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Accounting for brands: A comparative study of McDonald's and Burger King - Dissertation Example

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A firm has accounting and financial statements which are the information about the financial and accounting information of the firms.The accounting and financial statement of the firm provides the information about the performance in the financial position of a company…
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Accounting for brands: A comparative study of McDonalds and Burger King
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Accounting for Brands: A Comparative Case Study of McDonald’s and Burger King Table of Contents Introduction 2.Literature Review…………………………………………………………………2 2.1 Model and trends in Brand Valuation and accounting…………….…….2 2.2 Rules that govern the accounting of brands under different accounting standards…………………………………….…………………3 2.3 Study of accounting for brands for McDonald’s and Burger King……..4 2.4 How management for accounting of brands is done?.................................5 2.5 How does the Brand Value of each of two companies affect its share price performance and contrast between them?................8 2.6 How these companies account for brands in practices and what challenges they face in doing so?...................................................................9 2.7 Summary……………………………………………………………………13 3.Research Objective and Questions………………………………………………14 3.1 Research Objective……………………………………………………..14 3.2 Research Questions……………………………………………………..14 4.Research design and methodology………………………………………………15 4.1 Empirical Evidences……………………………………………………15 4.2 Research methods………………………………………………………16 5.References…………………………………………………………………………17 1. Introduction A firm or a company has accounting and financial statements which are the information about the financial and accounting information of the firms or the company .The accounting and financial statement of the firm provides the information which speaks about the performance and changes in the financial position of a company. This accounting and financial statements are useful to a wide range of users and helps in making economic decision. (Eipstein and Jermacowicz, 2007:9).But in today’s times, where the world has shrunk into a global village. In today’s times the firm has to make investments in the information technology (IT), research and development (R&D) as well as advertising. This has to be done so as to remain competitive and to make sure that the future growth and profitability is according to the plan and vision. Changes in dynamics of economy are making financial statement less value-relevant for investors and potential investors (Canibano et al, 2000). Hence the financial statements cannot be completely relied upon on the matter that requires decision. It is the utmost important to set some standards to ensure and improve the financial statements so that it will reflect the true economic value of the company. Intangible assets are the most controversial areas in the accounting standards. In financial statements the valuation and recognition of intangible assets have posed significant challenges. One of the most important intangible assets –Brands will be discussed in this study. Michael Eisner, Former CEO Disney, once said that “A brand is a living entity - and it is enriched or undermined cumulatively over time, the product of a thousand small gestures". Any symbol, word, tone that distinguishes and identifies one product or a group of products from other products is called a brand (Plasseraud, Plasseraud and Dehaut 1994). But brands are more than just the name or sign. In a broader sense brands are responsible for creating a unique image of the branded product or service. The brand speaks about the quality and attributes of the product or a company in the perception of the customers (Smith 1997, 38-44). In modern accounting systems and norms, goodwill must be allocated to the specific items that have created it. Brands are one of these. Hence, it can be said that the accounting for brands has come from the necessity to account for the huge goodwill payments (Kapferer, 2008). In the recent times the Effective strategic brand management is one of the major challenges to accountants. Brand Valuation of brand and the derivation of brand valuations are the major things that are dealt in the accounting of the brands. Hence, accounting of brands means including the valuations of brands in the balance sheet. 2. Literature Review The literature review first begins with understanding of the brands and the how the brands have become a very important aspect of today’s economy. It then explores accounting for brands and how companies account for brands in their balance sheet as means of increasing the value relevance of the balance sheet. The study employs McDonald’s and Burger King as case studies. These companies both operate in the restaurant industry. Examining these two companies is important because these two companies are renowned companies whose shares are actively traded. Providing information on how they account for brands will help investors who trade in their shares to gain more information about the companies and thus make better decision in their future trading. There is debate over including brands as assets in the balance sheet. The treating of brands as accounting assets originated in Australia where, due to corporate take-over and merger activities in 1980s, companies boosted their balance sheets by capitalizing on diverse ‘intangible’ assets as licences to operate television stations, newspaper titles and brands of beer (Goodwin and Harris, 1991). 