4 The economic approach
The economic approach is the first approach of this book and the approach upon
which all the consecutive approaches in brand management rest. Since the
economic approach describes the first approach to brand management, and hence
the foundation for how brands have been (and are) managed, it is important to
understand the line of thought underlying the economic approach. Since the
Learning objectives
The purpose of this chapter is to:
Understand the assumptions of the economic approach- Consumers base consumption decisions on rational parameters and the
exchange between brand and consumer is perceived to be linear, func-
tional and transaction-based
Understand the theoretical building blocks of the economic approach - The supporting themes – transaction theory and marketing mix theory –
make up the core theme: the economic brand
Provide insights into the methods of the economic approach - The economic approach primarily uses quantitative methods to explore
how the management of marketing mix variables affects consumer
brand choice
Understand the managerial implications - The Four Ps can help the brand manager plan and execute a brand
strategy within the economic approach - The strengths and weaknesses of the economic approach and the key
points of critique to which the economic approach has been subject