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Wood 2000 Brands and Brand Equity MAMAGEMENT DECISION PDF
Wood 2000 Brands and Brand Equity MAMAGEMENT DECISION PDF
Lisa Wood
Sheffield Hallam University, Sheffield, UK
Table I
Summary of brand definitions and descriptions
Emphasis on brand benefits to the company Emphasis on brand benefits to the consumer
Aaker (1991) Aaker (1996)
American Marketing Association (1960) Alt and Griggs (1998)
Bennett (1988) Ambler (1992)
Dibb et al. (1997) Boulding (1956)
Doyle (1994) Brown (1992)
Kotler et al. (1996) de Chernatony and McDonald (1992)
Stanton et al. (1991) Doyle (1994)
Watkins (1986) Goodyear (1993)
Keller (1993)
Levitt (1962)
Martineau (1959)
Murphy (1992)
Sheth et al. (1991)
Wolfe (1993)
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Lisa Wood al. (1995) who suggest that: the term ```competitive advantage'' as the
Brands and brand equity: If brands do have value then the way a outcome in R2. The performance measures
definition and management company uses its portfolio of brands is a top adopted in brand management are crucially
Management Decision management decision. important, as they can influence the
38/9 [2000] 662±669
The restructuring of brand management to objectives and strategies chosen by
multi-discipline teams is also gaining managers. Quantification itself is considered
momentum. de Chernatony (1997) indicates to be important as it provides hard data that
that brand management is: can be compared year on year, as well as
. . . becoming more of a team-based activity, providing marketers (or other functions)
managed at more senior levels by people who with well-defined targets.
adopt a more strategic perspective. Brand value is suggested as one of the
performance measures that can replace the
Clearly, it is important that everyone
term ``competitive advantage'' in R2. This is
involved in brand management is working
in essence the relationship previously
towards a common goal. A starting point in
outlined in Figure 1.
achieving goal congruence is a common
Figure 1 suggested a relationship between
vocabulary, which this article has sought in
the various concepts of brand equity (i.e.
part to provide.
brand value is a function of brand strength
The integrated definition of a brand as:
. . . a mechanism for achieving competitive which is, in turn, a function of brand
advantage for firms, through differentiation description) which Feldwick (1996) asserted
... cannot be demonstrated to exist in an
operational context. It is suggested in this
adopts the holistic approach to branding, and paper that strategic management of brands
assumes relationship R1 below: would be facilitated by making this
R1: marketing mix ! brand relationship explicit, monitored and
! competitive advantage measured. However, the structure and
culture of organisations may not always
In relationship R1, brands are created using facilitate the strategic approach.
the marketing mix in a way that is Multi-discipline teams and other emergent
synergistic. Brands are strategically characteristics of brand management,
positioned in the market by offering benefits together with the balance sheet capitalisation
that are distinct from competition and that of brand value may imply making
are desired by consumers. Hence, operational the relationship outlined in
competitive advantage is achieved. Figure 1. However, this has yet to become
The process of this relationship is outlined explicit, which it would need to be for
in R2: effective asset management. Figure 4
R2: marketing mix ! brand description indicates the relationships that would exist if
! brand strength brand equity were to be managed both
strategically and operationally.
! competitive advantage
Whereas Figure 1 suggested that brand
description determines brand strength,
Managers of brands are essentially involved
which in turn determines brand value,
in the creation of brand description and
Figure 4 recognises that the measurement of
therefore the degree of brand strength or
brand strength and brand value provides
brand loyalty achieved. It is assumed that the
information that may determine how brand
higher the degree of brand strength achieved,
description is managed. In this model, the
the greater the competitive advantage.
measurement of brand value is of managerial
Competitive advantage, and the outcome of
significance rather than purely a financial
brand activity can be measured in a number
accounting exercise.
of ways. Some are suggested in Figure 3.
