Brand equity evaluation and corporate performances measurementAn empirical analysis on the value creation process into Piedmont luxury context

Interest in performance measurement and management has rocketed during the last few decades. The need for good performance measurement system is an ongoing issue which should be addressed by the management of all organisations. Performance measurement system is a set of metrics used to quantify both the efficiency and effectiveness of firm actions (Neely et al., 1995). According to several authors, there are a number of models of performance measurement which can be used by management, as the classical economic and financial indicators from the financial statement, the Balanced Scorecard (Kaplan; Norton, 1992), the Critical Success Factors and the Key Success Factors (Taguchi; Kaneko; Tabe, 2009), the Tableau de bord (Moisson, 1983), the Performance Pyramid (Lynch; Cross, 1991), and the Performance Prism (Neely, 2002). One of the most important issue for companies is to balance the economic and financial logic as the basis for performance measurement with non-financial indicators, related to intangible assets, including both external and internal measures, short-term as well as long-term indicators. Moreover, if companies use an advanced balanced performance measurement system (Berry; Broadbent; Otley, 1995), considering some risks connected to the market and the company itself (Kaplan, 2010), they will absolutely be able to have some benefits, from a greater understanding of the processes within the organisation to the facilitation of comparisons of performance between different companies. To better understand how the balanced performance measurement system works into a real competitive market, we have conducted an empirical analysis regarding to Piedmont luxury firms, which is intended to answer three main questions: - How do Piedmont luxury companies measure their performances? - Is it true that only the companies which adopt an advanced balanced performance measurement system - including intangibles measures - really perform better than the other competitors? - How do Piedmont luxury firms evaluate the value creation process connected to what is called brand equity (Aaker, 1997)? And what about the other intangible assets? We have tried to study the link between the performances (also in terms of brand equity) of these companies and their adopted performance measurement system, focusing on the facts that: -the most of these firms are family-based companies which have not previously operated within a balanced performance-focused culture (Hay Group, 2010); -since the luxury market is always under the “low-cost” threat and is an over-competitive market, the players have to reach and maintain the excellence, the high brand equity and quality with innovation and differentiation, trying to find out the way to drive down costs (Mosca, 2010). There is no doubt that the recession, the higher competition, the stronger need to innovate, differentiate and improve the performances should lead these kind of firms to better measure themselves and to adopt more innovative ways of measuring the performances, focusing steadily on the brand equity, which should represent the key factor for every luxury firm (Ferraresi, 2002; Mosca, 2010). According to our approach, it would be useful to measure four perspectives connected to the brand and its values: the financial and economic measures from the financial statement, the external customers (Driesener and Romaniuk, 2006; Keller, 1993), the employees, which can be defined as “internal customers” (Casalegno, 2008; Mitchell, 2002) and the brand itself. Luxury companies should measure all the four variables in order to create value. In this sense, the use of a balanced performance measurement system is important to know where to improve, where to allocate or re-allocate money and people, how the firm can compare itself with the others, whether the company is improving or declining, whether or which some of company programs, methods or employees are producing results that are cost-effective and efficient, how consumers perceive the brand, what is the equity of the brand and how the company creates value. The aim of our study is to analyze what is happening into Piedmont luxury context and the paper is structured as follows. The first part describes the main features of luxury market in terms of definitions, peculiarities of luxury goods, range of products identifying the concept of luxury and the market structure. The second one gives an overview on the traditional performance measurement methods usually used to evaluate the economic and financial results, underlining the importance of intangible assets to better create value in our considered context. Eventually, the third section presents the key findings of our empirical research – on the Apparel, Jewellery and other most representative Piedmont luxury categories – describing the sample, our research design and the main implications of the study.