company offering available in the market. Thus, brand recall is a confirmation that previous branding touchpoints have successfully fermented in

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5880-537: Is that it is difficult to determine how to equitably distribute value to stakeholders. The question of "who deserves what and how much" is a difficult one to answer. A company may choose to disregard shareholders completely. A social enterprise instead focuses its objectives on goals other than the profitability of its owners; indeed, the constitution of a social enterprise often precludes issuing dividends to shareholders. Social enterprises require significant investment in financial stability and long-term profitability, in

6020-461: Is that the compensation of executives and managers is increasingly tied to stock value through executive bonuses and stock options. Corporations use several gimmicks to increase stock price, perhaps the most infamous being the mass layoffs of employees which creates the appealing image of increased efficiency and lower operating costs, in turn driving up stock price. However, this and other such gimmicks have several negative consequences. Oftentimes, in

6160-427: Is the growth of financialization . The financial industry has ballooned in size following the use of shareholder value, largely due to the outsized importance placed upon shareholders by corporations. The large financial sector is a drain on the entire United States economy, costing roughly 300 billion dollars per year. This is because the financial sector does not engage in actual production. While shareholder value

6300-564: Is the herbal paste known as chyawanprash , consumed for its purported health benefits and attributed to a revered rishi (or seer) named Chyawan. One well-documented early example of a highly developed brand is that of White Rabbit sewing needles, dating from China's Song dynasty (960 to 1127 CE). A copper printing plate used to print posters contained a message which roughly translates as: "Jinan Liu's Fine Needle Shop: We buy high-quality steel rods and make fine-quality needles, to be ready for use at home in no time." The plate also includes

6440-458: Is the most common framework for measuring a company's success and financial viability, a number of alternatives have been proposed. Indeed, maximizing shareholder value is not always the goal of successful companies. The broad idea of "stakeholder value" is the most common basis of alternative frameworks. The intrinsic or extrinsic worth of a business measured by a combination of financial success, usefulness to society, and satisfaction of employees,

6580-416: Is the mystification surrounding its legal validity. It is often espoused that shareholders are the owners. This status as a shareholder comes with an assumed legal claim of all profits after contractual obligations have been fulfilled and that they have the ability to decide the structure of the corporation on the board level however they want. Yet, none of these are rooted in any law because shareholder value

6720-494: Is the paramount interest of the management of a company was published in Fortune magazine in 1962 in an article by the management of a US textile company, Indian Head Mills, whose history can be traced back to the 1820s. The article stated that: The objective of our company is to increase the intrinsic value of our common stock. We are not in business to grow bigger for the sake of size, not to become more diversified, not to make

6860-430: Is the study of problems characterized by disconnects between two cooperating parties: a principal and an agent. Agency problems arise in situations where there is a division of labor, a physical or temporal disconnect separating the two parties, or when the principal hires an agent for specialized expertise. In these circumstances, the principal takes on the agent to delegate responsibility to him. Theorists have described

7000-437: Is ultimately a management decision, not a legal requirement. Corporations are their own legal entity and shareholders simply hold shares, making them equal stakeholders to employees, suppliers, and more. They only get guaranteed full access to residual funds in the case of liquidation. Otherwise, the firm has all control of how to do things as they please like investing into the company, raising salaries, etc. And when it comes to

7140-432: The 2007–2008 financial crisis . While a focus on shareholder value can benefit the owners of a corporation financially, it does not provide a clear measure of social issues like employment , environmental issues, or ethical business practices. A management decision can maximize shareholder value while lowering the welfare of third parties . Shareholder value coupled with short-termism has also been criticized as lowering

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7280-724: The Official Airline Guide , earlier Continental Express flights, such as those operated by Royale Airlines followed by Britt Airways from the Continental hub at Houston Intercontinental Airport (IAH), were operated with such turboprop aircraft as the ATR 42 , Embraer EMB 110 , Embraer EMB 120 , and Grumman Gulfstream I during the 1980s. All flights operated by Continental Connection carriers were given full OnePass frequent-flyer credit, as if they were mainline Continental flights. The "Continental Connection" name

7420-784: The Qin dynasty (221-206 BCE); large numbers of seals survive from the Harappan civilization of the Indus Valley (3,300–1,300 BCE) where the local community depended heavily on trade; cylinder seals came into use in Ur in Mesopotamia in around 3,000 BCE, and facilitated the labelling of goods and property; and the use of maker's marks on pottery was commonplace in both ancient Greece and Rome. Identity marks, such as stamps on ceramics, were also used in ancient Egypt. Diana Twede has argued that

