Brand Management

Abstract

Brand management is the practice of managing all aspects of a brand, from tangibles such as logo and package design to the intangible tenor of the emotions a consumer experiences when purchasing a brand product or service. First used in its modern form by Procter & Gamble in 1931, brand management has become a standard method used by virtually all organizations marketing any type of product or service. This article begins by reviewing the history of brands and the origins of brand management. It then turns to the two main types of brand management, exploring the philosophies and organizational strategies associated with each. Next, it examines how the rise of Internet commerce and advertising has affected brand management. Finally, it turns to the future of brand management, anticipating what changes the field will likely undergo as the twenty-first century continues.

Overview

In the highly competitive twenty-first-century marketplace, brand management has become one of the primary tools used by organizations to gain a sustained competitive advantage over rivals (Louro, M. & Cunha P., 2001; High, 2004). When people consider a brand name, consumers make associations with the product even if they have never used it before. Further, both the physical aspects of the brand, as well as the previously-held beliefs and expectations associated with it (Wong, 2023). While all products or services can eventually be copied, brands are not easily imitated. If marketers successfully endow a brand with associations that tap into consumers' emotional states, then branded products retain some degree of product differentiation, even if the products themselves are copied by competitors (Bengtsson & Firat, 2006). This is the primary goal of brand management: to use a brand to add value to the intrinsic value of a product or service (Keller & Richey, 2006). This added value is called brand equity.

The term "brand" is understood to have a number of different meanings. Some people use the word brand interchangeably with “logo” or “label.” In these contexts, the term refers to the legally protected trademarks, trade names, and trade symbols used to differentiate products. Logos are an example of the building blocks of a brand (Wong, 2023). Others use the term in a more expansive sense to denote the larger bundle of trademarks associated with intellectual property, including product design and packaging, advertising content, sounds, domain names, as well as innumerable other items. Still others use "brand" in an even more holistic sense to indicate the company or entity that owns a given brand. The terms "corporate brand" and "corporate brand personality" are often used interchangeably with “reputation” (High, 2004). The field of brand management accepts and engages with all of these different meanings of the term.

In the twenty-first century, brand management has expanded its scope in order to deal with the challenges and opportunities presented by the Internet and social media. As a global marketplace, the Internet has raised legal questions about brand names and trademarks; questions that were long ago resolved in the traditional marketplace. So long as brand managers are aware of these legal issues, they can use the Internet and social media to exponentially increase consumer awareness of brands (Loosley & Gregory, 2004).

The future of brand management will likely include many other changes besides those instigated by the Internet. The field was long criticized for a lack of accountability, as no reliable metrics had yet been devised to measure the performance of brand managers. Further research into brand metrics for both commercial and noncommercial brands promises to change this situation (Keller, 2001; Swaminathan et al., 2020).

Applications

History of Brands & Brand Management. The roots of brand management can be traced to the late 19th century when a number of business owner-entrepreneurs working independently of one another established the first successful, nationally-recognized branded products (Low, 1994). Before this time, brands and advertising, in general, had been associated with disreputable vendors, such as quack medicine salesmen. But beginning in approximately 1870, and facilitated by Civil War–era improvements in long-distance transportation and communication, as well as advancements in the art of packaging, the first hugely successful brands were born. By the turn of the 20th century, consumers were beginning to associate brands with quality and consistency, two characteristics largely missing in unbranded manufactured goods of the period (Low, 1994).

During these early years in the history of brands, what we would now refer to as brand management was carried out exclusively by firm owners or presidents. The creators of the first successful brands were visionaries, and the novelty of branding made managing newly-created brands the personal project of these forward-looking business owners. Often these men developed brands despite resistance at every level of their organization; from the board of directors to the sales force, company employees were hesitant to embrace changes they did not fully understand (Low, 1994). No single management philosophy or organizational structure predominated during this period. Rather, brands were managed with an "intuitive and common-sense approach" by their entrepreneurial-minded creators (Low, 1994, p. 177).

Only after the market leadership of branded products was established did the management of brands become the domain of professionals. Between 1915 and 1930, the management of brands was transferred from the chief executive suite to the control of specialized managers, who worked with advertising agencies to promote existing brands and bring new brands into being (Low, 1994). During this period, a functional style of managing brands emerged. This first generation of middle managers entrusted with managing brands represented "an entirely new class of businessmen," which was not made up of independent, creative entrepreneurs but of salaried professionals trained in functional specialties and rational problem-solving (Low, 1994, p. 177). These men used their pragmatic skill-set to conduct market research and product testing, create appropriate advertising, develop attractive packaging, prepare sales manuals, and run sales promotions. Managing brands became team-based and highly reliant on a functionally organized company model. Team members, each with their own specialty, worked together in order to develop and market a company's brands (Low, 1994).

While this functional method achieved extraordinary results during the early 20th century, problems soon became apparent. First, poor coordination between team members (and often an outside advertising agency as well) could be disastrous. Second, companies had no formal system for promoting more than one brand in any given market. And, most importantly, no single person was held accountable for the overall success or failure of a brand (Low, 1994). It was this last grievance that Neil McElroy of Procter & Gamble (P&G) sought to address in his now-famous 1931 memo that invented both the idea of modern brand management and the term “brand management.” McElroy suggested that instead of organizing marketing and advertising departments functionally, P&G should organize these departments by brand, with each brand run by its own set of brand managers. P&G adopted this system in 1932, with most other advertising firms following suit during the 1950s and 1960s (Low, 1994).

Between 1930 and 1950, P&G's brand manager system was adopted by very few other agencies. However, in the two decades following World War II, it was adopted en masse until, in 1967, 84 percent of large consumer goods manufacturers in the United States had brand managers (Low, 1994). This large-scale shift from a functional organizational structure to the modern brand manager system was largely due to the proliferation of brands. As it became increasingly common for companies to have multiple brands, it became more difficult to manage these brands with a functional system. Delegating responsibility for a brand to a single brand manager became the only system that seemed to make sense in this environment (Low, 1994). Once the shift was made, a company's various brands became nearly autonomous entities, run by brand managers with a remarkable degree of autonomy, "like a mini-company" (Pearson, 2004, p. 76).

The rapid assimilation to the brand manager system that so many companies underwent during the 1950s and 1960s contributed to a backlash against this system during the 1970s. Companies complained that the system increased the size of bureaucracies and that brand managers had too vague a job description and too little authority to be truly effective. During this period, companies did not abandon brand management altogether but merely adapted the brand manager system to their own company culture and needs (Low, 1994). From this time onward, brand management became a far less rigid field, dominated not by just the brand manager paradigm, but accommodating to countless emerging organizational approaches. Beginning in the 1980s and continuing to the present, brand management has become both more heterogeneous and more pervasive. Brand management has come to be viewed as vital to the future success of all companies and is accordingly carried out by virtually all corporations in a variety of ways (Louro & Cunha, 2001).

Different Types of Brand Management. In the twenty-first-century business world, there is "a cacophony of simultaneously competing and overlapping approaches to brand management" (Louro & Cunha, 2001, p. 850). This "cacophony" is partly due to the previously mentioned multiple understanding of the term "brand." Different ideas about what a brand is have understandably led to different styles of managing brands. The two types of brand management described below each encapsulate a philosophy of brands as well as a style of brand management. Some of these philosophies and styles are in direct contrast with one another; others complement one another without complication. In reality, most firms do not adhere strictly to any one type of brand management but utilize a mix of strategies derived from each.

Brand as Trademark. Some brand managers define a brand as a name, logo, or symbol (Felgner, 2007). For these brand managers, a brand serves two main purposes. First, in the form of a trademark, trade name, or trade symbol, a brand establishes legal ownership of a product and protects the product from the most direct forms of imitation. Second, a brand enables consumers to differentiate a branded product from its competitors (Louro & Cunha, 2001; High, 2004).

This understanding of brands leads to a product-oriented style of brand management. In order for brands defined in this particular sense to be valuable, they need to carry and retain positive associations with consumers. More simply, a brand name or trademark must establish and maintain a reputation for excellence (High, 2004). This task is the principle goal of brand management. It is achieved mainly through vigorous and sustained oversight of production and monitoring of quality control (Pearson, 2004). Advertising and marketing also play an important role in creating brand associations with consumers.

In this type of brand management, success is measured by the marketplace performance of branded products. If quality control in combination with advertising achieves an increase in sales revenue, then brand management has been successful. The most significant weakness of this type of brand management is that it leaves a brand vulnerable to imitation. If a brand is identified with little more than the product itself, then consumers are less likely to exhibit brand loyalty if competitors enter the market with similar products (Louro & Cunha, 2001).

Holistic Brand Management. When a brand is defined either as the entire bundle of intellectual property associated with its trademark or as a company's reputation/corporate brand personality, then brand management becomes a much more complex and diversified undertaking. When a brand is considered to be "a whole greater than the sum of its parts," brand management must likewise supervise every aspect involved with the traditional functions of a brand and more (Keller & Richey, 2006, p. 80).

