So how well do your friends know you?

Prof. Andrew Gershoff at the Ross School of business has just published some insightful research on how well our friends know our tastes in movies and restaurants. According to his research, acquaintances tend to know more about our preferences than close friends because friends tend to overestimate their knowledge. While recommendations made by friends based on their flawed understanding of our preferences could be off base, even in such cases, these recommendations could expose us to genres and cuisines that we would otherwise have avoided.

Prof. Gershoff taught the Marketing core course for my section and is a great teacher. I look forward to seeing the complete paper when it comes out in the Journal of Consumer Research.

New research on quantifying brand equity

While looking up the brand value of J&J for a class project, I came across this article in the Stanford GSB Knowledgebase about a newly developed model for quantifying brand equity. Prof. Srinivasan and his two collaborators have developed a mathematical model and a market research method that enables managers to calculate how much the company will earn if they invest in different kinds of branding activities.

Prof. Srinivasan and his collaborators first developed an operational definition for brand equity and identified its three sources – 1. Brand awareness, 2. Consumer perception, and 3. Cachet of owning a particular brand. The researchers then applied their model to the cellphone market in Korea and calculated that Samsung had earned $127MM per year from brand equity. Models such as these might finally help reveal what half of advertising really adds value.