Term Concept
Transcript of Term Concept
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Brand Management Facilitation:Brand Management Facilitation:A Systems Dynamic ApproachA Systems Dynamic Approach
For Decision MakersFor Decision Makers
Peter Otto / PAD 824, Fall 2001Peter Otto / PAD 824, Fall 2001
A Conceptual FrameworkA Conceptual Framework
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Todays PresentationTodays Presentation DefinitionDefinition
Key terms in brand managementKey terms in brand management
The brand management modelThe brand management model
Sector overviewSector overview
Behavior of the modelBehavior of the model
The dissertation modelThe dissertation model Q&AQ&A
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A Brand Marks what PeopleA Brand Marks what People
Think and FeelThink and Feel It is a rational and emotional formulaIt is a rational and emotional formula
basedbased on the sum of trust, relevance, andon the sum of trust, relevance, and
significance that relates people to a firm, asignificance that relates people to a firm, aproduct, or a service throughout their life.product, or a service throughout their life.
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Market DynamicsMarket DynamicsBusinesses and markets in which brands playBusinesses and markets in which brands play
an important role are both highly complex:an important role are both highly complex:
They are tightly coupled: there are lots ofThey are tightly coupled: there are lots ofcomplex interactions, interventions based oncomplex interactions, interventions based ona single action are unlikely to provea single action are unlikely to provesuccessful in the long termsuccessful in the long term
They behave counterThey behave counter--intuitivelyintuitively they canthey canbehave in the opposite manner to which onebehave in the opposite manner to which oneintendsintends
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Market Dynamics cont.Market Dynamics cont. They exhibit tradeThey exhibit trade--offsoffs
They are policy resistantThey are policy resistant attempting toattempting to
influence the system in one direction willinfluence the system in one direction willoften cause some reaction which minimizesoften cause some reaction which minimizes
the impact of the original actionthe impact of the original action
And they are dynamicAnd they are dynamic changes occur onchanges occur on
many different timescalesmany different timescales
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Brand ManagementBrand ManagementSome Key TermsSome Key Terms
Brand AwarenessBrand Awareness
Brand LoyaltyBrand Loyalty
MotivationMotivation
Desire to Buy BrandDesire to Buy Brand
Perceived QualityPerceived Quality
SatisfactionSatisfaction
Negative Product ImageNegative Product Image
Positive Product QualityPositive Product Quality
Brand EquityBrand Equity
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The Dimensions in BrandThe Dimensions in Brand
BuildingBuilding Brand identityBrand identity
Brand awarenessBrand awareness
Familiarity and knowledge of the brandFamiliarity and knowledge of the brand
Consideration to evaluate the brandConsideration to evaluate the brand
PurchasePurchase
Brand loyaltyBrand loyalty (or brand equity)(or brand equity)
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A Managers Goal must be toA Managers Goal must be to
Build Brand EquityBuild Brand Equity
A brand can only be strong ifA brand can only be strong if itit has a stronghas a strong
supply of loyal customerssupply of loyal customers
Brand equity therefore can be defined as aBrand equity therefore can be defined as a
measure of strength of consumersmeasure of strength of consumers
attachment to a brand.attachment to a brand.
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Purpose and GoalPurpose and Goal of the Modelof the Model Brand equity is a complex system and difficultBrand equity is a complex system and difficult
to manage and understand.to manage and understand.
A simulation modelA simulation model will be used, towill be used, to identifyidentifykey leverage points to understand thekey leverage points to understand the
behavior of the system, thus reducebehavior of the system, thus reduce
uncertainty in decision making.uncertainty in decision making.
