Brand Management: Research, theory and practice

tigates what signals are the most efficient to reveal the unobserved product qual-
ities of a brand. The brand name, packaging or placement can help reveal unob-
served product qualities and communicate important marketing messages to the
consumer. Promotion is a tool that has been heavily used and researched in the
economic approach. The accessibility of scanner panel data has made research
into the short- and long-term effect that promotion has on sales a key topic not
only in research but also in practice in many sales and marketing departments.

Core theme: the economic brand

The premises of the economic brand is hence that it operates in a market, that the
consumer is assumed to make primarily rational consumption decisions, and the
interactions with consumers are standalone isolated events rather than an ongoing
relationship. These premises make the utility attributes the brand has to offer
judged against its price relative to competitors, level of awareness and recog-
nition, and last but not least, the accessibility of the brand essential for whether or
not a brand will be successful.

Summary

The theoretical building blocks of the economic approach consist of two
supporting themes: transaction cost theory and the concept of the marketing mix.
Transaction cost theory describes the barriers that can impede transactions taking
place according to the principles of the invisible hand and the economic man. It
also describes the economic perspective on exchange between brands and
consumers as isolated events, where money and goods are exchanged. The
primary aim is to achieve the next transaction by eliminating or breaking down the
barriers that inhibit the transaction from taking place. These barriers to transac-
tions must be overcome. The tool used in the economic approach to overcome
these barriers is the marketing mix, or the Four Ps. Using the toolbox of the Four
Ps can ensure that the right product is available to consumers at the right price, in
the right locations, and that it is promoted by using advertising and promotion to
make consumers aware of and interested in purchasing the product.

The economic approach 39

Supporting theme:

Marketing Mix

Supporting theme:

Transaction Cost

Core theme:

The Economic Brand

Figure 4.4Core theme and supporting themes of the economic approach to brand
management