The document analyzes brand efficiency between developed and emerging countries using data envelopment analysis (DEA). DEA models including CRS, VRS, FDH, and FRH are used to evaluate brands from the US, China, India, Germany, Japan, and the UK. The analysis finds some globally high-ranking brands are inefficient in their use of advertising costs, while lesser known brands are relatively efficient. The study provides a framework to compare brand efficiency across technologies and economies.
Inefficiency means spending too much on advertisement when other firms achieve what you do with less resources.
FCB and APL are VRS, FDH, and FRH efficient.
MLB, MCD, and VIS are FDH and FRH efficient, but not VRS efficient.
HDF, BDU, ABB, and TNC are FDH efficient.
IBM and Visa have same output level, however, still IBM can reduce 5.2% of advertising cost without affecting its efficiency level.
HDF, BDU, and ABB are FRH efficient.
HDF, BDU, and TNC are VRS efficient.
HDF, BDU, ABB, and TNC are VRS and FDH efficient.
TNC is not FRH efficient, but HDFC, BDU and ABB are.
E6, E4, D11, D10, D9, D5, D1 are FDH efficient.
D10 is a peer for E1 [reduce input].
D10 is a peer for E2, D13, and D15 [increase output].
E6, E4, D11, D10, and D9 are FRH efficient.
E6 is the peer for E7 and E8 [Reduce Input].
E4 is the peer for E7 and E8 [Increase output].
E6, E4, D11, D1 are VRS efficient.
E4, E6, D11, and D1 are FRH, FDH, and VRS efficient.
D10 is FRH and FDH efficient.
D9 is FRH efficient, but not VRS or FDH efficient, while D5 is FDH efficient, but not VRS or FRH efficient.
Two frontiers: one for developed and another one for emerging countries.
Note: LIKE D15, D13, D12, D14, … brands from developed countries are inefficient even under the emerging countries frontier….
E6 and E4 are far better off when compared to the developed countries frontier….
Effectiveness is measured as the log(net utilities/advertising costs).
Efficiency is measured as in VRS efficiency.
50% of the sample are enjoying their higher profit with higher brand value.