A Systems Theory-based Brand Management Model (2.5)

This post is part of my paper ‘The Evolving Role of Creativity in Brand Management’. You can see the table of contents here. The previous part was about the (enduring?) challenges facing brand management.

As Grots & Pratsche (2009, p.18) point out, many of the challenges in today’s economy are too complex to be mastered by a single genious, a single department or a single company. Organisations always had to process and transform the complexity of their environment to survive and they continuously have to reconfigure and transform their coping strategies to keep up with what is happening around them.

To implement that thought in brand management theory and to provide a higher level of abstraction, Tropp (2004, p.170) integrates the aforementioned conceptualizations of brands, environmental challenges and management into a systems theory based model of brand management that is seen in Figure 3.

Systemic Brand Management Model (translated from Tropp 2004, p.170)
Figure 3: Systemic Brand Management Model (translated from Tropp 2004, p.170) 

In this model, the management of a brand itself is included and three major management dimensions are identified (Tropp 2004, p.168): 

  • Brand potential, which asks if brand management has the ability and potential to learn and use systemic thinking and acting,
  • Brand relationship, which measures whether a brand builds and nurtures relationships between customers and a company. 
  • Brand experience, which asks whether a brand has the preconditions to intervene in 

the cognitive system of consumers. 

In addition, three ‘philosophical’ pillars are suggested for brand management (Tropp 2004, p.176f). These pillars are reflexivity, complexity and holistic thinking.

Reflexivity means that brand management is – first of all – self management, in line with management and organisational theory that sees organisations as a communication system. In that sense, brand management is to a high degree self-organisation and self-referential.

Complexity means that the function of brand management in organisations is to vary and transform environmental complexity. To make this happen, brand management has to apply measures to increase complexity (variety) and to reduce complexity (redundancy). Variety is used to come up with new options, futures and possibilities – to produce ‘unpredictable outputs’, redundancy is used to reproduce the already known.

Holistic thinking aims at understanding the relationships, patterns and properties of and within systems instead of focusing linearity and analytical reduction and consequently argues for a circular view of causes and effects and for a more probabilistic planning.

The next part pulls together the conclusions from the current brand management paradigms, the challenges facing brand management and a systems theory view of brand management.

Grots, A. & Pratschke, M., 2009. Design Thinking – Kreativität als Methode. Marketing Review St. Gallen, 26(2), pp.18–23. 

Tropp, J., 2004. Markenmanagement: Der Brand Management Navigator. Markenführung im Kommunikationszeitalter, VS Verlag.

Responding to Brand Management’s Challenges (2.4.4)

This post is part of my paper ‘The Evolving Role of Creativity in Brand Management’. You can see the other posts and the table of contents here.

“Brands are made, not born. The process of their construction is complex. From a manufacturer’s point of view there is a reduced form, “stimulus-response” style simplicity to it:
(1) the manufacturer takes actions (e.g., the marketing mix) and that leads to
(2) customer mental responses towards the brand (perceptions, beliefs, attitudes, and so on). These perceptions (and the resulting willingness to pay) in turn lead to
(3) customer behavior in the product market (e.g., sales), which in turn generates
(4) financial value in general and stock market and market capitalization in particular.
This framework or value chain is a useful basic conceptualization. Still, it obscures some important complexities.” (Keller & Lehmann 2006, p.752) 

As the review of contemporary challenges for brand management tried to argue, predominant brand management practice does not reflect on environmental complexity. What most concepts, models and recipes still have in common is that they use a more or less simplistic perspective on the management of systems (Tropp 2004, p.130). They perceive brands as ‘trivial machines’. This means that by giving an order in the form of information, a system will react in a way so that certain goals will be reached. Metaphorically, managers thus become engineers, dealing with the control of a closed system, simply adjusting the given input based on feedback from the system and thus reaching their objectives.

This perspective promotes a “primacy of planning” (Tropp 2004, p.132) and puts analysis and strategy at the beginning of a linear and controllable process. Management theory, from this perspective, believes that brands can be easily manipulated by using the right levers, following a linear path that leads to guaranteed success if only the instructions are followed carefully. This perspective on brand management may be understood as “brand engineering” and is visible in such words as the German “Markentechnik” that brings with it an almost almighty claim to brand building success. 

If, however, as argued before, the multidimensional knowledge about brands is shaped by the experiences and social interactions of consumers and if this happens in an increasingly unpredictable landscape, then brand management is ill-advised to adhere to this perspective. 

With a failure rate at the introduction of new brands of between 50 and 95% (Buchholz & Wördemann 1998, p.20 qtd. in Tropp 2004, p.144) and in light of the over-boarding complexity of companies’ environments, the empirical regularity today is closer to failure (Ehrenberg 2002; Ehrenberg 2001) than success. This, in turn, raises doubts if these failures are a consequence of not obeying to the how-to’s of positioning, branding or even advertising execution or if it is the underlying paradigm of a linear and logically deductible outcome and “how-to” literature that might be flawed (Tropp 2004, p.144). 

Buchholz, A. & Wördemann, W., 1998. Was Siegermarken anders machen, Econ. 

Ehrenberg, A., 2001. Marketing: Romantic or Realistic? Marketing Research, 13(2), pp.40–42.

Ehrenberg, A., 2002. Marketing: Are you really a realist? strategy + business, 27(Second Quarter 2002), pp.22–25. 

Keller, K.L. & Lehmann, D.R., 2006. Brands and branding: Research findings and future priorities. Marketing Science, 25(6), p.740. 

Tropp, J., 2004. Markenmanagement: Der Brand Management Navigator. Markenführung im Kommunikationszeitalter, VS Verlag.

Challenges for Brand Management: Communication (2.4.3)

This post is part of my paper ‘The Evolving Role of Creativity in Brand Management’. You can see the other posts and the table of contents here.

Historic perspectives on brand management have identified some distinct phases that each go along with certain developments and traits (Gries 2006, p.15ff; Zurstiege 2007, p.19ff; Tropp 2004, p.22ff). The beginning of modern advertising in Germany is tied to the industrialisation and the associated introduction of freedom of trade (1869) and registered and protected trademarks (1874) (Zurstiege 2007, p.24). With the social acceptance of the concept of competition started the professionalisation of advertising and – along with it – advertising research, which in turn led to the public debate of its central techniques in Vance Packards’ “The Hidden Persuaders” (Zurstiege 2007, p.24).

Gries (2006, p.15) sees products as media of the modern age and describes the process of the medialisation of products. This process started in the late 19th century, accelerated due to a strong increase of demand in the 20s and 30s and is concluded with the widespread diffusion of televisions in the 60s. Since then, according to Gries (2006, p.15) a brand works similar to a newspaper, the radio or television in that it is surrounded by a dense net of communication relationships that formed over the course of this process of medialisation.

Looking at the main functions that brands played in different eras, Tropp identified three phases that he calls “Markierungsphase” (labelling or branding phase), “Wirkungsphase” (effect or impact phase) and “Kommunikationsphase” (communication phase).

The first or branding phase started around the 5th century, when identification and distinction emerged as the first function of brands (Tropp 2004, p.23f). Social developments like the formation of the first cities or the establishment of guilds changed the specific functions of brands. However, it took until the before mentioned dawn of the industrial age, until the ‘effect phase of brands’ emerged (Tropp 2004, p.25ff). Apart from the identification function, brands’ chief function now lied in persuading potential consumers. In addition to the identification of a brand now there is the social practice of identification with a brand (Tropp 2004, p.36). Holt (2002, p.79ff) calls this the modern branding paradigm:

„Marketers made no pretense about their intentions in these branding efforts. They directed consumers as to how they should live and why their brand should be a central part of this kind of life. Advertisements shared a paternal voice that is particular to this era. By contemporary standards, these ads appear naive and didactic in their approach. This paternalism reveals that, at the time, consumer culture allowed companies to act as cultural authorities. Their advice was not only accepted but sought out.“ (Holt 2002, p.80)

Holt (2002, p.83ff) argues, that this paradigm ended up being replaced by the creative revolution of the 60s in what he denoted as an emerging post-modern branding paradigm. Branding then had to cope with social changes at a massive scale and a new anti-corporatist, yet consumerist culture that it somehow had to adapt to. It adopted and in turn relied on five central and then new techniques (for a description of the techniques that had a widespread media impact see Klein 1999): Authentic Cultural Resources, Ironic, Reflexive Brand Persona, Coattailing on Cultural Epicenters, Life World Emplacement, Stealth Branding . While these techniques were certainly new and a response to changing cultural and social environments at the time, they have again run into some severe contradictions and are losing their effect quickly (ibid.).

