Application of System Dynamics to Brand Management

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Application of system dynamics to brand management 18th International system dynamics conference Bergen,Norway, August 6-10, Bergen,Norway, August 6-10, 2000 2000 Management of brands is a highly complex business task. For many brand owning companies (from Coca-Cola to Amazon) brand value is the key driver for the company’s overall strategy. Brand value may be considered from a number of viewpoints. One insightful starting point is to recognise that brand value is linked to preferential choice for the brand. This may be for customers (“I will chose brand X over Y, Z etc.”) but can equally apply to other stakeholders (employees, partners, shareholders etc). Brand management is about competing for preferential choice among all stakeholders. Choice is affected by a host of factors both internal and external to the business. Internal factors will span the organisation and successful brand management requires a systemic perspective. Many companies now have good tools to manage and control operational processes and the cost side of brand management. Few companies have processes to manage what is classically termed intangibles and the ‘intangiblydriven’ consumer processes that are the fundamental components of the revenue generating part of brand management. Arguably, competitive advantages in the intangibles can create substantial value and 'hard to copy' processes for the companies that apply this successfully. In the past these processes have been hugely complex to understand, decode, and quantify. Therefore, brand management has been dealt with intuitively and with inappropriate management focus justified by poor understanding of the causality between drivers and outcome over time. The use of the Strategy Dynamics approach, System Dynamics simulation modelling and Systems Thinking to support the development of more informed brand strategies has proved to be very

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