Desiree Miltenburg Brand Management
International Business Economics Summary 2018
CH 4: Economic Approach
Assumptions Theory
1. Brand can be controlled and managed by the company 1. Transaction cost theory
→ If company gets marketing mix right, brand strong and successful (4 P’s) • Consumer behavior does not always display utility maximizing
2. Consumers are +/- passive receivers of marketing messages, and behavior
perceive/evaluate them rationally (Economic man) o Don’t have perfect information and accessibility to all
→ Consumers always make best rational decision possible choices available
o Not able to make rational choices
Assumptions result from: • Transaction costs are barriers to utility maximization
(1) Microeconomics o Goal in this approach: eliminate transaction costs
• Invisible hand: Allocates resources such that optimizes both ind. and soc. o By providing right information about product through 4P
(2) Economic man 2. Four P’s
• Assumptions: • Assumption: able to control consumers brand choice by
o Human behavior is guided by rational parameters ensuring an optimum mix between the Four P’s
o Humans maximize own satisfaction and strive for max utility • Product: Satisfy a functional demand
o Humans have perfect information about alternatives • Price: Total cost of manufacturing, distributing, and advertise
o Exchange between two parties is an isolated event • Place: Make goods available in right quantities at right loc.
o Consumers have limited income: Ensure to get the most out of it • Promotion:
• Consumers go for the deal that optimizes utility compared with price o Signaling theory: What most efficient to reveal
• Consumers can oversee all available choices and choose rationally unobserved product qualities of a brand?
(3) Brand-consumer exchange and transaction theory 3. Marketing mix
• It is equally important to: • Purpose: to produce/promote/distribute goods that are
o Supply the best deal attractive to consumers because they deliver the best deal
o Minimize transaction costs (search, purchase, consumption) measured by utility, compared with the utility of competitors,
• Relationship of company with market focusses on price, demand, supply related to the price consumers are willing to pay
• Key instrument for understanding and facilitating transactions
between company and market
Support:
Support:
Transaction
Four P's
cost theory
Core:
Marketing
mix
Methods and data Managerial implications
1. Data collection 1. Primary focus:
• Gather data to identify the exact marketing mix that will deliver optimal Eliminate barriers to exchange, facilitate next transaction
brand performance 2. Marketing mix is the best toolkit
o Mostly quantitative 3. ST focus resulting from the marketing mix as primary tool
o Analyzed by micro-economic techniques 4. Exchange between brand and consumer is an isolated event
→ Focus: Effects of marketing on demand 5. Different to catch sight of brand-building qualities
2. Methods 6. Push approach to the marketing of brands
• Objective: to investigate how changing marketing mix will affect br. choice 7. Marketer is concerned with “hooking new clients” and sales figures
• Output and managerially oriented 8. Model is purely theoretical rather than empirical
• Mathematical models 9. Criticized for not portraying the world of consumption adequately
3. Data analysis How the approach (not) deals with consumers
• Large quantities 10. Individual preferences violate utility theory
• Replicable and representative
• Objective
• Regression analysis
• Difficult to understand why variables are correlated
• Based on positivist research ideal
, Desiree Miltenburg Brand Management
International Business Economics Summary 2018
CH 5: Identity approach
Assumptions Theory
1. Focus on creation of a unified, visual, and behavioral identity Brand identity
2. Consumers attribute identity characteristics to companies • Made up of four components:
3. People form images of companies based on the total experience of (1) Corporate identity
the company Created/maintained internally
(2) Organizational identity
→ Places company and employees at center of brand equity (3) Corporate image
creation (4) Reputation Created/maintained externally
Results from: 1. Corporate identity
(1) Identity perspective • Exchange between brand and stakeholder from a visual/strategic pov
• Assumption: • Focus on: Creation of visual coherent identity with internal
All marketing and communication activities should be • Key determinant of success: Ability to control all communication
integrated/aligned/elevated from a product-focused and tactical • Aim: Create an enduring/distictive/stable brand identity linearly to all
level, to corporate, strategic level. stakeholders
• Identity is something initiated from inside the company • Two perspectives on how to create an manage corporate identity:
(2) From product to corporate branding (1) Visual perspective: outward signs of inward, logo/name/col.
• More integrated relationships between internal and external (2) Strategic perspective: Strategic vision
stakeholders linking to top 2. Organizational identity
management/employees/customers/other stakeholders • Behavioral and cultural aspects affecting brand identity
• One unified message across all functions will elevate brand • Key concepts: org. behavior, culture, structure
management • Originates from the idea that people base their evaluations on total
• LT brand idea experience of a company
(3) Brand-consumer exchange • Employees deliver content/promise in LR → image and reputation
• In this approach, key determinants of brand choice are image and = “Living the brand”
reputation 3. Corporate image
• Expanded to a focus on all potential stakeholders, not only • Aim: project a single image to all stakeholders (consistent perc.)
consumers • Mosaic of brand associations held by stakeholders projected by c.
