Skip to main content
Evaluating the Financial Impact of Branding Using Trademarks: A Framework and Empirical Evidence
The Journal of Marketing (2009)
  • David Orozco, Michigan Technological University

The primary focus of this research is to offer a better understanding of these benefits. Specifically, the authors evaluate the financial value of branding by linking trademark registrations of firms with their financial performance. They broadly classify trademarks into two categories, brand-identification and brand-association trademarks, and propose that they are indicators of firms’ efforts to build consumer brand awareness and associations, respectively. Their examination of 22,060 trademark registrations made by 108 firms across multiple industries and over the 1995–2005 period confirms that efforts aimed to build brand awareness and associations among consumers have significant financial implications for firms. Overall, the authors observe that brand-association trademarks positively affect a firm’s cash flows, Tobin’s q, return on assets (ROA), and stock returns, as well as reduce the variability of future cash flows. Of particular significance is the observation that, on average, each additional brand-association trademark is associated with $7.8 million of future cash flows, a .05% increase in future ROA, and a .3% increase in the future stock returns of a firm. In addition, the authors’ findings confirm that by improving consumers’ awareness of brands and by protecting such efforts with brand-identification trademarks, firms enhance the future cash flows that brand associations generate. Together, their findings will assist marketing managers in more cogently communicating the financial value of branding to senior management. This becomes especially important during lean economic conditions, when firms may be inclined to make cuts in their brand-related investments. Furthermore, scholars have noted that marketing managers rarely work closely with the legal function of their firms. Therefore, marketers may not be aware of many categories of trademarks that have gained legal precedence only recently. The results of this study show the value potential of trademarks and should therefore motivate marketers to work more closely with their legal counsel. Relatedly, the research aims to motivate firms to review their trademark portfolios more closely to uncover unappreciated trademark opportunities and to benchmark against the best performers in their industries.

  • trademark,
  • marketing,
  • brand equity,
  • intellectual property
Publication Date
Winter November 1, 2009
Citation Information
David Orozco. "Evaluating the Financial Impact of Branding Using Trademarks: A Framework and Empirical Evidence" The Journal of Marketing Vol. 73 Iss. 6 (2009)
Available at: