The New Strategic Brand Management

The Brand as a Contract

For better or worse, brands have come to symbolize modern societies, nations and even religions. As brands have assumed more prominence, they have been recognized as tangible assets that can enhance corporate value and benefit an ongoing business. As a result, companies should manage their brands the same way they manage other profit centers.

In the 1980s, corporate managers began to realize that brands have financial and strategic value, as well as emotional and cognitive associations. A brand can enhance itself over time, since it grows as its product or service grows. The product embodies the brand and becomes the main way that customers evaluate it. Successful brands build over time as product quality grows and the manufacturer’s reputation expands. When the marketplace bestows a value on a brand name - so the name itself influences purchasing choices - the brand has achieved the status of being able to generate images in consumers’ minds. This expands the brand. A brand gains power when people trust what it can deliver and share the same ideas about it.

A brand’s ability to produce profits stems from three components: