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2 Brand Management Facilitation: A Systems Dynamic Approach For Decision Makers Peter A. Otto J. Robert Bois A Conceptual Framework MIT 20 April 2001

3 Why Do We Care About Brand Management? Complex task, unstructured, involves a lot of different variablesComplex task, unstructured, involves a lot of different variables DynamicDynamic Outcome of decisions often unknown, “Voodoo marketing”Outcome of decisions often unknown, “Voodoo marketing” Financial implication of decision makingFinancial implication of decision making

4 Definition of a Brand? “ A brand is a complex symbol. It is the intangible sum of a product’s attributes, its name, packaging, and price. Its history, reputation, and the way it’s advertised. A brand is also defined by consumers’ impressions of the people who use it, as well as their own experience.” David Ogilvy

5 Brand Management Some 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

6 Brand Equity Source: Interbrand 1999, The World Biggest Brands

7 The Brand Management Model

8 Brand Management A Conceptualized Sector Overview The Brand Awareness/Effectiveness Sector The Brand Awareness/Loyalty Sector The Brand Loyalty/Quality Sector

9 Vensim® Brand Awareness/Effectiveness Sector

10 Vensim® Brand Awareness/Loyalty Sector

11 Vensim® Brand Loyalty/Quality Sector

12 The Bottom Line: Brand Equity

13 Brand Management: A Vensim® Demo

14 Where To Next Simulation of Effectiveness with real data:Simulation of Effectiveness with real data: Above the LineAbove the Line Below the LineBelow the Line Price PromotionPrice Promotion Public RelationsPublic Relations Testing Brand Strategy Implications against other DSS toolsTesting Brand Strategy Implications against other DSS tools

15 R

16 End of Slide Show Press “Esc” to Exit

17 The Brand Awareness/Effectiveness Sector

18 The Brand Awareness/Loyalty Sector

19 The Brand Loyalty/Quality Sector