activities should be based on the identification of consumer needs and wants
which are very much in line with the widely accepted brand management theory.
The thoughts behind the economic approach serve as the foundation for brand
management and from here the discipline develops into still more complicated
theories of consumer behaviour and brand consumption. One can say that the
following approaches all accommodate the shortcomings of the economic
approach as they each explain a specific brand and consumption perspective not
accounted for in the economic approach.
Summary
The value of the tools of the economic approach for the planning and implemen-
tation of marketing plans short-term are, however, great and a prerequisite in
brand management, but the strategic value and potential for brand building of the
marketing mix tools is questionable. The economic approach is hence a suitable
planning and execution tool in brand management, but it cannot stand alone, if one
wishes to reap the full potential of brands and brand management reflecting how
consumers in the new millennium consume brands.
Student questions
1 What theories are the theoretical building blocks based on?
2 How is the consumer perceived to consume brands in the economic approach?
3 Which elements are key for the creation of brand equity in the economic
approach?
4 What are the strengths and weaknesses of the marketing mix?
5 What methods are primarily used to explore the brand in the economic
approach?
6 Why is the economic approach perceived not to deliver sufficient theoretical
tool for the management of brands today?
References and further reading
Key readings are in bold type.
Ackerman, F. (1997) ‘Consumed in theory: alternative perspectives on economics of
consumption’, Journal of Economic Issues, 31 (3): 651–64
Ailawadi, K. L., Lehman, D. R. and Neslin, S. A., ‘Marketing response to major policy
change in the marketing mix: learning from Procter & Gamble’s value pricing strategy’,
Journal of Marketing, 65 (1): 44–61
Bath, S. and Reddy, S. K. (1998) ‘Symbolic and functional positioning of brands’, Journal
of Consumer Marketing, 15 (1): 32–43
Borden, N. (1964) ‘The concept of the marketing mix’, in G. Schwartz (ed.) Science in
Marketing, New York: Wiley
Bucklin, R. E., Gupta, S. and Han, S. (1995) ‘A brand’s eye view of response segmentation
in consumer brand choice behavior’, Journal of Marketing Research, February 66–74
The economic approach 45