Besides managing the marketplace products and services that carry a brand's name, brand managers must also manage a brand's intangible identity or personality (Kelley & Richey, 2006; Louro & Cunha, 2001). Such a personality is built out of human traits, such as integrity, compassion, or creativity. Brand managers establish a brand's identity through traditional methods such as advertising, as well as through internal brand management. This latter task necessitates that brand managers become "brand ambassadors," who teach company employees at every level about brand personality and values (Hulberg, 2006, p. 61). Brand management becomes "culture management," or an attempt to direct the entire organizational culture so that it aligns with the brand personality (Hulberg, 2006, p. 64). If this is done effectively, then everyone from the chief executive officer, to the sales force, to the customer relationship team will operate in alignment with brand identity.

This type of brand management offers several distinct advantages over a more product-oriented system. Focusing on corporate brand personality is a way of reducing the costs associated with brand management, as it can promote many products at the same time (Hulberg, 2006; Louro & Cunha, 2001). Additionally, a corporate brand personality is less vulnerable to imitation than a traditional brand. Once a brand has engaged with consumers on an emotional level, consumers are much more likely to stay loyal to that brand in the face of competition (Bengtsson & Firat, 2006). However, a brand is also made vulnerable by this type of brand management in the sense that consumers can more easily associate one troubled product with the entire brand.

Brand Management & the Internet. The dawn of the Internet age raised many issues in the field of brand management. In particular, several legal complications arise when brands migrate from the real world of commerce into the virtual world of Internet commerce. The Internet represents a global marketplace in which national boundaries are faint or nonexistent. This fact becomes problematic for brand management because different nations have very different laws governing advertising, trademarks, and domain registration (Loosley & Gregory, 2004).

Advertising. This is by far the most nebulous area with regards to Internet brand management. Virtually every country has its own national legislation concerning advertising. When advertising in the global marketplace of the Internet, it is sometimes necessary to abide by these various regulations. Specifically, when directing advertising at the population of a particular nation, it is necessary to abide by that nation's advertising laws. Criteria for determining who advertising is directed toward is still rather opaque. Anything from the content of an advertisement to the language it is written in or the placement of the advertisement on a particular website can be taken as evidence that the advertisement was directed toward a particular population. Brand managers should navigate this difficult legal territory by first prioritizing markets and then only directing advertisements to markets given top priority. This approach allows brand managers to ensure that they are in legal compliance with the laws and regulations of each national market they choose to target (Loosley & Gregory, 2004).

Trademarks. When promoting a brand on the Internet, brand managers must first secure special additional trademark protection. Along with the brand name, any icons or designs used to denote brand identity must also be registered. As with advertising, because of the global nature of the Internet marketplace, brand managers must apply for protection in the various national markets in which they expect to do the most Internet business (Loosley & Gregory, 2004).

When nationally recognized brands migrate onto the Internet, they often face challenges from local brands operating under the same brand name in other nations. These local businesses often infringe on brand trademarks and may have to be dealt with in their own nation's legal system (Loosley & Gregory, 2004).

Domain Registration. Domain names, which may include a brand name or slogan, must also be registered. This should always be done as soon as possible in order to prevent "cybersquatting" (Loosley & Gregory, 2004, p. 192). Cybersquatting is a relatively prevalent practice, and consists of opportunists registering a famous brand name as a domain and then attempting to sell this domain back to the company that owns the brand. Although cybersquatting is illegal in many nations (the United States passed the Anticybersquatting Consumer Protection Act in 1999), the easiest way to avoid it is through prevention (Loosley & Gregory, 2004).

Viewpoints

The Future of Brand Management. As the business world moves forward, brand management will continue to evolve. One factor that will certainly affect the field's evolution is globalization. In the past, brand production was largely outsourced because it proved too expensive to maintain factories in developed countries. Now, however, entrepreneurs in developing countries that serve as manufacturing hubs for brands are themselves founding brands that they can both manufacture and produce (Pearson, 2004). It may only be a matter of time before these brands pose serious competition to existing brands in global markets, especially because brands manufactured and produced in local markets can be sold to consumers at a reduced cost.

