Financial Information and Brand Value

1The Brand as a Source of Value Creation

The purpose of this first chapter is to define the concept of a brand and to describe its fundamental features. This chapter also deals with the value companies’ use of brands. We define the brand according to an economic perspective and also describe its evolution through the centuries; we will also establish the link between the market and the brand. We will see whether the use of brands creates value and whether the mechanics developed by economic theory are sufficient to ensure brand use. Brands have a limited lifespan, and we will assess whether the means of preserving brands are sufficient to ensure the maintenance of brand ownership.

1.1. The historical, legal and economic character of the concept of a brand

Before studying the contemporary nature of the concept of a brand, it is useful to consider the origin of brands. The brand is a perennial tool for trade. Whatever the reasons for the use of a brand, it has always been used to indicate an origin and a source. In the Middle Ages, craftsmen “marked” or “branded” their products in order to identify their production. It is therefore a simple transition from “branding” to “brand” (or, in the French, “marquage” or “marking” to “marque”), and thus legislators were able to take into account the property associated with brands.

The first laws that clarified brand ownership appeared in the 18th Century. Thus, these laws highlighted the rights of individuals and companies in terms of ...