Content area
Full Text
Stan Maklan: Principal Consultant with Computer Sciences Corp., Farnborough, UK
Simon Knox: Professor of Marketing, Cranfield University, UK
Introduction
This paper outlines a new approach for managing brands that brings the process into line with recent advances in the management of modern, team-based organizations. In the 1980s, the discipline of creating brands out of products and services spread from the consumer goods industry to financial services, travel, retail and certain industrial sectors (de Chernatony and McDonald, 1992). Company after company invested in new identities, converting their goods and services into branded portfolios through advertising, direct mail and publicity. These investments yielded substantial returns when they were accompanied by sustained efforts at increasing customer value by improving quality, service and optimizing the cost base. British Airways, Andersen Consulting, Haagan Daz, First Direct, BMW and Virgin stand out as examples of well-branded and well-delivered customer value propositions.
However, the experience of branding has not been universally satisfactory (Court et al., 1993). For instance, banks have retreated from the wall of product brochures that used to greet customers; British Rail marketing is the subject of jokes; Mercedes has suffered tremendous losses through the recession and customers now refuse to pay a premium for the traditional computer brand leaders such as IBM, Digital and Apple. In retailing, UK petroleum brands have lost one-quarter of their market to grocery retailers Tesco and Sainsbury almost overnight. More worryingly still for the advocates of branding is the serious loss of brand equity, the differential effect that brand knowledge has on consumer response to the marketing of that brand (Keller, 1993), which has been widely experienced in companies such as Unilever, Coke, Philip Morris (Marlboro) and Procter & Gamble. This led The Economist magazine to publish an article in 1994 entitled, "Death of the brand manager" which questioned the future role of brands and, indeed, the marketing department itself as organizations flatten and move toward horizontal structures.
We believe that questions raised recently over the effectiveness of branding are due to the gap that has arisen between brand value and customer value. Traditional branding no longer adds sufficient customer value because it is generally a standardized offer which is the result of a functional management hierarchy not structured to be sufficiently broad enough,...