Brand Management Facilitation: A Systems Dynamic Approach For Decision Makers

2. Brand Management Facilitation:A Systems Dynamic ApproachFor Decision Makers A Conceptual Framework Peter Otto / PAD 824, Fall 2001

3. Today‘s Presentation • Definition • Key terms in brand management • The brand management model • Sector overview • Behavior of the model • The dissertation model • Q&A

4. A Brand Marks what People Think and Feel • It is a rational and emotional formula basedon the sum of trust, relevance, andsignificance that relates people to a firm, aproduct, or a service throughout their life.

5. Market Dynamics Businesses and markets in which brands play an important role are both highly complex: • They are tightly coupled: there are lots of complex interactions, interventions based on a single action are unlikely to prove successful in the long term • They behave counter-intuitively – they can behave in the opposite manner to which one intends

6. Market Dynamics cont. • They exhibit trade-offs • They are policy resistant – attempting to influence the system in one direction will often cause some reaction which minimizes the impact of the original action • And they are dynamic – changes occur on many different timescales

7. Brand ManagementSome Key Terms • Brand Awareness • Brand Loyalty • Motivation • Desire to Buy Brand • Perceived Quality • Satisfaction • Negative Product Image • Positive Product Quality • Brand Equity

8. The Dimensions in Brand Building • Brand identity • Brand awareness • Familiarity and knowledge of the brand • Consideration to evaluate the brand • Purchase • Brand loyalty (or brand equity)

9. A Manager‘s Goal must be to Build Brand Equity • A brand can only be strong if it has a strong supply of loyal customers • Brand equity therefore can be defined as a measure of strength of consumers‘ attachment to a brand.

10. Brand Equity Source: Interbrand 1999, The World Biggest Brands

11. Purpose and Goal of the Model • Brand equity is a complex system and difficult to manage and understand. • A simulation model will be used, to identify key leverage points to understand the behavior of the system, thus reduce uncertainty in decision making.

12. The Brand Management Model

13. BrandManagementA ConceptualizedSector Overview The Brand Awareness/Effectiveness Sector The Brand Awareness/Loyalty Sector The Brand Loyalty/Quality Sector

14. The Brand Awareness/Effectiveness Sector

15. Vensim® Brand Awareness/Effectiveness Sector

16. The Brand Awareness/Loyalty Sector

17. Vensim® Brand Awareness/Loyalty Sector

18. Vensim® Brand Loyalty/Quality Sector

19. The Brand Loyalty/Quality Sector

20. The Bottom Line: Brand Equity

21. Model Behavior Investment: 70 ATL: 0.7 BTL: 0.1 PP: 0.1 PR: 0.1

22. Model Behavior Investment: 35 ATL: 0.7 BTL: 0.15 PP: 0.05 PR: 0.1

23. Weakness of the Model • Does not consider „people“ in the system • Missing link to capture growth and decline of market share • Key leverage point: „investment“ rather than „consumers“

24. 0 3 6 9 12 The new Approach: Brand Equity as Resource System Inflow Loyal Customers Outflow

25. Objectives • To gain insides in how to control a desired level of loyal customers, thus support resource allocation decisions of a firm • To test and compare alternative strategies to improve the management of brand equity

26. What is the contribution to the body of knowledge? Theory: • By creating a generic model to investigate the effect of resource allocation which influences the brand equity of a firm Praxis: • Providing recommendations for improving brand strategies

27. Causal Loop Diagram

28. Stock and Flow Structure

29. R Questions Answers

30. End of Slide Show Press “Esc” to Exit