Brand management and the marketing mix model

Abstract

Brand management is typically defined as the way in which brands are positioned in the marketplace, both in terms of tangibles such as price, packaging and the marketing mix and intangibles such as consumer perceptions and brand equity. The conventional marketing mix model is often used to inform the tangible elements, but is lacking into two key aspects. Firstly, it ignores the role of intangibles. Secondly, the focus is solely on individual brands in isolation. This ignores the wider competitive context, where the decision to choose one brand is the simultaneous decision not to choose another. Successful brand management, however, requires a simultaneous holistic view of all players. To address both issues, this article argues for a dynamic time series version of the discrete choice attraction model. Firstly, the demand system structure treats the entire category as a single unit, capturing competitive steal, cannibalisation, halo and category expansion effects of brand-specific marketing. This provides accurate marketing return on investment and budget allocation, facilitating the manufacturer-retailer relationship. Secondly, the time series approach allows us to quantify the evolution and drivers of consumer brand tastes – critical to understanding brand intangibles. This enables managers to set marketing strategy for optimal long-term brand performance.