Brand Building to Deter Entry and Its Impact on Brand Value

• 成果类型: Article
• 署名作者: Bar, Ron N.; Haviv, Avery
• 署名单位: University of Rochester
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4608
• 发表日期: 2023
• 页码: 5418-5438
• 关键词: brand equity; brand value; entry deterrence; empirical IO; dynamic games

摘要

Brand valuation methods traditionally focus on the value a brand generates via its ability to enhance demand and, accordingly, profitability. However, this paper explores how a brand can generate value for a firm through the ability to deter entry of new competitors. In this respect, we distinguish between a brand's direct effect on demand and its strategic effect on the behavior of rival firms. We investigate this within the context of the U.S. stacked chips category using a dynamic model that endogenizes brand building and entry decisions. We find that up to 63% of a brand's value can be derived from its ability to deter entry. Furthermore, we find that a brand is most valuable when the cost of entry that potential entrants face is moderate: neither too high nor too low.