7560-478: The marketing and communication techniques and tools that help to distinguish a company or products from competitors, aiming to create a lasting impression in the minds of customers . The key components that form a brand's toolbox include a brand's identity, personality, product design , brand communication (such as by logos and trademarks ), brand awareness , brand loyalty , and various branding ( brand management ) strategies. Many companies believe that there

7700-559: The welfare of shareholders, broadly construed, not just their financial interests. Many shareholders are prosocial , and maximizing shareholder value may sometimes mean making business decisions that prioritize the social issues that investors care about, even at the expense of profits. Likewise, Lynn A. Stout writes that shareholder value is not a singular objective, because "different shareholders have different values. Some are long-term investors planning to hold stock for years or decades; others are short-term speculators." Agency theory

7840-481: The "consumer packaging functions of protection, utility and communication have been necessary whenever packages were the object of transactions". She has shown that amphorae used in Mediterranean trade between 1,500 and 500 BCE exhibited a wide variety of shapes and markings, which consumers used to glean information about the type of goods and the quality. The systematic use of stamped labels dates from around

7980-484: The "cool" factor. This began the modern practice now known as branding , where the consumers buy the brand instead of the product and rely on the brand name instead of a retailer's recommendation. The process of giving a brand "human" characteristics represented, at least in part, a response to consumer concerns about mass-produced goods. The Quaker Oats Company began using the image of the Quaker Man in place of

8120-400: The "…potential to add positive – or suppress negative – associations to the brand's equity" Thus, a brand's IMC should cohesively deliver positive messages through appropriate touch points associated with its target market. One methodology involves using sensory stimuli touch points to activate customer emotion. For example, if a brand consistently uses a pleasant smell as a primary touchpoint,

8260-415: The 1970s, there was an economic crisis caused by stagflation . The stock market had been flat for nearly 12 years and inflation levels had reached double-digits. The Japanese had taken the top spot as the dominant force in auto and high technology manufacturing, a title historically held by American companies. This, coupled with the economic changes noted by Mark Mizruchi and Howard Kimeldorf, brought about

8400-518: The 1st century CE. The use of hallmarks , a type of brand, on precious metals dates to around the 4th century CE. A series of five marks occurs on Byzantine silver dating from this period. Some of the earliest use of maker's marks, dating to about 1,300 BCE, have been found in India. The oldest generic brand in continuous use, known in India since the Vedic period ( c.  1100 BCE to 500 BCE),

8540-606: The 6th century BCE. A vase manufactured around 490 BCE bears the inscription " Sophilos painted me", indicating that the object was both fabricated and painted by a single potter. Branding may have been necessary to support the extensive trade in such pots. For example, 3rd-century Gaulish pots bearing the names of well-known potters and the place of manufacture (such as Attianus of Lezoux , Tetturo of Lezoux and Cinnamus of Vichy ) have been found as far away as Essex and Hadrian's Wall in England. English potters based at Colchester and Chichester used stamps on their ceramic wares by

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8680-403: The 80's and 90's, numerous companies faced lawsuits from current and former employees alike for reducing or withholding workers from accessing benefits in the present or during retirement. The SV model has led to reduced pension support as a means of maximizing profits at the cost of the employees. Some companies have switched matching pension plans monthly to once a year. Critics remain alarmed at

8820-565: The CEO and for the board to be independently chosen. An independent board can best objectively monitor CEO undertakings and risk. Shareholder value also argues in favor of increased financial transparency. By making firms' finances available to scrutiny, shareholders become more aware of the agent's behavior and can make informed choices about with whom to invest. As a management principle, value-based management (VBM), or managing for value (MFV), states that management should first and foremost consider

8960-534: The Medieval period. British silversmiths introduced hallmarks for silver in 1300. Some brands still in existence as of 2018 date from the 17th, 18th, and 19th centuries' period of mass-production. Bass Brewery , the British brewery founded in 1777, became a pioneer in international brand marketing. Many years before 1855, Bass applied a red triangle to casks of its pale ale. In 1876, its red-triangle brand became