• Short term
4. Reputation
• Opposite to image (static/visual → dynamic/complex/social)
• LT gathering of impressions/evaluations of image stored in LT memory
of stakeholders
• Used externally: Measure customer evaluations
• Used internally: Guide employee behavior
• More effective when communicated by independent 3rd party
• Frameworks:
(1) Corporate brand toolkit: vision, culture, image
(2) AC4ID:
Actual/Commun./Conceived/Cultural/Covenant/Ideal/Desired
Supporting: Supporting:
Organizatio Corporate
nal identity identity
Core:
Brand
identity
Supporting: Supporting:
Image Reputation
Methods and data Managerial implications
Methods vary depending on the supporting theme to be studied: 1. Building and managing brand identity is a complex management task
1. Corporate identity 2. Align vision and culture in practice
• Data about how visual expression has evolved over time • Observe and analyze interplay between the four subthemes
• Historical sources/Brand records/Interviews/Storytelling/Heurist. • If not all work to achieve the same goal: difficult to build identity
2. Organizational identity 3. Detect identity gaps (between image and vision/culture)
• Qualitative interviews • Occur if employees don’t deliver on the brand promise
• If not enough: interaction/immersion with culture to interpret • Effective, continuous interaction/communication with StH required
• Three perspective approach: 4. Align identity gaps
(1) Integration perspective: Consensus and consistency • Five cyclical steps:
(2) Differentiation perspective: Subcultures within org. (1) Stating: State vision/identity
(3) Fragmentation perspective: Multitude views (2) Organizing: Link with culture and image practices
3. Corporate image and reputation (3) Involving: Involve StH and employees
• Surveys and laddering techniques, cognitive/social psychology (4) Integrating: Align identities across internal functions
• Key elements to be studied: (5) Monitoring: Track gaps and performance
(1) Perception: Meaning creation 5. Challenges when building brand equity
(2) Cognition: Mental images ensuring recognition • Objectives must be clearly defined and results measured against it
(3) Attitudes: General evaluations • Consider whether org. structure suits aim of brand identity
• Image: Result of ST efforts • Ensure daily involvement and comitment
• Reputation: LT evaluation of brand actions
International Business Economics Summary 2018
CH 4: Economic Approach
Assumptions Theory
1. Brand can be controlled and managed by the company 1. Transaction cost theory
→ If company gets marketing mix right, brand strong and successful (4 P’s) • Consumer behavior does not always display utility maximizing
2. Consumers are +/- passive receivers of marketing messages, and behavior
perceive/evaluate them rationally (Economic man) o Don’t have perfect information and accessibility to all
→ Consumers always make best rational decision possible choices available
o Not able to make rational choices
Assumptions result from: • Transaction costs are barriers to utility maximization
(1) Microeconomics o Goal in this approach: eliminate transaction costs
• Invisible hand: Allocates resources such that optimizes both ind. and soc. o By providing right information about product through 4P
(2) Economic man 2. Four P’s
• Assumptions: • Assumption: able to control consumers brand choice by
o Human behavior is guided by rational parameters ensuring an optimum mix between the Four P’s
o Humans maximize own satisfaction and strive for max utility • Product: Satisfy a functional demand
o Humans have perfect information about alternatives • Price: Total cost of manufacturing, distributing, and advertise
o Exchange between two parties is an isolated event • Place: Make goods available in right quantities at right loc.
o Consumers have limited income: Ensure to get the most out of it • Promotion:
• Consumers go for the deal that optimizes utility compared with price o Signaling theory: What most efficient to reveal
• Consumers can oversee all available choices and choose rationally unobserved product qualities of a brand?
(3) Brand-consumer exchange and transaction theory 3. Marketing mix
• It is equally important to: • Purpose: to produce/promote/distribute goods that are
o Supply the best deal attractive to consumers because they deliver the best deal
o Minimize transaction costs (search, purchase, consumption) measured by utility, compared with the utility of competitors,
• Relationship of company with market focusses on price, demand, supply related to the price consumers are willing to pay
• Key instrument for understanding and facilitating transactions
between company and market
Support:
Support:
Transaction
Four P's
cost theory
Core:
Marketing
mix
Methods and data Managerial implications
1. Data collection 1. Primary focus:
• Gather data to identify the exact marketing mix that will deliver optimal Eliminate barriers to exchange, facilitate next transaction
brand performance 2. Marketing mix is the best toolkit
o Mostly quantitative 3. ST focus resulting from the marketing mix as primary tool
o Analyzed by micro-economic techniques 4. Exchange between brand and consumer is an isolated event
→ Focus: Effects of marketing on demand 5. Different to catch sight of brand-building qualities
2. Methods 6. Push approach to the marketing of brands
• Objective: to investigate how changing marketing mix will affect br. choice 7. Marketer is concerned with “hooking new clients” and sales figures
• Output and managerially oriented 8. Model is purely theoretical rather than empirical
• Mathematical models 9. Criticized for not portraying the world of consumption adequately
3. Data analysis How the approach (not) deals with consumers
• Large quantities 10. Individual preferences violate utility theory
• Replicable and representative
• Objective
• Regression analysis
• Difficult to understand why variables are correlated
• Based on positivist research ideal
, Desiree Miltenburg Brand Management
International Business Economics Summary 2018
CH 5: Identity approach
Assumptions Theory
1. Focus on creation of a unified, visual, and behavioral identity Brand identity
2. Consumers attribute identity characteristics to companies • Made up of four components:
3. People form images of companies based on the total experience of (1) Corporate identity
the company Created/maintained internally
(2) Organizational identity
→ Places company and employees at center of brand equity (3) Corporate image
creation (4) Reputation Created/maintained externally
Results from: 1. Corporate identity
(1) Identity perspective • Exchange between brand and stakeholder from a visual/strategic pov
• Assumption: • Focus on: Creation of visual coherent identity with internal
All marketing and communication activities should be • Key determinant of success: Ability to control all communication
integrated/aligned/elevated from a product-focused and tactical • Aim: Create an enduring/distictive/stable brand identity linearly to all
level, to corporate, strategic level. stakeholders
• Identity is something initiated from inside the company • Two perspectives on how to create an manage corporate identity:
(2) From product to corporate branding (1) Visual perspective: outward signs of inward, logo/name/col.
• More integrated relationships between internal and external (2) Strategic perspective: Strategic vision
stakeholders linking to top 2. Organizational identity
management/employees/customers/other stakeholders • Behavioral and cultural aspects affecting brand identity
• One unified message across all functions will elevate brand • Key concepts: org. behavior, culture, structure
management • Originates from the idea that people base their evaluations on total
• LT brand idea experience of a company
(3) Brand-consumer exchange • Employees deliver content/promise in LR → image and reputation
• In this approach, key determinants of brand choice are image and = “Living the brand”
reputation 3. Corporate image
• Expanded to a focus on all potential stakeholders, not only • Aim: project a single image to all stakeholders (consistent perc.)
consumers • Mosaic of brand associations held by stakeholders projected by c.
• Short term
4. Reputation
• Opposite to image (static/visual → dynamic/complex/social)
• LT gathering of impressions/evaluations of image stored in LT memory
of stakeholders
• Used externally: Measure customer evaluations
• Used internally: Guide employee behavior
• More effective when communicated by independent 3rd party
• Frameworks:
(1) Corporate brand toolkit: vision, culture, image
(2) AC4ID:
Actual/Commun./Conceived/Cultural/Covenant/Ideal/Desired
Supporting: Supporting:
Organizatio Corporate
nal identity identity
Core:
Brand
identity
Supporting: Supporting:
Image Reputation
Methods and data Managerial implications
Methods vary depending on the supporting theme to be studied: 1. Building and managing brand identity is a complex management task
1. Corporate identity 2. Align vision and culture in practice
• Data about how visual expression has evolved over time • Observe and analyze interplay between the four subthemes
• Historical sources/Brand records/Interviews/Storytelling/Heurist. • If not all work to achieve the same goal: difficult to build identity
2. Organizational identity 3. Detect identity gaps (between image and vision/culture)
• Qualitative interviews • Occur if employees don’t deliver on the brand promise
• If not enough: interaction/immersion with culture to interpret • Effective, continuous interaction/communication with StH required
• Three perspective approach: 4. Align identity gaps
(1) Integration perspective: Consensus and consistency • Five cyclical steps:
(2) Differentiation perspective: Subcultures within org. (1) Stating: State vision/identity
(3) Fragmentation perspective: Multitude views (2) Organizing: Link with culture and image practices
3. Corporate image and reputation (3) Involving: Involve StH and employees
• Surveys and laddering techniques, cognitive/social psychology (4) Integrating: Align identities across internal functions
• Key elements to be studied: (5) Monitoring: Track gaps and performance
(1) Perception: Meaning creation 5. Challenges when building brand equity
(2) Cognition: Mental images ensuring recognition • Objectives must be clearly defined and results measured against it
(3) Attitudes: General evaluations • Consider whether org. structure suits aim of brand identity
• Image: Result of ST efforts • Ensure daily involvement and comitment
• Reputation: LT evaluation of brand actions