2.1 Model and trends in Brand Valuation and accounting Brands are basically a customer mind-set dependent entity. It is measured by attributes such as awareness and attitudes. Customer mind-set measures are intangible in nature. There are many brand valuation models present. Young and Rubicam Brand Asset Valuator(Y&R BAV) is one of the very famous brand valuation models (Mizik and Jacobsom, 2008). Mizik and Jacobson (2008) provide evidence that the cross-section of stock returns significantly depends on brand relevance and brand energy. However, no significant relationship is observed between knowledge, esteem and the cross-section of stock returns. Esteem and knowledge indirectly affect stock returns through their direct effect on accounting measures. Financial Markets does not value differentiation but differentiation needs to be taken into account because it measures accounting performance of the company in future Accounting for brands is, however, a recent manifestation of fundamental conflicts in the nature and purpose of corporate accounts. While trying to resolve the brands issue, accountants must come closer to answering questions as to the essential nature of assets, the relative status of cost and value (Jones and Morgan, 1994). Different countries reacted differently to the problem of accounting for brands. In United States, accounting conventions made it difficult to show intangible as assets in company accounts, although now the inclusion of ‘soft’ assets on United States balances sheets (Cooper and Kaplan, 1989). British Companies were more logical in brand valuation and accounting and this was because of high level of corporate acquisition activity seen in United Kingdom in the 1980s and 1990s.A series of British companies in the 1980s had capitalized the acquired brands companies and in 1988 one large firm went even further and capitalized its own home-grown brands, and thus increasing the size of its balance sheet. Germany and Japan were resistant to the concept of brand capitalization (Jones and Morgan, 1994). In year 1997 Financial Reporting Statement (FRS) 10: Goodwill and Intangible Assets, was issued.FRS 10 pointed out that the companies need to analyze the brand values. It also said that the companies must include brands acquired in the course of a business combination among its stock of fixed assets at cost.(ASB, 1997).When dealing with the cost, the fair market value of the separable or individual brand. Any premium over the latter value is to be accounted for as an element of goodwill, with both amounts normally to be amortized over a period not exceeding twenty years. The FRS 11 : Impairment of Fixed Assets and Goodwill (ASB,1998) talked about the cases where the brands or other intangible assets do not lose value during the accounting period and how to deal with this and what should be done. Including the valuation for home grown brands remains the same and is proscribed on the grounds of a lack of reliability. Relational capital element of intellectual capital always talks about intangible assets such as brands, customer loyalty and the company reputation. This helps in providing the long term value creation for a business. The accounting for the stocks of intellectual capital is done by means of incremental asset valuation (Lynn, 1998). 2.2 Rules for accounting of brands under There are many accounting standards like International Financial Reporting Standards (IFRS), United States Generally Accepted Accounting Principles (U.S GAAP) and United Kingdom Generally Accepted Accounting Principles (U.K GAAP). Brand Accounting under IFRS is governed by the rules that govern the accounting for other intangible assets. These rules are enshrined in IAS 38 Intangible Assets. In addition, IAS 36 Impairment of Assets governs the impairment of intangible assets with an indefinite useful life.IAS 38 considers a brand to be an intangible asset with an indefinite useful life. Under IAS 38, such assets need to be recognised at fair value. Unlike other intangible assets, brands are not amortised. Companies are required to conduct an annual impairment review to determine whether the fair value of the brand is equal to the carrying value. If the carrying value is higher than the fair value, then the brand’s value is written down to fair value. In this case an impairment loss is recognised in the income statement for the period (Epstein and Jermakowick, 2007). The accounting of brands is subject to annual impairment. U.S GAAP rules (FAS 142) and U.K GAAP rules (FRS 10 and FRS 11) are quite similar to IAS 38. However, U.K GAAP and U.S GAAP are more restrictive in the manner in which they treat internally developed brands. While IFRS permits the recognition of internally developed brands when certain conditions are met, U.K and U.S GAAP do not permit the recognition of internally developed brands under any circumstances (Ong, 2001). U.S GAAP, IFRS and U.K GAAP differ from the French Plan Comptable Generale (PCG) in that under the French PCG; the brands that are internally generated are recognized in the balance sheet (Stolowy, Haller and Klockhaus, 2001). 2.3 How does management for accounting for brands is done? The key management accounting development is brand value budgeting. It basically includes brands in the budget (Guilding and Moorhouse, 1992). Brand value budgeting is the way of making managerial decision for allocating resources using brand value as a base. Brand value budgeting is done to enhance and support a brand position (Guilding et al., 2000). Guilding and Pike (1994) reported the findings of a questionnaire administered to 140 UK managers in their paper. The findings were pointing out for the greater support for visions associated with strategic management and long term plans rather than short term operational issues. Brand value accounting basically deals increasing the scope and purview of communication at the management account and marketing interface (Guilding and Pike, 1994). The first step consists of the assessment of brand strength then the profitability of brands is done. These all are done to preserve the accounting and finance functions. The determination of brand strength is done by scoring a brand on seven attributes (Cravens and Guilding, 1999). 1. Stability 2. Leadership 3. Protection 4. Internationality 5. Support 6. Trend 7. Market Brand income statements speak about the highly disaggregated information on the financial performance of. Costs that are incurred in selling particular branded offering are the factors that are dealt in the brand income statement (Pyne, 1984). Accounting based information is to integrate income/profitability information with investment expenditures. This integration helps to provide return on brand investment. A way to calculate this is to find out the residual income. Residual income has to be found out for the performance of a brand. After the appropriate income has been identified then a further charge is made and these charges are basically for the investment funds that are associated with these earnings (McTaggart et al, 1994). 2.4 Study of accounting for brands for McDonald’s and Burger King McDonald’s Corporation (NYSE:MCD) ranks first in world when it comes to largest chain of hamburger fast food restaurants. McDonald’s was founded in 1940. McDonalds has 32,737 restaurants spread over 117 countries at year-end 2010,out of these 32,737 around 26,338 were franchised or licensed (including 19,279 franchised to conventional franchisees, 3,485 licensed to developmental licensees and 3,574 licensed to foreign affiliates (affiliates)-primarily Japan) and 6,399 were operated by the Company.(McDonald’s Annual report 2010). Founded in 1954, BURGER KING ranks second in world when comes to fast food hamburger chain. The BURGER KING system operates more than 12,200 locations serving over 11 million guests daily in 76 countries and territories worldwide. Around 90% of Burger king restaurants are owned are operated by franchisees which are independent. In October 2010, 3G Capital purchased the Burger King Corp. 3G is a global investment firm focused on long-term value creation, with a particular emphasis on maximizing the potential of brands and businesses (Burger King Official Site). As both the companies have a global presence and operate in many countries. Their franchised or licensed outlet are scattered all over the world hence while accounting for these brands there are many factors that must be kept in mind. The operating costs for these companies will include the costs of the raw materials to produce building rentals, food items, income taxes and labour costs. But the magnitude of operations of both the companies in terms of volume as well as geography makes this information a challenge. For preparing year – end financial reports, the first step is to accumulate financial information from its various different owned and franchised restaurants throughout the world then summarize that information according to U.S accounting standards. The report thus made has to be made public. As daily number of transactions occur, the accounting for these brands would have become impossible if it were not for a systematic method for analyzing transaction. After analyzing the transactions are collected and recorded. This transformational process is referred to as the accounting cycle or the bookkeeping part of accounting. So the accounting cycle is a process for summarizing, recording, reporting and analyzing the business transactions (Albrecht, Stice, Stice and Swain, 2007) The steps involved in accounting cycles are Step 1. Analyze Transactions. Step 2. The effects of the transactions are recorded. Step 3. The effects of the transactions are then summarized. This summarizing includes preparing a trial balance and posting of journal entries. Step 4. Reports are prepared. These reports include preparing the financial statements, closing the books and adjusting the entries. While accounting information for these two companies the most difficult aspect of accounting is to determine the events which are to be recorded in the accounting records. Suppose For example, Burger King introduced a Big Mac clone at half the Big Mac price. This Big Mac clone could have a serious impact on the future of McDonald’s but the events that cannot be measured in monetary terms. Hence it will not be reflected in the financial statements because it would be not possible to find out the impact of Big Mac Clone on the future profitability of McDonald’s and hence this information will not be included. (Albrecht, Stice, Stice and Swain, 2007). 