A behavioural long-term based measure to monitor the health of a brand

In response to calls for marketing accountability and for evaluating the long-term brand building efforts, this research proposes a new behavioural long-term-oriented measure, called Brand Health Index (BHI) to monitor the health of a brand. Similar to the health of a person that cannot just be associated to what they have had for breakfast, the health of a brand should not be judged on a short-term basis. Long-term lagged impacts must also be considered. BHI is the first longitudinal measure that encompasses the long-term sales performance of a brand to measure its health. We provide managerial insights into effective brand management over the long-term. We conduct a longitudinal analysis from 2002 to 2011. Four industries, airlines, banking, department stores and insurance, are studied to improve the model's generalisability. We validate our BHI by correlating it to Interbrand's and Millward Brown's Brand Z measures of brand value. Using a Two-Way Cluster-Robust Error regression, we study the association between BHI and two financial measures. The findings suggest that the proposed measure is significantly positively correlated with ROA and EPS.