9100-558: The argument that the business of business is its business. Friedman's postulation suggests that if social responsibility and profit run counterintuitive, pick the latter. By prioritizing the accumulation of wealth by all means, it uncomplicated other responsibilities that may have a hindrance to achieving this goal. Some responsibilities include, but are not limited to: community development, employee investment, worker benefits, research and development, and more. These responsibilities are attributed to being long term and do not immediately satisfy

9240-476: The atrium, and bearing labels as follows: Scaurus' fish sauce was known by people across the Mediterranean to be of very high quality, and its reputation traveled as far away as modern France. In both Pompeii and nearby Herculaneum, archaeological evidence also points to evidence of branding and labeling in relatively common use across a broad range of goods. Wine jars, for example, were stamped with names, such as "Lassius" and "L. Eumachius"; probably references to

9380-524: The barrels used, effectively using a corporate trademark as a quasi-brand. Factories established following the Industrial Revolution introduced mass-produced goods and needed to sell their products to a wider market—that is, to customers previously familiar only with locally produced goods. It became apparent that a generic package of soap had difficulty competing with familiar, local products. Packaged-goods manufacturers needed to convince

9520-427: The beginnings of brand management. This trend continued to the 1980s, and as of 2018 is quantified by marketers in concepts such as brand value and brand equity . Naomi Klein has described this development as "brand equity mania". In 1988, for example, Philip Morris Companies purchased Kraft Foods Inc. for six times what the company was worth on paper. Business analysts reported that what they really purchased

9660-401: The brand and is termed the consumer's brand experience . The brand is often intended to create an emotional response and recognition, leading to potential loyalty and repeat purchases. The brand experience is a brand's action perceived by a person. The psychological aspect, sometimes referred to as the brand image , is a symbolic construct created within the minds of people, consisting of all

9800-412: The brand has a much higher chance of creating a positive lasting effect on its customers' senses as well as memory. Another way a brand can ensure that it is utilizing the best communication channel is by focusing on touchpoints that suit particular areas associated with customer experience . As suggested Figure 2, certain touch points link with a specific stage in customer-brand-involvement. For example,

9940-413: The brand or on the basis of the reputation of the brand owner. Brand awareness involves a customer's ability to recall and/or recognize brands, logos, and branded advertising. Brands help customers to understand which brands or products belong to which product or service category. Brands assist customers to understand the constellation of benefits offered by individual brands, and how a given brand within

10080-425: The brand". Touch points represent the channel stage in the traditional communication model, where a message travels from the sender to the receiver. Any point where a customer has an interaction with the brand - whether watching a television advertisement, hearing about a brand through word of mouth or even noticing a branded license plate – defines a touchpoint. According to Dahlen et al. (2010), every touchpoint has

10220-400: The brand's intended message through its IMC. Although IMC is a broad strategic concept, the most crucial brand communication elements are pinpointed to how the brand sends a message and what touch points the brand uses to connect with its customers [Chitty 2005]. One can analyze the traditional communication model into several consecutive steps: When a brand communicates a brand identity to

10360-509: The brand, he or she is more likely to try other products offered by the company – such as chocolate-chip cookies, for example. Brand development, often performed by a design team , takes time to produce. A brand name is the part of a brand that can be spoken or written and identifies a product, service or company and sets it apart from other comparable products within a category. A brand name may include words, phrases, signs, symbols, designs, or any combination of these elements. For consumers,

10500-455: The brand. In 2012 Riefler stated that if the company communicating a brand is a global organization or has future global aims, that company should look to employ a method of communication that is globally appealing to their consumers, and subsequently choose a method of communication with will be internationally understood. One way a company can do this involves choosing a product or service's brand name, as this name will need to be suitable for

10640-557: The change in number of shares. The short-term nature of shareholder value theory is one of the features focused on by critics. They argue that this fixation on the short term leads to neglect of more profitable long-term strategies. In this way, shareholder value fails to attain the level of overall capital growth that might otherwise be expected. Given the emphasis on stock price inherent to shareholder value, incentives are created for corporations to inflate their stock price before its value becomes critical for assessment. One such incentive

10780-448: The company in danger of bankruptcy and collapse. In order to facilitate an incentive structure that supports shareholder value, the method of executive compensation has changed toward making a large portion of C-suite pay come from stock. The reasoning behind this decision was that it would bring the interests of CEOs in line with those of shareholders. As a result of this decision, executive compensation has skyrocketed, quadrupling from