2.5 How the share price performance of two companies is being affected by the brand values of those companies and contrast between them? The main source of McDonald’s revenue is by operating its own restaurants and franchising to third parties. The initial capital is provided by franchises. This initial capital is required to build the restaurant and maintain it through reinvestment. The direct restaurant operation involves more capital-investment relative to franchising. This is the reason for lower restaurant margins as a percent of revenues. That is why now McDonald’s has been trying to shift focus toward franchises. One more source of McDonald’s revenue is from its sales by its company-operated restaurants. The fees from its franchise restaurants which include rent and royalties based on percent of sales again provide revenue. The company-owned restaurants are seen as a testing ground for product and pricing strategies and new marketing strategies. McDonald’s is focusing on with keeping up with demographics and rapid changing consumer preferences. McDonald’s also trying to increase its sales from the existing restaurants instead of opening new ones (McDonald’s Official Website). This table shows the breaks down of McDonald’s revenue by geographical segments in 2010.(26th February 2010) In this table APMEA means Asia Pacific/Middle East/Africa (Straittime.com, 2011). Burger King Holdings is the second largest hamburger fast food chain. When it comes to number of restaurants that are franchised, the Burger King is ahead than McDonald’s restaurants. But Burger King franchise revenues trail behind that of its competitor, mainly due to McDonald’s size advantage. In FY2010 Burger King posted $623.0 million, a decline of 1% year over year due to decline in comparable sales. Slowing economy recovery and high level of unemployment caused the decline.(Burger king Official website,2010.”Young Men’s” segment is largest contributor of Burger King’s revenue source; however this segment is sensitive to jobless claims. During the fourth reporting quarter the same trend was seen, the sales fell down by 0.7% . In US and Canada the decline was 1.5%. In FY2011 the strategy of Burger King includes the plans of opening new restaurants and around between 225 and 275 net new restaurants will be opened in FY2011 (Burger King Official Website, 2011). This graph shows 2007 Sales per Restaurant (USD Million). Burger King has the third highest sales (Straittime.com, 2011). 2.6 How these companies account for brands in practices and what challenges they face in doing so? Challenges faced by McDonald’s Financial reporting and accounting for McDonald’s looks at historical performance. It also gives importance to the primary responsibility of the Corporate Accounts department. The components responsible in order to achieve these are: 1. A centralized accounting centre is responsible for processing all payable transactions, accounts receivable, banking income and managing working capital. A centralized accounting centre is provides daily support to every McDonald’s restaurant. It also helps in maintaining the fixed asset registers. 2. The wages of the staff is handled by the payroll staff. 3. Tax law compliance is being done by the Treasury and tax experts and also takes cares that sufficient cash flow is maintained in the company with appropriate finance to meet the business needs (McDonald’s Official Site). The commercial Finance department uses management accounting to analyze past financial performance. This analysis is done in order to predict and improve the future results .The commercial financial departments also make commercial decision making. McDonald’s Business Strategy and Intelligence department specializes in external and internal data collection. This data is used to do the consumer research and finding out the trends of competitors. The Commercial Finance team also helps in measuring Key Performance Indicators which sets the achievement targets for McDonald’s. The Franchising Accounts team is that maintain information of all the profit they make through sales, paying royalty for trading under the brand name of McDonald’s and rent. The Franchising Accounts team works closely with franchisees. They try to provide the support, to grow their profitability (McDonald’s Official Site). An international presence gives McDonald's a huge leverage. It has been seen that the main portion of sales occur outside of the United States. In addition to developed markets like the U.K., Canada, South Korea and Australia, McDonald's operates in fast growing emerging markets like China, India, Russia and Eastern Europe. McDonald’s has tapped into a growing global middle class. China is a particularly promising opportunity for McDonald’s (McDonald’s Official Site). McDonald’s entered a lucrative coffee market but faces an ongoing bidding war against competitors.  