Whereas added value, profit and revenue
It should be noted that the bulleted (and
are historically focused measures, brand
other) performance measures could replace
value looks to the future. Brand value is an
index-based measure that seeks to represent
Figure 3
the net present value of the future earnings
Measures of competitive advantage
stream of a brand. The job of managers of
Figure 4
The management of brand equity
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Lisa Wood brands therefore, is to maximise the Ambler, T. and Styles, C. (1996), ``Brand
Brands and brand equity: long-term value of that earnings stream. This development versus new product
definition and management development: towards a process model of
will require expenditure on the marketing
Management Decision mix to support brands, and may lead to short- extension decisions'', Marketing Intelligence
38/9 [2000] 662±669 and Planning, Vol. 14 No. 7, pp. 10-19.
term sub-optimisation (even to profit and loss
account losses) to ensure the long-term brand American Marketing Association (1960),
Marketing Definitions: A Glossary of
building. Brand value has an additional
Marketing Terms, AMA, Chicago, IL.
advantage over other measures, in that it
Arnold, D. (1992), The Handbook of Brand
addresses the health of the market, as well as
Management, Century Business: The
the health of the brand within a market.
Economist Books.
Performance measures that encourage Bennett, P.D. (1988), Dictionary of Marketing
decisions that promote the long-term health Terms, The American Marketing Association,
of the brand, are considered to be better than Chicago, IL, p. 18.
measures that do not encourage strategic Boulding, K. (1956), The Image, University of
decision making. A key benefit of adopting Michigan Press, Ann Arbour, MI.
brand value as a performance measure is that Brown, G. (1992), People, Brands and Advertising,
it creates a long-term focus for management. Millward Brown International, New York,
If brand strength is the degree of attachment NY.
to a brand, and brand value is based on the Crainer, S (1995), The Real Power of Brands:
future earnings of a brand then the higher Making Brands Work for Competitive
the brand strength the higher the brand Advantage, Pitman Publishing, London.
value. Managers of brands (not necessarily Dacin, P.A. and Smith, D.C. (1994), ``The effect of
marketers alone) should therefore manage, brand portfolio characteristics on consumer
evaluations of brand extensions'', Journal of
and seek to maximise, both brand strength
Marketing Research, Vol. 31, May, pp. 229-42.
and brand value. The natural long-term
Davis, S. (1995), ``A vision for the year 2000: brand
outcome of this should be increased
asset management'', Journal of Consumer
profitability.
Marketing, Vol. 12 No. 4, pp. 65-82.
Dean, J. (1966), ``Does advertising belong in the
Notes capital budget?'', Journal of Marketing,
1 A brand extension means using a brand name Vol. 30 No. 4, October.
successfully established for one segment or de Chernatony, L. (1997), ``Integrated brand
channel to enter another one in the same building using brand taxonomies'', Journal of
broad market. Brand stretching means Product and Brand Management, Vol. 6 No. 1,
transferring the successful brand name to pp. 56-63.
quite a different market.. de Chernatony, L. and McDonald, M. (1992),
2 Products are viewed as having a core and Creating Powerful Brands, Butterworth
surround. The core identifies the basic Heinemann, Oxford.
features of the product such as functional Dibb, S., Simkin, L., Pride, W.M. and Ferrell, O.C.
performance. This is said to be responsible for (1997), Marketing:Concepts and Strategies, 3rd
about 20 percent of the impact of a product (in European ed., Houghton Mifflin, Boston, MA,
consumer marketing). The surround focuses p. 264.
those features/benefits that are less tangible, Doyle, P. (1994), Marketing Management and
and more subjective, such as image. These Strategy, Prentice-Hall, Englewood Cliffs, NJ,
features are said to be responsible for about 80 pp. 159-65.
percent of the impact of the product. Ecroyd, L. and Lyons, H (1979), ``Improve your
3 Indicated by market concentration. product development: organising to develop'',
Institute of Food Science and Technology (UK),
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Application questions
1 Should brands always be managed by 2 How is brand performance measured in
marketers? your organisation?
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