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Analysis of the Ecuadorian government's proposed methodology of brand valuation: application in agricultural sector brands

Abstract:

Purpose: The purpose of this work is to analyze a brand valuation methodology proposed by the current Ecuadorian National Service for Intellectual Rights, assessing the relevance of the proposed marketing variables: awareness, associations and evaluation of purchase determinants, and their relationship within the proposed methodology. Design/methodology/approach: The authors used data from surveys of 482 consumers of two agricultural brands in Ecuador (supplies, equipment and services). The authors applied linear multiple regressions estimated by generalized least squares with heteroskedasticity-robust standard errors. “Intention to repurchase” and “recommend” the brands were selected as dependent variables due to their relationship with brand value. Findings: Brand awareness and associations positively influence the two dependent variables. However, the interaction between brand awareness and associations is negative, suggesting that, for the upper level of awareness, associations have no effect over intentions. This result holds for both brands. Brand evaluation of purchase determinants was a significant pbkp_redictor of intentions only for the brand which belongs to a product category in which the purchase decision process is more extensive and with more effort. Research limitations/implications: This study is focused only on agricultural brands, which limits the generalization of the findings. Originality/value: The agricultural sector is very important in Ecuador due to its contribution to GDP and employment, and the country's position as the fifth exporter of bananas worldwide. Understanding consumer behavior is important for brands and firms' managers in order to preserve or increase brand value, for which a reliable valuation model is useful.