In 2008, McCafe was introduced by McDonald’s at selected stores, at these stores customers can purchase Expressos and Cappuccinos priced at $2-4. This step of McDonald’s represents its foray into high-margin caffeinated beverage market, which is currently dominated by Starbucks (Beartlein, 2008). McDonald’s McCafe move has been a profitable, however this has resulted in “coffee war” amongst the food giants began a costly ad campaign in which MCD tried to orient customers away from Starbucks and to cheaper alternatives. This bidding war allowed small-time coffee chains such as Green Mountain Coffee Roasters (GMCR) and Caribou Coffee Company (CBOU) to steal market share as unique quality coffees, the very type of business model that Starbucks attempted to implement in the early days (Notte , 2010). Consumer are becoming more health conscious and hence are moving towards decrease the appeal of eating at McDonald’s hence McDonald’s menu must adapt to constant changes in consumer preference to insure profitability. Currently McDonald provides “mini-med” plans to its 29,500 hourly restaurant workers, due to concern over the required percentage of premiums to be spent on benefits (Adamy, 2010). How burger king accounting for brand in practice and challenges faced by it? Burger King is working on strategic levels to come out of downturns. John Dasburg the CEO and president of Burger King Corporation noted that the company's international business units would maintain their organizational structure and continue their long-term growth strategies. According to Dasburg in order to increase and enhance Burger King’s strategic assets the best organizational structure is one that is focused, functionally aligned and highly centralized. According to Dasburg Burger King have four strategic assets, which are as follows. • Exceptional brands • A differentiated and preferred burger, the "Whopper'' • Huge investment in equipment, kitchen design, equipments, culture. • The Burger King Franchise distribution system Burger King is growing its international presence with an emphasis on underpenetrated markets in developing countries, while scaling back its number of domestic franchises by closing underperforming restaurants. Burger King Dependency on agricultural commodities such as beef, corn, cheese and poultry has posed a challenge as prices of these commodities have increased drastically over past few years. Average size of a new Burger King Restaurant has been reduced to fight economic slowdown and face the downturn. Since drive-through sales contribute approximately 62% of, management has announced that larger restaurants aren't necessary. The building cost has been reduced by 25% by adopting smaller restaurant design which has helped Burger King in increasing efficiency and further cutting the costs (Burger King Official site). Burger King Faces a tough competition from McDonald’s hence Burger King must try new methods of promotions and take new innovative steps to face this competition. 2.6 Summary The companies that have global presence and have franchise which are spread all over the world needs to take into account a well planned strategy and plan to account for their brands as well as making their positions more strong and firm. The details about the share and stocks of the two companies were along with their related underlying policies were discussed. The comparative study of McDonald’s and Burger King reveals that the global presence, flexibility and positioning of McDonald’s gives it an edge over Burger King. McDonald’s is opening to new menus and areas which are helping it in expanding and Burger King needs to focus more on its menus and offers. 3. Research Objective and Questions 3.1 Research Objectives The research proposes to study and to determine the accounting for brands with the help of comparative study of McDonald’s and Burger King. This will be done by conducting thorough review of the annual reports of the two companies over the last 5 years. This will be done by reviewing literature on the area and studying the different rules provided by standards setters with regard to brand accounting. The research methodology included the analysis of secondary data along with the other gathered information from the official balance sheets and the financial statements. 3.2 Research Questions The above research objectives will be pursued by means of the following questions 1. What have been the trends and model in brand accounting and valuation? 2. What are the rules that govern the accounting for brands under different accounting standards? 3. How does management for accounting for brands is done? 4. How do McDonald and Burger King manage and account for their brands? 5. How does the Brand Value of each of two companies affect its share price performance and what is the contrast between them? 6. How these companies account for brands in practices and what challenges they face in doing so? 4. Reasearch Design and Methodology During the Research for following literature and topic involved empirical evidences along with collection of data and using qualitative, quantitative research along with case studies. 