| Brand value, or brand equity, is well recognized as an important asset of a firm. Brand value is generally measured through the market-related approach or the consumer-related approach, although the market-related approach is traditionally applied only to the brand value estimation of branded versus nonbranded products. This paper attempts to extend the market-related approach to areas such as the automobile market, where no nonbranded products exist.;Our approach is based on the existence of a secondary market for cars in the form of the car dealership system. This arrangement means that there are two prices for automobiles, the invoice price and the manufacturer suggested retail price (MSRP). The inverse demand function approach is applied to that part of the MSRP directly associated with the secondary market. In the adjusted form, the inverse demand function involves two types of variables: the competitive brand value (CBV) and consumer value (CCV). This paper models the consumer value variable via clusters of CCV equivalent cars that can be identified using the data provided by experts on the competition for each of the new car models on the market. If these clusters are found, the estimation of the competitive brand values can be made for brands present in other CCV equivalent clusters.;Our model has been validated for the passenger car market segment, thus allowing estimation of the relative competitive brand value of eleven major brands. The results suggest possible ways to improve the process of categorizing car models, and have implications for production, price management, and consumer choice.;By modeling the inverse demand function based on CCV and CBV, this paper extends Sullivan's (1988) approach to include car models beyond twin cars. Additionally, the results indirectly confirm Sullivan's (1988) finding on the relative importance of parent brand (e.g., Toyota) over specific brand (e.g., Corolla). |