10920-399: The company is not making money. In the shareholder value system, high debt to equity ratios are considered an indicator that the company has confidence to make money in the future. Therefore, debt is not something to avoid but rather something to embrace and having debt will actually gain the company investors. Taking on large risk attracts investors and increases potential value gain, but puts

11060-455: The company. Economist Milton Friedman introduced the Friedman doctrine in a 1970 essay for The New York Times , entitled "A Friedman Doctrine: The Social Responsibility of Business Is to Increase Its Profits". In it, he argued that a company has no social responsibility to the public or society; its only responsibility is to its shareholders . The Friedman doctrine was amplified after

11200-501: The consumer through branding. Producers began by attaching simple stone seals to products which, over time, gave way to clay seals bearing impressed images, often associated with the producer's personal identity thus giving the product a personality. Not all historians agree that these markings are comparable with modern brands or labels, with some suggesting that the early pictorial brands or simple thumbprints used in pottery should be termed proto-brands while other historians argue that

11340-401: The corporation as a whole. Though Ashan and Kimeldorf (1990) admit that their analysis of what historically led to the shareholder value model is speculative, their work is well regarded and is built upon the works of some of the premier scholars in the field, namely Frank Dobbin and Dirk Zorn. As a result of the political and economic changes of the late 20th century, the balance of power in

11480-514: The corporation becomes the generation of wealth for shareholders. Because of this reduction of motivation, corporations need to engage in more top-down and control-oriented management strategies, one such example being the massive rise in the use of non-compete agreements . Despite such efforts (or because of them), low employee morale has negative effects on business. Less motivated employees are less energetic and produce less and are less likely to innovate. A further inefficiency of shareholder value

11620-456: The economy began to shift. Today, "...power depends on the capacity of one group of business experts to alter the incentives of another, and on the capacity of one group to define the interests of another". As stated earlier, what made the shift to the shareholder value model unique was the ability of those outside the firm to influence the perceived interests of corporate managers and shareholders. However, Dobbin and Zorn argue that those outside

11760-516: The environment by associating with the brand. Aside from attributes and benefits, a brand's identity may also involve branding to focus on representing its core set of values . If a company is seen to symbolize specific values, it will, in turn, attract customers who also believe in these values. For example, Nike's brand represents the value of a " just do it " attitude. Thus, this form of brand identification attracts customers who also share this same value. Even more extensive than its perceived values

11900-523: The eventual consequence when this bubble will burst, the majority of Americans will face the consequence, not the ones leading the firms. Peter Drucker , author of "The Concept of the Corporation", makes the argument that shareholder value in fact serves to underplay the important social role which corporations occupy in contemporary society. Drucker states "In the social reality of today, shareholders are but one of several groups of people who stand in

12040-437: The expense of gimmicks that briefly boost a stocks value can have negative impacts on its long term value. Marc Benioff , CEO of Salesforce , said that "[...] the obsession with maximizing profits for shareholders has brought us: terrible economic, racial and health inequalities; the catastrophe of climate change." According to critics, oversimplifying the corporation's role has neglected the imperfect world we live in. Within

12180-496: The expense of shareholders. Examples of this include acquisitions which are dilutive to shareholders, that is, they may cause the combined company to have twice the profits for example but these might have to be split amongst three times the shareholders. Although the legal premise of a publicly traded company is that the executives are obligated to maximize the company's profit, this does not imply that executives are legally obligated to maximize shareholder value. As shareholder value

12320-414: The extended identity. The core identity reflects consistent long-term associations with the brand; whereas the extended identity involves the intricate details of the brand that help generate a constant motif. According to Kotler et al. (2009), a brand's identity may deliver four levels of meaning: A brand's attributes are a set of labels with which the corporation wishes to be associated. For example,

12460-432: The firm were not operating with malicious intentions. "They conned themselves first and foremost. Takeover specialists convinced themselves that they were ousting inept CEOs. Institutional investors convinced themselves that CEOs should be paid for performance. Analysts convinced themselves that forecasts were a better metric for judging stock price than current profits". Overall, it was the political and economic landscape of

12600-648: The firm's stock price is in the interest of managers that receive stock compensation and may therefore cause them to focus on speculating on the stock price rather than maximizing real production. Management experts also cite another criticism of shareholder value's short-term view, namely that it creates a corporate culture more concerned with maximizing revenue than with maintaining relationships with employees, customers, or their surrounding communities. Business experts have criticized shareholder value for failing to materialize economic growth and increased productivity. Despite decades of research and dozens of studies, there