4.1 Empirical Evidences A lot of empirical studies have been conducted on the accounting for brands. The studies can be grouped under two main sub-heading: Studies that examine the accounting rules for brands (Karen and Guilding 2001) and Value relevance studies. Value relevance studies can be further divided into two categories: those that test the direct relationship between reported brand value and firm value (Seetharamaju, 2000) and those that employ advertising and R&D expenditures as measures of brand value. The second group of studies can be sub-divided into studies that have observed a positive relationship between brand value and stock price performance (Peterson and Jeong, 2010). The main focus is on the market valuation of firms and brand values. This is mainly done by examining the relationship between changes in the valuation of brands and stock price movements. Most studies have employed R&D and advertising expenditures. However, expenditure on advertising as well as on R&D efforts does not yield value all the time. 4.2 Research methods There are two common methods of undertaking research. These include quantitative and qualitative methods. Qualitative methods focus on analysis qualities and processes of case studies that cannot be examined experimentally or assigned quantitative measures such as amounts, intensity or frequency. On the contrary quantitative methods are more concerned with assigned situations in more mathematical way and analyzing the cause and effect relationships between the variables. The research methodology included the analysis of the secondary data as well as the inspection and interpretation of the official balance sheets and financial statements of the company. This study employs the case study approach to research. The two cases studies in this case are McDonald’s and Burger King. The sources basically used in this article are the secondary sources especially the annual reports of both the companies and their annual balance sheets. Using the information for these statements and the sheets the conclusions and the interference are drawn related to the topics. The online other sources are analyzed deeply to find out how the accounting of brands are done and the other necessary information. References 1. ASB (1997), FRS 10: Goodwill and Intangible Assets, Accounting Standards Board, London, 2. ASB (1998), FRS 11: Impairment of Fixed Assets and Goodwill, Accounting Standards Board, London,  3. Adamy, J., 30th September 2010, “McDonald’s may drop health plan”, Available at http://online.wsj.com/article/SB10001424052748703431604575522413101063070.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird , The Wall Street Journal, [Accessed: 23rd April, 2011]. 4. Albrecht, W. S., Stice, J. D., Stice, E. K., Swain, M. R. 2007 ,”Accounting Concepts and Applications”,USA:Cengage Learning 5. Baertlein, L., 17th September 2008,”McDonald’s owner’s eye Starbucks with McCafe drinks”, Available at http://www.reuters.com/article/2008/09/17/businesspro-mcdonalds-dc-idUSN1751849520080917 [Accessed: 22nd April 2011] 6. Burger King Official Site 2011, Available at http://www.bk.com/en/us/company-info/press/index.html [Accessed: 22nd April 2011] 7. Canibano, L., Gracia-Ayuso, M., Sanchez, P. 2000,”Accounting for intangible: A literature review” Journal for accounting literature, 19, 102-130 8. Cooper, R., Kaplan, R.S. 1991, "Profit priorities form activity-based costing", Harvard Business Review, Vol. 69 No.3, pp.130-5. 9. Cravens, K.S., Guilding, C. 1999, "Strategic brand valuation: a cross-functional perspective", Business Horizons, Vol. 42 No.4, pp.53-62. 10. Eipsten, J. B., Jermacowicz, E. K. 2007, “Interpretation and Application of International Financial Reporting Standard”, Wiley. 11. Goodwin, J. and Harris, K. 1991, “The intangible debate: some empirical evidence”, Australian Accounting Review November: 19-29. 12. Guilding, C., Pike, R. 1990, "Intangible marketing assets: a managerial accounting perspective", Accounting & Business Research, Vol. 21 pp.41-9. 13. Guilding, C., Moorhouse, M. 1992, "The case for brand value budgeting", in Drury, C. (Eds), Management Accounting Handbook, Butterworth-Heinemann, London, pp.172-95. 14. Guilding, C., Cravens, K.S., Tayles, M. 2000, "An international comparison of strategic management accounting practices”, Management Accounting Research, Vol. 11 No.1, pp.113-35 15. Jones, G., Morgan, N. 1994, “Adding value: brands and marketing in food and drink”, London Routledge 16. Kapferer, J. N. 2008, “New Strategic Management: Creating & Sustaining Brand Equity”, London Kogan Page Publishers. 17. Karen, S. C., Guilding, C. 2001, “Brand Value accounting: an international comparison of perceived managerial implications” Journal of International Accounting Auditing and Taxation, vol. 10, No. 2, pp 197-221 18. Lev, B. 2001, “Intangibles: Management, Measuring and Recording”. Washington, D.C. Brookings Institution Press. 19. Lynn, B. 1998, “The Management of Intellectual Capital: The Issues and the Practice”, Society of Management Accountants of Canada, Hamilton. 20. McDonald’s Annual Report 2010, Available at http://www.aboutmcdonalds.com/etc/medialib/aboutMcDonalds/investor_relations3.Par.56096.File.dat/2010%20Annual%20Report%20(print).pdf [Accessed: 22nd April 2011] 21. McTaggart, J.M., Kontes, P.W., Mankins, M.C. (1994), “The Value Imperative: Managing for Superior Shareholder Returns”, The Free Press, New York. 22. Mizik, N., Jacobson, R. 2008, “The Financial Value Impact of Perceptual Brand Attributes”, Journal of Marketing Research, vol. XLV, pp. 15-32. 