At the beginning of the twenty-first century, some onlookers pointed to the most common criticism of brand management—a lack of accountability—and suggested that the field had to move toward greater accountability in the future (Hinshaw, 2005). Many charged that the principal problem with brand management was the lack of uniformly tracked brand-related metrics (Keller, 2001). Without such data, it was difficult to evaluate the effectiveness or productivity of brand managers (Hinshaw, 2005). However, in the second decade of the century, charting brand management metrics became easier as companies offered software that could chart the effectiveness of brand advertising; Vizu’s Brand Lift was one such example. Metrics were developed to measure brand management's effects on critical areas such as customer experience and loyalty, brand profitability, satisfaction, trust, and brand value. Researchers have subsequently examined psychological and sociological factors, such as attitude, affect, and identification, that contribute to brand associations with prospective and current consumers. For instance, online brand communities, particularly those on social media platforms, have been shown to drive greater consumer engagement and affect users' sense of brand trust, thus building brand loyalty (Jibril et al., 2019).

Branding—and therefore brand management—has extended beyond corporate and organizational products and services to online platforms, places, ideas, and even people, such as celebrities. Examining the ways in which hyperconnectivity has expanded branding and changed it, Swaminathan et al. (2020) note that brand meaning and experience have been more rigidly controlled for conventional brands and person brands than for platform and idea brands, where multiple stakeholders share creative influence. They further posit that brands are serving new social purposes, including as "containers of socially constructed meaning, architects of value in networks, catalysts of communities, arbiters of controversy, and stewards of data privacy," and question whether conventional brand metrics can evaluate the management of noncommercial brands (Swaminathan et al., 2020).

Social media has become more influential as the twenty-first century progresses. Social media increases the amount of viewership a brand receives. When a brand and its product are promoted by a social media personality or influencer, traffic is increased for the brand as well. Seeing others promote or engage with a brand helps develop more customers for the brand. A social media presence is necessary to increase sales, and it is also of less cost than traditional marketing (Pribanic, 2020). Brand management is poised to become only more important as the twenty-first century progresses. It also promises to become even more diverse, changing to meet the evolving future needs of all businesses and organizations.

Terms & Concepts

Brand Equity: The value a brand adds to the intrinsic value of a product or service or the overall financial value associated with a brand's market strength. Brand equity takes into account all of a brand's various assets and liabilities. It is largely determined by the consumer and by the value the consumer places on a particular brand.

Brand Identity: Ideally created by a brand management team, brand identity ultimately refers to the unique set of characteristics and associations that a brand evokes in the mind of the consumer.

Brand Manager: A professional mid-level manager responsible and accountable for supervising all aspects relating to the management of one brand.

Competitive Advantage: A firm possesses this when it sustains a profit that exceeds the average profit of its industry competitors.

Corporate Brand Personality: The human personality traits associated with a company. Also, a company's values, purpose, and mission. The brand personality should be apparent in the marketing of all company products and services; it should be exuded by all company employees.

Functional Brand Management: A style of brand management in which functionally specialized professionals supervise one aspect of brand management across all of an organization's brands.

Internal Brand Management: The job of managing how employees at all levels of an organization relate to the organization's brands.

Product Differentiation: Marketing a product in such a way as to allow consumers in the target market to differentiate the product from its competitors.

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Suggested Reading

Burmann, C. & Zeplin, S. (2005). Building brand commitment: A behavioural approach to internal brand management. Journal of Brand Management, 12, 279–300. Retrieved March 19, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=16515522&site=ehost-live

Hankinson, G. (2007). The management of destination brands: Five guiding principles based on recent developments in corporate branding theory. Journal of Brand Management, 14, 240–254. Retrieved March 19, 2007 from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=24245775&site=ehost-live

Hatch, M. (2006). The hermeneutics of branding. Journal of Brand Management, 14(1/2), 40–59. Retrieved March 19, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=23521029&site=ehost-live

King, C. & Grace, D. (2006). Exploring managers' perspectives of the impact of brand management strategies on employee roles within a service firm. Journal of Services Marketing, 20(6/7), 369–380. Retrieved March 19, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=23357533&site=ehost-live

Reppel, A., Szmigin, I., & Gruber, T. (2006). The iPod phenomenon: Identifying a market leader's secrets through qualitative marketing research. Journal of Product & Brand Management, 15(4/5), 239–249. Retrieved March 19, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=22868389&site=ehost-live

Uggla, H. (2013). The nature and scope of brand portfolio signals within brand portfolio management. IUP Journal of Brand Management 10, 7–16. Retrieved November 24, 2014, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=91675189

Uggla, H. (2004). The brand association base: A conceptual model for strategically Leveraging partner brand equity. Journal of Brand Management, 12, 105–123. Retrieved March 19, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=14975918&site=ehost-live