Academic journal article IUP Journal of Brand Management

The Brand Value of FM Channels in Indore: A Comparative Analysis

Academic journal article IUP Journal of Brand Management

The Brand Value of FM Channels in Indore: A Comparative Analysis

Article excerpt

Radio was one of the popular media in the 1980s and 1990s, but with the advent of television and other media like Internet, it lost its shine. But now it is back in action because of the availability of radio in mobile and automobiles. The revival of radio began around year 2000, and today it has a huge presence in big cities. The amount of money that an FM radio channel can charge its clients for hosting an advertisement largely depends on the brand value of the FM radio station. This paper attempts to carry out a comparative brand value analysis of different FM radio channels with special reference to Indore.


Tangible assets like land, buildings and financial assets have always been regarded as the main source of business value. But in today's world, a company's value is not made up of its tangibles alone. The importance of intangibles like brand name, patents, technology and employees is being recognized in the market and this has led to a dramatic shift in the market value of some companies relative to their book value. Brand is rarely explicitly and adequately valued and it seldom appears on financial statements. The concept of brand equity has been the area of discussion in marketing literature (Farquhar, 1990). According to Keller (1990) and Ailawadi et al. (2003), a detailed knowledge of brand equity is helpful to the company, its stakeholders and customers. According to Agarwal and Rao (1996) and Keller and Lehmann (2006), if a company has a high brand equity, it is clearly reflected in the market share of the company. The value of the shareholders is also directly proportional to the value of the brand, i.e., its brand equity (Kerin and Sethuraman, 1998). As stated by Erdem and Swait (1998), customers also benefit by associating themselves with a strong brand as there is lower information search cost and lower perceived risk associated by investing in those brands which have a strong goodwill and brand strength. According to Keller (2008), established brands can command a price premium for their products and also there is lower price elasticity for their products, as the trust which the customers have in the brand acts as a deterrent against switching over to the competitor brands because of increase in price. Doyle (2008) studied the market to book ratio of four of the Fortune 500 companies. His study revealed that 75% of the assets of these four companies were intangible and were linked to what the customers perceived about these companies. Studies carried out by researchers revealed that since brand equity forms an important parameter to analyze the success of a brand, there should be periodical monitoring of the same so that the brand managers understand the reasons behind the success and failure of brands over a period of time (Sriram et al., 2007). Aaker and Joachimsthaler (2000) had also emphasized on the need to develop some framework to measure the tangible and intangible aspects of brand equity.

Brand Asset Valuator Model was developed by Young and Rubicam (1980) to track the brand health of various organizations. According to Young and Rubicam (1980), the brand value of a company depends on four parameters: brand differentiation, brand relevance, brand knowledge, and brand esteem (Figure 1). The movement of these parameters explains why brands grow, how they can get sick and how they can be managed back to health.


Also known as distinctiveness of a brand, differentiation is the critical aspect of a brand's success. It defines how a brand is distinguished from all other brands. Differentiation is a very important element for brand development.


If a brand is not relevant to the consumers, it does not attract and retain them. Differentiation can indulge a consumer, but without relevance, it does not have connection to one's own life, and a consumer will not engage in continuous buying. Successful brands should be able to differentiate themselves in the marketplace and at the same time be relevant to the target consumers. …

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