23. Montrealgazette.com, 25th January 2011,”McDonald’s blames price hike on cost food”, Available at http://www.montrealgazette.com/news/todays-paper/McDonald+blames+price+hike+cost+food/4161140/story.html [Accessed: 22nd April 2011] 24. Notte, J., 14th September 2010,”Neither Starbucks, McDonald’s Win Coffee War”, Available at http://www.thestreet.com/story/10859465/2/neither-starbucks-mcdonalds-win-coffee-war.html [Accessed: 22nd April 2011] 25. Ong, A.(2001), “Change in Brand Accounting for U.K Companies” Brand Management, vol.9, No.2, pp.116-126 26. Peterson, R.A., Jeong, J. 2010, “Exploring the impact of Advertising and R&D Expenditures on corporate brand value and firm level financial performance”, Journal of Academy of Marketing Science, Springer 27. Plasseraud, Y., Plasseraud, C. and Dehaut, M. 1994. “Marques - Creation, Valorisation, Protection”. Paris, Editions Francis Lefebvre, Collection Dossiers pratiques. 28. Pyne, F.G. (1984), "Better operating statements for the marketing director", Accountancy, Vol. 95 pp.87-90. 29. Seethamraju, C. 2000, “The value-relevance of Trademarks “, Working Paper New York University 30. Smith, G. V. 1997. “Trademark Valuation”. New York, Chichester et al 31. Spain, W., 24th January 2011,” McDonald’s Quarterly profit rises 2%-Fast-food giant’s revenue tops $6 billion, matching Wall Street target”, Available at http://www.marketwatch.com/story/mcdonalds-quarterly-profit-rises-2-2011-01-24?reflink=MW_news_stmp [Accessed: 22nd April 2011] 32. Stolowy, H., Haller, A., Klockhaus, V. 2001,”Accounting for brand in France and Germany compared with IAS 38 (intangible assets): An illustration of the difficulty of international harmonization” The International Journal of Accounting, vol. 36, Issue 2, Pages 147-167. 33. The Straits Times, 25th January 2011,”McDonald’s likely to raise prices in 2011”, Available at http://www.straitstimes.com/BreakingNews/World/Story/STIStory_628013.html [Accessed: 22nd April 2011] 34. Thomson, I., Helm, H. October 22nd 2010,”McDonald’s Profit Rises 10%”, Available at http://www.bloomberg.com/news/2010-10-21/mcdonald-s-profit-rises-10-as-customers-snap-up-smoothies.html [Accessed: 22nd April 2011] Read More
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In spite of the rising costs of energy and fuel, mcdonald's and burger king managed to adjust to an energy crisis and by the middle of the seventies, they had started implementing new marketing strategy-wide expansion in the regional market.... Both McDonalds and burger king implemented almost identical marketing strategy-they reduced the sizes of their restaurants.... The objective of the following study "Fast Food Market: A Comparison of burger king and McDonald's" is to provide a retrospective look at the business rivalry between two major market competitors in the sphere of fast food: burger king and McDonald's....
15 Pages (3750 words) Case Study

Burger King Beefs Up Global Operations

Today, burger king seconds Yum Brands in fast food hamburger restaurant market (Shimp, 2007).... burger king's core competency lies in the unique method it uses to cook hamburger.... burger king cooks using flame- broiled method, different from grills that fry.... burger king started in 1954 as InstaBurger King.... The name changed to burger king in 1959 when it started domestic franchising.... hellip; The chains were larger than burger at the point of start in 1954....
4 Pages (1000 words) Case Study

The Marketing Mix of Burger King Company

The paper "The Marketing Mix of burger king Company" describes that the company can manipulate the marketing mix as regards its current positioning.... hellip; burger king must check its strategy first if it is supportive of its objectives before it can decide to change the marketing mix.... The scope of this business report is to describe the marketing mix of the company burger king from primary and secondary resources in order to make an accurate analysis for their marketing planning process....
10 Pages (2500 words) Case Study

Rebranding of Burger King

"Rebranding of burger king" paper states that changing demographics and health consciousness especially in the developed market offer more than enough reason to rebrand.... It was founded in Florida in 1953 as Insta-burger king, but it ran into bankruptcy in 1954 and it was bought out by James McLamore and David Edgerton who rebranded it as burger king.... urger king, founded in Miami the state of Florida, the U.... Together with Berkshire Hathaway, a partner, they even initiated a merger with Tim Hortons, a chain of doughnut outlets based in Canada, targeting the coffee and breakfast lovers, as Tim Hortons sought to take advantage of burger's international network....
9 Pages (2250 words) Case Study

A Global Brand Assessment of McDonalds

The author of the paper "A Global Brand Assessment of mcdonald's" states that McDonald's global branding is being impacted by its foreign operations more than McDonald's is impacting them.... In reviewing and assessing the above, the branding strategy of mcdonald's will be compared against literature information on global branding along with the societal impact of the company's branding strategy.... hellip; As an international product that is the industry leader in the fast-food segment, mcdonald's has been under pressure to get its global branding strategies correct from the start....
10 Pages (2500 words) Case Study
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