Lecture notes Brand Management
Lecture 1: what are brands and how important are they?
How important are brands? (Fischer et al., 2010) Brand relevance
Scale development paper: the authors introduce a construct and they try to provide a measure for that
construct, test the validity and publish that paper for the measure to be used by others.
A three-item scale: all related to how important is the brand/brandname when buying
• Brand plays an important role
• Focus mainly on the brand
• Important to buy a brand name product
Two drivers of Brand Relevance in Categories:
Risk reduction: brand signals quality. In some categories this is more important than in others. E.g., in
categories where they are uncertain or when quality is important, is plays a bigger role.
Social demonstrance: symbolic & social function. A brand is not only a quality indicator but a brand can
be an indicator of a certain style or an indication of your identity, personality. This driver is often less
important, but it is still relevant in most categories.
Brand relevance differs per category, but there are also differences between countries. They use the
category specific measure in order to advise managers in different categories.
How important are brands? (Fischer et al., 2010)
Table 5A from the paper:
, - Shows you some examples of how important brands are in different countries. The brand
relevance in category for 5 countries + the risk reduction and social demonstrace in those 5
countries.
- They calculated a latent construct (sort average of all categories) to measure the importance
across categories and look at differences between countries. The saw that in the US people find
brands more relevant than in the UK. The risk reduction and social demonstrace are most
important in the US.
Table 5B: compares different goods
Table 5B: they also examined the differences between categories. They used a latent mean (from all
countries) as an input and then made comparisons.
- Brand relevance is highest for durables and services, lower for FMCG and even lower for
retailers
- Risk reduction and social demonstrance is higher for durables and services, lowest for retail and
FMCG
Correlates:
• Risk > social demonstrance (but: self-report)
• risk is usually more important than social demonstrance; but be careful because social
demonstrance is self-reported; people who are less inclined to say that brands are
important, will give lower scores. Risk reduction is more easy to talk about than to admit
that you have social demonstrance function.
• Risk: increases with age; F > M
• Social decreases with age (more certain about how you are; less inclined to search for brands
that confirm your identity)
Other variables
• Visibility (+); the more visible the product is, the more important brands are to consumers, has
to do with social demonstrance function.
• Functional homogeneity (+);
• Ability to judge quality ex ante (-); the easier it is to judge the product behorehand, the lower
the BRiC/brand relevance is. This has to do with the risk reduction.
• New product introductions (+); # of brands (+);
Lecture 1: what are brands and how important are they?
How important are brands? (Fischer et al., 2010) Brand relevance
Scale development paper: the authors introduce a construct and they try to provide a measure for that
construct, test the validity and publish that paper for the measure to be used by others.
A three-item scale: all related to how important is the brand/brandname when buying
• Brand plays an important role
• Focus mainly on the brand
• Important to buy a brand name product
Two drivers of Brand Relevance in Categories:
Risk reduction: brand signals quality. In some categories this is more important than in others. E.g., in
categories where they are uncertain or when quality is important, is plays a bigger role.
Social demonstrance: symbolic & social function. A brand is not only a quality indicator but a brand can
be an indicator of a certain style or an indication of your identity, personality. This driver is often less
important, but it is still relevant in most categories.
Brand relevance differs per category, but there are also differences between countries. They use the
category specific measure in order to advise managers in different categories.
How important are brands? (Fischer et al., 2010)
Table 5A from the paper:
, - Shows you some examples of how important brands are in different countries. The brand
relevance in category for 5 countries + the risk reduction and social demonstrace in those 5
countries.
- They calculated a latent construct (sort average of all categories) to measure the importance
across categories and look at differences between countries. The saw that in the US people find
brands more relevant than in the UK. The risk reduction and social demonstrace are most
important in the US.
Table 5B: compares different goods
Table 5B: they also examined the differences between categories. They used a latent mean (from all
countries) as an input and then made comparisons.
- Brand relevance is highest for durables and services, lower for FMCG and even lower for
retailers
- Risk reduction and social demonstrance is higher for durables and services, lowest for retail and
FMCG
Correlates:
• Risk > social demonstrance (but: self-report)
• risk is usually more important than social demonstrance; but be careful because social
demonstrance is self-reported; people who are less inclined to say that brands are
important, will give lower scores. Risk reduction is more easy to talk about than to admit
that you have social demonstrance function.
• Risk: increases with age; F > M
• Social decreases with age (more certain about how you are; less inclined to search for brands
that confirm your identity)
Other variables
• Visibility (+); the more visible the product is, the more important brands are to consumers, has
to do with social demonstrance function.
• Functional homogeneity (+);
• Ability to judge quality ex ante (-); the easier it is to judge the product behorehand, the lower
the BRiC/brand relevance is. This has to do with the risk reduction.
• New product introductions (+); # of brands (+);