Holt (2002, p.68ff) and Tropp (2004, p.68ff) both argue that we can now see a different phase, that puts the relationship between a company and its consumer, or in general its role in society into focus. Driven on the one hand by the pressing scarcity of attention (Schmidt 2004, p.53ff; Tropp 2004, p.71f), by changing attitudes and expectations that citizens have of the role of companies in their communities and by the emergence of new technologies and feedback channels that made marketing tactics like CRM, but also a society ever more aware of the power of their public opinion possible. While doubts about the role, effectiveness and efficiency of advertising are a main driver of this transformation, this perspective also implies a more consumer-centric view of communication. It argues that the construction of meaning is done by consumers within the boundaries of collectively shared social symbols and ultimately demands a rejection of the pure sender-receiver model of mass communication as conceptualized in the early 20th century (Tropp 2004, p.72) and since then renounced by communication research.

The main conclusion of this current phase of branding is that companies are now more than ever competing in the field of communication and that communicative competence that goes beyond advertising is becoming a core asset of companies.

Gries, R., 2006. Produkte & Politik: zur Kultur- und Politikgeschichte der Produktkommunikation, Facultas Verlag.
Holt, D.B., 2002. Why do brands cause trouble? A dialectical theory of consumer culture and branding. Journal of Consumer Research, 29(1), pp.70–90.
Klein, N., 1999. No Logo: no space, no choice, no jobs ; taking aim at the brand bullies, New York, NY: Picador.
Schmidt, S.J., 2004. Die Werbung ist vom Anfang an am Ende. In S. Kemmler, J. Ballentin, & C. Gerlitz, eds. Die Depression der Werbung. : Berichte von der Couch / Berliner KommunikationsFORUM e.V. Sebastian Kemmler. BusinessVillage.
Tropp, J., 2004. Markenmanagement: Der Brand Management Navigator. Markenführung im Kommunikationszeitalter, VS Verlag.
Zurstiege, G., 2007. Werbeforschung 1st ed., Utb.

Brand Management Paradigms: The Relational Paradigm (2.3.4)

Your Brand is Not My Friend from http://www.mpdailyfix.com/your-brand-is-not-my-friend/

This post is part of my bachelor paper ‘The Evolving Role of Creativity in Brand Management’. You can see the other posts and the table of contents here.

The relational paradigm addresses two arguments that are held against the projective and adaptive paradigm: the projective paradigm neglects to account for consumers’ role in creating brand meaning, the adaptive paradigm focuses on consumer evaluation but doesn’t demonstrate how organisations create brand value in this setting. From a relational perspective brand management is seen as “[…] an ongoing dynamic process, without a clear beginning and ending, in which brand value and meaning is co-created through interlocking behaviours, collaboration and competition between organizations and consumers” (Louro & Cunha 2001, p.865). These relationships

“[…] involve reciprocal exchange between active and interdependent relationship partners; (2) relationships are purposive, involving at their core the provision of meanings to the person who engage them; (3) relationships are multiplex phenomena: they range across several dimensions and take many forms, providing a range of possible benefits for their participants; and (4) relationships are process phenomena: they evolve and change over a series of interactions and in response to fluctuations in the contextual environment” (Fournier 1998, p.344)

The relational approach to brand management then encompasses, in an interactive brand management process the core activities of all before mentioned paradigms: 1) building and communicating a brand identity that links to an organisation’s strategy and resources, 2) projecting it through a defined set of brand elements and a marketing program and 3) dynamically reconstruct and co-develop it “in the context of path-dependent consumer-brand relationships by encouraging active dialogue, mobilizing customer communities, managing customer diversity and co-creating personalized experiences (Fournier 1998; Prahalad & Ramaswamy 2000)” (Louro & Cunha 2001, p.866).