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Brand
loyalty
Perceived quality
atisfaction
Negative productimage
+
++
R
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+/-
Qualit
i
J
b O
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Product
attractiveness
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BrandBrandManagementManagementA ConceptualizedA Conceptualized
Sector OverviewSector Overview
BrandBrandManagementManagementA ConceptualizedA Conceptualized
Sector OverviewSector Overview
The Brand
Awareness/Effectivenessector
The BrandAwareness/Loyalty
ector
The BrandLoyalty/Quality
ector
Brand
Awareness
Motivation
Desire to
choose brand
Brand
loyalty
+
+
+
+
R
It'
What th
Cust r Wants
RSnowball
Attractiveness of
other brands
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rand
A areness
Competitive
pressure
Effectiveness
Investment
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+
+
B
BCom
etitionInfluences
Investment
Influences
+-
Kno ledge+
+Knowlege
is good
R
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The BrandThe Brand
Awareness/Effectiveness SectorAwareness/Effectiveness Sector
The BrandThe Brand
Awareness/Effectiveness SectorAwareness/Effectiveness Sector
Brand
areness
Competitive
pressure
E ectiveness
Investment
-
+
+
B
BCom etitionInfluences
Investment
Influences
+
-
Kno ledge+
+Knowlege
is good
R
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VensimVensim BrandBrand
Awareness/Effectiveness SectorAwareness/Effectiveness Sector
Brand
Awareness
Competitive
pressure
ecrease in
a
arenessIncrease in brand
a areness
Fraction o
potential
BA reached
et e
ect o
BA
Loyalty
actor
InitialInvestment
Above-the-lineinvestment
rice promotion
investment
Belo -the-line
investment
ublic relations
investment
Weight onabove-the-line
investment
Weight on price
promotion investment
Weight onb
elow-the-lineinvestment
Weight on publicrelations investment
E
ect
rom investment
in
rice
romotion
Consumer
knowledgeabout brand
Kno ledge gain
E
ect on gaining
kno ledge
Forgetting rate
Forget impact
on a areness
Awareness
investment
Awareness
multiplier
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VensimVensim BrandBrand
Awareness/Loyalty SectorAwareness/Loyalty Sector
Motivation
Attractivenesstochooseother rands
BrandLoyalty
Increasein randloyalty
Pressureonloyalty
Effecton rand
choice
Investmenteffectsonbrandloyalty
Desireto b y
brand
Increaseindesire
Factorstoincreasedesire
Loosinginterest
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VensimVensim BrandBrand
Loyalty/Quality SectorLoyalty/Quality Sector
Perceived
Product
QualityPressure on
PQ
PQ net
increase
Negative product
image
Satis ! action
PQ multipliers
Relative delivery
delay
Product
Attractiveness
E" "
ect o " price on
attractiveness
E" "
ect o " quality on
attractiveness
E" "
ect o " delivery delay
on attractiveness
Actual product
quality
Relative
Price
Price
Acceptable price
Delivery delay
Acceptable
delivery delay
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The BrandThe Brand
Loyalty/Quality SectorLoyalty/Quality Sector
The BrandThe Brand
Loyalty/Quality SectorLoyalty/Quality Sector
Bra
l alt
Percei e qualit
Satisfacti
Negati e pr uct
image
R
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/-
Quality i
J O
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Pr uct
attracti e ess
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The Bottom Line: Brand EquityThe Bottom Line: Brand Equity
Brand E ity
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Model BehaviorModel Behavior
Base un
100 Awareness
100 Loyalty
100 desire
1 Quality
0 Awareness
0 Loyalty
0 desire
0.4 Quality
0 6 12 18 24 30 36 42 48
Time (Month)
Brand Awareness : base Awareness
Brand Loyalty : base LoyaltyDesire to buy brand : base desire
Perceived Product Quality : base Quality
Investment: 70ATL: 0.7BTL: 0.1PP: 0.1
PR: 0.1
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100 Awareness
100 Loyalty
100 desire
0.8 Quality
0 Awareness
0 Loyalty
0 desire
0.4 Quality
0 6 12 18 24 30 36 42 48
Time (Month)
Brand Awareness : base2 Awareness
Brand Loyalty : base2 Loyalty
Desire to buy brand : base2 desire
Perceived Product Quality : base2 Quality
Model BehaviorModel Behavior
Investment: 35ATL: 0.7BTL: 0.15PP: 0.05
PR: 0.1
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Weakness of the Model
Weakness of the Model
Does not consider people in the systemDoes not consider people in the system
Missing link to capture growth and decline ofMissing link to capture growth and decline of
market sharemarket share
Key leverage pointKey leverage point:: investment rather thaninvestment rather than
consumersconsumers
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The new ApproachThe new Approach: Brand: Brand
Equity as Resource SystemEquity as Resource System
Loyal Customers 0 3 6 9 12
Inflow
Outflow
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What is the contribution to theWhat is the contribution to the
body of knowledge?body of knowledge?Theory:Theory:
By creating a generic model to investigate theBy creating a generic model to investigate the
effect of resource allocation which influenceseffect of resource allocation which influencesthe brand equity of a firmthe brand equity of a firm
Praxis:Praxis:
Providing recommendations for improvingProviding recommendations for improvingbrand strategiesbrand strategies
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Causal Loop DiagramCausal Loop Diagram
Competitive
pressure Brand awareness
Familiarity &
knowledge of thebrand
Consideration to
evaluate brand
Desire to buy
brand
Purchase
Brand loyals
Investment
+
Evaluation of
alternatives
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+
+
+
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+
+
+
+
Word of mouth
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+
+
Attractiveness of
products
Perceived quality
of brand
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+
+
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Quality Price
2
1
5
B1
3-
R4
Effectfrom invstment
Competitor
determins choice
AwarenessfromInvestment
Word ofmouth effect
Effectfrom pricevalue relation
Investment control
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Stock and Flow StructureStock and Flow Structure
Unaware Aware Familiarity &
Knowledge
ConsiderationDesire to buyLoyalty
Potentials Becoming aware Gaining knowledge
Attractiveness
Purchase Evaluation
Potential
customers
Population
Investment
Word of mouth
Relevance (advantage
over competitor)
Evaluation of
alternatives
Attractiveness of
other brands
Price sensitivity
atisfaction rate in
categoryAttractiveness of
product
Preceived quality
Ownership
experience
Loosing awareness
Loosing interest
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End o Slide Show
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