12740-426: The first registered trademark issued by the British government. Guinness World Records recognizes Tate & Lyle (of Lyle's Golden Syrup ) as Britain's, and the world's, oldest branding and packaging, with its green-and-gold packaging having remained almost unchanged since 1885. Twinings tea has used the same logo – capitalized font beneath a lion crest – since 1787, making it

12880-642: The fourth century BCE. In largely pre-literate society, the shape of the amphora and its pictorial markings conveyed information about the contents, region of origin and even the identity of the producer, which were understood to convey information about product quality. David Wengrow has argued that branding became necessary following the urban revolution in ancient Mesopotamia in the 4th century BCE, when large-scale economies started mass-producing commodities such as alcoholic drinks, cosmetics and textiles. These ancient societies imposed strict forms of quality-control over commodities, and also needed to convey value to

13020-448: The immediate period following the second world war, the corporation existed primarily as a social institution which largely accepted its responsibilities to those involved in its operations outside of shareholders, concerning itself with the longevity and well-being of the corporation as an institution even if this meant undertaking actions that may run counter to the immediate concerns of the corporation's shareholders. This post-war outlook

13160-436: The information and expectations associated with a product, with a service, or with the companies providing them. Marketers or product managers that responsible for branding, seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics, which make it special or unique. A brand can, therefore, become one of

13300-419: The interests of shareholders when making management decisions. Under this principle, senior executives should set performance targets in terms of delivering shareholder returns (stock price and dividends payments) and managing to achieve them. The concept of maximizing shareholder value is usually highlighted in opposition to alleged examples of CEO's and other management actions which enrich themselves at

13440-417: The interests of the corporation's social stakeholders or even longevity of the corporation itself. The failure of the corporation to readily fit within the neo-classical economic model which dominates contemporary economics academia and policy is a frequently-targeted flaw by critics. Anthropologist Karen Ho argues that the concept of shareholders and subsequently shareholder value was developed primarily for

13580-421: The internal discipline provided by the banks and external discipline provided by the state and labor, the corporate world has been left to the professionals who have the ability to manipulate the vital information about corporate performance on which investors depend". This allowed institutional investors and securities analysts from the outside to manipulate information for their own benefit rather than for that of

13720-579: The issues (though not all of them) typically associated with criticism of the shareholder value model. Based on these seven components, all functions of a business plan and show how they influence shareholder value. A prominent tool for any department or function to prove its value are so called shareholder value maps that link their activities to one or several of these seven components. So, one can find "HR shareholder value maps", "R&D shareholder value maps", and so on. The sole concentration on shareholder value has been widely criticized, particularly after

13860-592: The key measure of financial performance and set a target for every business within the bank to achieve a return that exceeded its cost of equity. The management consulting firms Stern Stewart, Marakon Associates , and Alcar pioneered value-based management (VBM), also known as managing for value (MFV), in the 1980s based on the academic work of Joel Stern , Dr. Bill Alberts, and Professor Alfred Rappaport . In "Creating Shareholder Value: The New Standard for Business Performance", published in 1986, Rappaport argued that "the ultimate test of corporate strategy, indeed

14000-428: The limited-input "owner and property" intentions of influential founding figures of neoclassical economics such as Adam Smith , and that the neoclassical economic model hinges on the idea of the owner-entrepreneur being directly involved in the management and operation of their enterprise. As the modern shareholder typically has very limited or no connection to the regular operations of a corporation they have invested in,

14140-430: The literature on branding suggests that consumers prefer brands with personalities that are congruent with their own. Consumers may distinguish the psychological aspect (brand associations like thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand) of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with

14280-419: The logo for go.com . Unlike brand recognition, brand recall (also known as unaided brand recall or spontaneous brand recall ) is the ability of the customer retrieving the brand correctly from memory. Rather than being given a choice of multiple brands to satisfy a need, consumers are faced with a need first, and then must recall a brand from their memory to satisfy that need. This level of brand awareness

14420-454: The long-term value of a company. "On the face of it, shareholder value is the dumbest idea in the world," he said. "Shareholder value is a result, not a strategy . . . Your main constituencies are your employees, your customers and your products." Welch later elaborated on this, clarifying that "my point is, increasing the value of your company in both the short and long term is an outcome of the implementation of successful strategies." During