This has important implications for the firm’s desired organisational capabilities. For a company to be able to sustain these dynamic relationships with consumers, it has to combine the strengths of market sensing (outside-in) with inside-out capabilities, implementing “multidimensional, process-based measuring systems” (Louro & Cunha 2001, p.866) that “facilitate real-time action and reaction” (Keller 2000; Keller 1998; De Chernatony 1999 qtd. in Louro & Cunha 2001, S.867)

While the paradigms certainly describe “ideal-types” of brand management practices, assumptions and structures, they are able to give an overview into the current state of normative and academic literature in the field and the embodied assumptions about brands, brand management and the roles of organisations and consumers in the process. They might, however, also be read as a process of refinement and a historical development. Not only brand management as a function has to (or doesn’t have to, depending on the paradigm) adapt to outside changes, but also brand management as a discipline changes its focus, depending on economic, social, cultural and technological developments, thus the relational paradigm integrating earlier dominant modes.

Analysing paradigms and brand management models, Tropp (2004) uses a systems theory approach for a conceptualization of brands and brand management that will be used as the central theme of this work. Like proponents of the relational paradigm, Tropp (2004, p.115f) aims to bridge the before mentioned theoretical gap between image and identity. By analysing the relationship between companies and their environment from a systems theory view he first defines brands via two fundamental functions: Brands, according to Tropp [1] are the unique, emotionally charged field of knowledge about a company, a product or a service, that is symbolized by a set of highly complexity-reducing communication offers. It fulfils two mutually conditional functions:

a) Realizing and strengthen the structural coupling between companies and consumers (economic function)

b) Being the trigger and stabilizer for individual and social constructions of reality (life-world function)

Brands then, are not either the identity of a company or the image in consumers’ minds, but they receive their meaning from the social interactions around the brand and their value from being socially shared, and multidimensional knowledge (Keller 2003) that people can refer to Kapferer (1997, p.25). While Yakob (2007) compares this phenomenon with the collectively shared perception of the value of money, Tropp (2004, p.123) argues that brands usually cannot claim to have reached the status of being truly collectively shared knowledge. This means that consumers may individually very well have a different image of a brand, but that the meaning, the overall value of the brand at large – for both consumers as well as the company – is derived from what is commonly shared and shaped by the numerous social interactions performed around it (Holt 2010, p.3). As a consequence, this perspective leads to the conclusion that while brands are legally owned by the corporation managing it, they don’t have the possibility to fully control their meanings (Gries 2006, p.27).

After introducing the different brand paradigms at work today, with a focus on the relational perspective, the following chapter will now analyse the challenges, trends and changes contemporary brand management has to deal with.

[1] Translated from: „Eine Marke ist ein einzigartiger emotional aufgeladener Wissensbereich über ein Unternehmen, ein Produkt oder eine Dienstleistung, der von einer Menge hochgradig komplexitätsreduzierender Kommunikationsangebote symbolisiert wird. Diese erfüllt zwei sich wechselseitig bedingende Funktionen:a) Die strukturelle Kopplung zwischen Unternehmen und Konsumenten zu realisieren und zu festigen (ökonomische Funktion).b) Auslöser und Stabilisator für individuelle und soziale Wirklichkeitskonstruktionen zu sein (lebensweltliche Funktion). (Tropp 2004, p.115f)

De Chernatony, L., 1999. Brand management through narrowing the gap between brand identity and brand reputation. Journal of Marketing Management, 15(1), pp.157–179.

Fournier, S., 1998. Consumers and their brands: Developing relationship theory in consumer research. Journal of consumer research, pp.343–373.

Holt, D.B., 2010. Brands and Branding. Available at: http://culturalstrategygroup.com/wp-content/uploads/2010/10/brands-and-branding-csg.pdf.

Kapferer, J.-N., 1997. Strategic brand management: creating and sustaining brand equity long term, Kogan Page Publishers.

Keller, K.L., 2003. Brand synthesis: The multidimensionality of brand knowledge. Journal of Consumer Research, pp.595–600.

Keller, K.L., 1998. Strategic brand management: building, measuring and managing brand equity, Prentice Hall.

Keller, K.L., 2000. The brand report card. Harvard Business Review, 78(1), pp.147–158.

Louro, M.J. & Cunha, P.V., 2001. Brand management paradigms. Journal of Marketing Management, 17(7), pp.849–875.

Prahalad, C.K. & Ramaswamy, V., 2000. Co-opting customer competence. Harvard business review, 78(1), pp.79–90.

Tropp, J., 2004. Markenmanagement: Der Brand Management Navigator. Markenführung im Kommunikationszeitalter, VS Verlag.