Topic_09_E1 - to a particular product 2 Describe how it is...

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Topic 9, Exercise 1 The article entitled, “New Brand Day,” describes how financial techniques used to evaluate investments are being applied to marketing and advertising expenditures. After reading this article, answer the following questions: 1. Describe the problems experienced by a finance person when attempting to evaluate advertising expenditures. The finance function has difficulty evaluating advertising expenditures because of the challenge of measuring the impact of the expenditures. Other types of investments allow more direct tracking of the cash flows from the investment. The returns or cash flows related to advertising are more difficult to assess and tie
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Unformatted text preview: to a particular product. 2. Describe how it is suggested that a company establish a value for its brand. To estimate a value for a brand, Don Shultz, a marketing professor at Northwestern University, suggests the used of a discounted cash flow model. To estimate the value of the brand, he estimates total sales for the brand into the future using historical cost and growth estimates. He then calculates various charges against the brand to cover internal costs and identifies a brand contribution. This contribution is used in a discounted cash flow model to estimate the value of a brand....
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This note was uploaded on 09/13/2011 for the course FIN 6301 taught by Professor El-asmawanti during the Fall '09 term at University of Texas at Dallas, Richardson.

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