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Valuing brand equity of a geographic region

Brailsford, Tim , Dash, Stephen , Hutchinson, Marion R., Pappu, Ravi , & Ritchie, Brent W. (2009) Valuing brand equity of a geographic region. Tourism Analysis, 14(6), pp. 765-779.

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Abstract

There is much anecdotal evidence and academic argument that the location of a business influences its value. That is, some businesses appear to be worth more than others because of their location. This is particularly so in the tourism industry. Within the domain of the destination literature, many factors can be posited on why business valuation varies, ranging from access to markets, availability of labor, climate, and surrounding services. Given that business value is such a fundamental principle that underpins the viability of the tourist industry through its relationship with pricing, business acquisition, and investment, it is surprising that scant research has sought to quantify the relative premium associated with geographic locations. This study proposes a novel way in which to estimate geographic brand premium. Specifically, the approach translates valuation techniques from financial economics to quantify the incremental value derived from businesses operating in a particular geographic region, and produces a geographic brand premium. The article applies the technique to a well-known tourist destination in Australia, and the results are consistent with a positive value of brand equity in the key industries and are of a plausible order of magnitude. The article carries strong implications for business and tourism operators in terms of valuation, pricing, and investment, but more generally, the approach is potentially useful to local authorities and business associations when deciding how much resource and effort should be devoted to brand protection.

Impact and interest:

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ID Code: 32125
Item Type: Journal Article
Keywords: Brand valuation, Brand equity, Market-based valuation, Branding geographic regions
DOI: 10.3727/108354210X12645141401188
ISSN: 1083-5423
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BANKING FINANCE AND INVESTMENT (150200) > Finance (150201)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > TOURISM (150600) > Tourism Management (150603)
Copyright Owner: Copyright 2009 Cognizant Communication Corporation
Deposited On: 06 May 2010 08:43
Last Modified: 01 Mar 2012 00:12

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