Students and faculty gathered in the Executive Dining Room Tuesday to listen to business professors Yan Hu and Jeanny Liu discuss whether businesses being family owned benefits a company’s brand value.
Liu, professor of marketing, and Hu, associate professor of finance, gathered data in an attempt to find a correlation between the two and answer a couple hypotheses on the topic.
“We wanted to find out whether a family firm adds value to a brand… to find a marriage between marketing and finance by using data from both fields,” Liu said.
A family firm is defined as a firm that is at least 20% owned by the founder, Hu said.
Hu introduced two different hypotheses; one would examine how family ownership directly affects brand value, and another would look into if a business named after the family negatively or positively effects the brand value.
The hypotheses and studies were gathered from statistics of U.S. global firms, meaning 30% of a company’s operations happen outside of the United States.
Al Clark, professor of humanities, raised concern about what factors specifically determine a brand’s value, and how it is measured. He wanted to be certain this term had validity, or else he felt the statistics were irrelevant, he said.
Both Hu and Liu explained to Clark that brand value is an accumulation of qualities. Those qualities include the role of the brand, brand strength and the financial forecast.
“Brand value, really, is intangible,” Liu said. “It’s purpose is used to measure performance, as a whole.”
Ultimately, the findings revealed that firms with the founder as CEO positively affected the brand value. In contrast, family and family-named firms underperformed compared to others in brand value.
Hu said that family firms struggle with three main specific challenges: growth, debt and mergers.
“Wealth does not survive three generations due to successions. By the second generation, just 30% of a company is owned by a family member. The third year, a family member averages owning only 12%,” Liu said.
Jasmine Valadez, senior kinesiology major, found the topic particularly interesting because it addresses a potential career path she is considering.
“It was nice to learn some new information while on my lunch break,” Valadez said. “I have thought about opening a physical therapy business in the future and now I feel more prepared in regards to a marketing strategy.”
Savannah Dingman can be reached at firstname.lastname@example.org.