14560-473: The market that the public could place just as much trust in the non-local product. Gradually, manufacturers began using personal identifiers to differentiate their goods from generic products on the market. Marketers generally began to realize that brands, to which personalities were attached, outsold rival brands. By the 1880s, large manufacturers had learned to imbue their brands' identity with personality traits such as youthfulness, fun, sex appeal, luxury or

14700-540: The marketplace that it aims to enter. It is important that if a company wishes to develop a global market, the company name will also need to be suitable in different cultures and not cause offense or be misunderstood. When communicating a brand, a company needs to be aware that they must not just visually communicate their brand message and should take advantage of portraying their message through multi-sensory information. One article suggests that other senses, apart from vision, need to be targeted when trying to communicate

14840-400: The minds of its consumers. Marketing-mix modeling can help marketing leaders optimize how they spend marketing budgets to maximize the impact on brand awareness or on sales. Managing brands for value creation will often involve applying marketing-mix modeling techniques in conjunction with brand valuation . Brands typically comprise various elements, such as: Although brand identity

14980-433: The most enduring campaigns of the 20th-century. Brand advertisers began to imbue goods and services with a personality, based on the insight that consumers searched for brands with personalities that matched their own. Effective branding, attached to strong brand values, can result in higher sales of not only one product, but of other products associated with that brand. If a customer loves Pillsbury biscuits and trusts

15120-431: The most or best of anything, not to provide jobs, have the most modern plants, the happiest customers, lead in new product development, or to achieve any other status which has no relation to the economic use of capital. Any or all of these may be, from time to time, a means to our objective, but means and ends must never be confused. We are in business solely to improve the inherent value of the common stockholders' equity in

15260-579: The most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace . This means that building a strong brand helps to distinguish a product from similar ones and differentiate it from competitors. The art of creating and maintaining a brand is called brand management . The orientation of an entire organization towards its brand is called brand orientation . Brand orientation develops in response to market intelligence . Careful brand management seeks to make products or services relevant and meaningful to

15400-564: The name of the producer. The use of identity marks on products declined following the fall of the Roman Empire . In the European Middle Ages , heraldry developed a language of visual symbolism which would feed into the evolution of branding, and with the rise of the merchant guilds the use of marks resurfaced and was applied to specific types of goods. By the 13th century, the use of maker's marks had become evident on

15540-492: The nature of cutting out or underestimating the value of the labor a worker produces for maintaining or raising the value of stock. The reduced benefits are attributed to the trend of the corporate world's reduction in investing in non-shareholder constituents because it is not an immediate money producer—the main goal of SV theory. The aforementioned status of workers faces criticism when looking at how this "reduced pension matching" loophole becomes manipulated. If laid off before

15680-529: The number of outstanding shares times current shareprice. Things like dividends augment shareholder value while issuing of shares ( stock options ) lower it. This shareholder value added should be compared to average/required increase in value, making reference to the organizations cost of capital . For a privately held company, the value of the firm after debt must be estimated using one of several valuation methods, such as discounted cash flow . The first modern articulation that shareholder wealth creation

15820-585: The only reliable measure, is whether it creates economic value for shareholders". Other consulting firms including McKinsey and BCG developed VBM approaches. Value-based management became prominent during the late 1980s and 1990s. In March 2009, Welch criticized parts of the application of this concept, saying he never meant to suggest boosting a company's share price should be the main goal of executives. He said managers and investors should not set share price increases as their overarching goal. He added that short-term profits should be allied with an increase in

15960-400: The overall rate of economic growth due to reduced business capital accumulation . It can also disadvantage other stakeholders such as customers. For example, a company may, in the interests of enhancing shareholder value, cease to provide support for old, or even relatively new, products. Additionally, short term focus on shareholder value can be detrimental to long term shareholder value;

16100-423: The partners in a private copartnery frequently watch over their own". Critics such as Ho and Smith believe that failure of the shareholder model to accurately represent the key neoclassical owner-entrepreneur concept is a foundational issue of the neoclassical economic model, leading to an inaccurate assumption that corporate interest remained identical to shareholder interest. A common critique of shareholder value

16240-657: The practice of branding livestock to deter theft. Images of the branding of cattle occur in ancient Egyptian tombs dating to around 2,700 BCE. Over time, purchasers realized that the brand provided information about origin as well as about ownership, and could serve as a guide to quality. Branding was adapted by farmers, potters, and traders for use on other types of goods such as pottery and ceramics. Forms of branding or proto-branding emerged spontaneously and independently throughout Africa, Asia and Europe at different times, depending on local conditions. Seals , which acted as quasi-brands, have been found on early Chinese products of

16380-407: The practice of branding objects extended to a broader range of packaging and goods offered for sale including oil , wine , cosmetics , and fish sauce and, in the 21st century, extends even further into services (such as legal , financial and medical ), political parties and people 's stage names. In the modern era, the concept of branding has expanded to include deployment by a manager of

16520-696: The pre-pension matching period is complete, there is no compensation. Furthermore, mass layoffs have affected companies in the home headquarters with many jobs either going overseas or being hired out to contractors from similar positions to those that were laid off for lower benefits and protections as critics and experts have noted. According to economic experts and critics alike, the downsize -and-distribute model invoked by SV theory extracts value and then further ingrains employee instability and greater income inequality. In Milton Friedman 's seminal piece advocating for shareholder value titled " The Social Responsibility of Business Is to Increase Its Profits " makes

16660-473: The presence of these simple markings does not imply that mature brand management practices operated. Scholarly studies have found evidence of branding, packaging, and labeling in antiquity. Archaeological evidence of potters' stamps has been found across the breadth of the Roman Empire and in ancient Greece . Stamps were used on bricks, pottery, and storage containers as well as on fine ceramics. Pottery marking had become commonplace in ancient Greece by

16800-500: The priorities determined by the makeup of the individuals and entities that together own the shares and direct the company. This is sometimes referred to as stakeholder value. Stakeholder value heavily relies on corporate social responsibility and long-term financial stability as a core business strategy. Academic Pete Thomas outlines one response which sees the idea of stakeholder management as "a dangerous and illegitimate challenge to shareholder interests". The stakeholder value model

16940-414: The problem as one of "separation and control": agents cannot be monitored perfectly by the principal, so they may shirk their responsibilities or act out of sync with the principal's goals. The information gap and the misalignment of goals between the two parties results in agency costs, which are the sum of the costs to the principal of monitoring, the costs to the agent of bonding with the principal, and

17080-518: The producer's name. Roman glassmakers branded their works, with the name of Ennion appearing most prominently. One merchant that made good use of the titulus pictus was Umbricius Scaurus, a manufacturer of fish sauce (also known as garum ) in Pompeii, c.  35 CE . Mosaic patterns in the atrium of his house feature images of amphorae bearing his personal brand and quality claims. The mosaic depicts four different amphora, one at each corner of

17220-448: The product, the consumer lifestyle, and the endorser is important for the effectiveness of brand communication. Shareholder value Shareholder value is a business term, sometimes phrased as shareholder value maximization . The term expresses the idea that the primary goal for a business is to increase the wealth of its shareholders (owners) by paying dividends and/or causing the company's stock price to increase. It became

17360-566: The publication of an influential 1976 business paper by finance professors Michael C. Jensen and William Meckling, "Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure", which provided a quantitative economic rationale for maximizing shareholder value. On August 12, 1981, Jack Welch made a speech at The Pierre Hotel in New York City called "Growing Fast in a Slow-Growth Economy", which

17500-424: The purpose of shoehorning the insertion of the corporation into the neoclassical economic model, and ignores that the neoclassical model, which was originally created in eighteenth and nineteenth century prior to the proliferation of corporate organization, was never designed to operate with number of inputs the modern corporation requires. Ho claims that advocates of neoclassical proprietorship ran directly counter to

17640-504: The question as to how to fix the current model of management. Though there were contending solutions to resolve these problems (e.g. Theodore Levitt 's focus on customer value creation and R. Edward Feeman's stakeholder management framework), the winner was the Agency Theory developed by Jensen and Meckling. Mizruchi and Kimeldorf offer an explanation of the rise in prominence of institutional investors and securities analysts as

17780-422: The rate of compensation in the early 1970s. This change has also shifted the motivations of C-suite managers in the direction of increasing share price over everything else, leaving other goals like long-term growth and stakeholders like employees and customers behind. Share repurchasing might cause misaligned incentives between market capitalization and executive compensation connected to share price due to

