Abstract:
This research focuses on the relationship between branding and company share price. This research’s purpose is to investigate the impact of branding indicators on a company share price. There has been a lot of research that has evidenced a positive relationship between marketing, of which its core component is branding, and firm performance.
Even though it has been evidenced that strong branding leads to firm performance, stock analysis literature has not taken into consideration branding indicators as a key component in predicting the future performance of a company’s share price. This research addresses insights on the direct relationships between branding and share price values, which has not been extensively studied.
Literature reviewed outlined three important measures of brands which offer a view of the future performance of a brand. These brand performance measurements are brand value, brand ranking and brand ratings. These are measures which are publicly available and have been measured over time. The research utilised data from Brandentity which is a brand valuing organisation which reports brand performance annually.
The research investigated the impact of the change in brand value, brand ranking and brand ratings on company share price. The investigation shows brand rating as the only brand indicator tested that significantly positively impacts a company share price. This was found to mainly be because its orientation is competitor’s performance and future brand performance. Brand value and Brand rankings were found to have no significant impact on a company share price.
The research thus concludes that brand indicators have a positive impact on a company share price and therefore brand measurements should be used as part of stock analysis to predict future performance of a company share price.