17920-399: The residual loss due to the disconnect between the principal's interests and agent's decisions. Lastly, the shareholder value theory seeks to reform the governance of publicly owned firms in order to decrease the principal-agent information gap. The model calls for firms' boards to be independent from their corporate executives, specifically, for the head of the board to be someone other than

18060-501: The shareholder and tying executive pay, the stock price became intrinsically tied with success as critics note. One notable effect of this practice includes reduced investment. From 2003 to 2012, of the 449 firms in the S&;P 500 , 54% of earnings went to stock buyback and 37% to dividends. This leaves 9% of earnings to go elsewhere, a reduction from the previous rates of investment in past decades. Economists like Lenore Palladino point out

18200-435: The shareholder does not fit within the owner-entrepreneur role required by the neoclassical economic model. Adam Smith himself noted his belief that managed corporations were not viable due to this issue, stating "The directors of [joint stock] companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which

18340-400: The shareholder supremacy over structure, the ability is flimsy and hard to use. The few cases in which legal action can be taken is when a director is explicitly stealing. In spite of the reality of shareholder obligation and abilities, corporate America has convinced itself, according to legal critiques, that there is a legal duty to their shareholders. Shareholder value may be detrimental to

18480-710: The short term -- and mainstream -- interpretation of shareholder value. Stock buyback is criticized for its extractive nature which takes profit and uses it to make stocks look more profitable than they might be in the name of shareholder value. In 1982, the U.S. Securities and Exchange Commission ( SEC ) implemented Rule 10b-18 of the Securities Exchange Act , thus allowing for corporations to buy back stock under certain thresholds and circumstances. With low investigation and consequence rates for breaches, as well as loopholes, this opened up opportunity to legal stock price manipulation. With SV theory incentivizing

18620-411: The time that offered the perfect opportunity for professionals outside of firms to gain power and exert their influence in order to drastically change corporate strategy. The conflation of shareholder value maximization with profit maximization has been criticized by some economists and legal scholars. For example, Oliver Hart and Luigi Zingales argue that corporate directors have a duty to maximize

18760-476: The trend. By the early 1900s, trade press publications, advertising agencies , and advertising experts began producing books and pamphlets exhorting manufacturers to bypass retailers and to advertise directly to consumers with strongly branded messages. Around 1900, advertising guru James Walter Thompson published a housing advertisement explaining trademark advertising. This was an early commercial explanation of what scholars now recognize as modern branding and

18900-442: The wake of mass layoffs, corporations have to refill some of the positions now vacant. This leads to a longer term inefficiency as new employees must be trained and the resources invested into the original employee (provided they were not rehired) are permanently lost. A related criticism of shareholder value is the reliance on the process of assessing stock, which is itself vulnerable to manipulation and speculation . Speculating on

19040-400: The way in which consumers had started to develop relationships with their brands in a social/psychological/anthropological sense. Advertisers began to use motivational research and consumer research to gather insights into consumer purchasing. Strong branded campaigns for Chrysler and Exxon /Esso, using insights drawn from research into psychology and cultural anthropology , led to some of

19180-417: The world's oldest in continuous use. A characteristic feature of 19th-century mass-marketing was the widespread use of branding, originating with the advent of packaged goods . Industrialization moved the production of many household items, such as soap , from local communities to centralized factories . When shipping their items, the factories would literally brand their logo or company insignia on

19320-404: Was discontinued and the operation was renamed United Express following the merger of Continental Airlines with United Airlines in 2010. Brand name The practice of branding—in the original literal sense of marking by burning—is thought to have begun with the ancient Egyptians , who are known to have engaged in livestock branding and branded slaves as early as 2,700 BCE. Branding

19460-435: Was the brand name. With the rise of mass media in the early 20th century, companies adopted techniques that allowed their messages to stand out. Slogans , mascots , and jingles began to appear on radio in the 1920s and in early television in the 1930s . Soap manufacturers sponsored many of the earliest radio drama series, and the genre became known as soap opera . By the 1940s, manufacturers began to recognize

19600-444: Was used to differentiate one person's cattle from another's by means of a distinctive symbol burned into the animal's skin with a hot branding iron . If a person stole any of the cattle, anyone else who saw the symbol could deduce the actual owner. The term has been extended to mean a strategic personality for a product or company, so that "brand" now suggests the values and promises that a consumer may perceive and buy into. Over time,

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