Brand Management Prognostications

The role of brands and the ways of managing brands are changing. The authors review how brands aid the buyer and seller and, by focusing on the customer-oriented functions of brands, offer insight into how brand management is evolving.

Factors propelling changes in brand management include:

1. Information technology. By simplifying customer search and by enabling retailers to collect real-time information about individual shoppers, IT shifts power away from consumer goods manufacturers and their brand managers.

2. Maturing consumer values. Changing demographics ensure that future markets will consist of experienced buyers. Skeptical of superficial blandishments, they seek to understand the relationship between quality and price, aided in their search by technology.

3. Brand mimicry and brand extension. An abundance of copycat or extension products degrade the brand as a marketing tool, confounding a consumer's attempts to differentiate among products.

4. Autonomy of retailers. Trade concentration, exemplified by supermarket retailing, is shifting the "center of marketing gravity" to retailers who are managing for product category profitability.

The authors propose three scenarios for the future of brand management:

In Scenario 1, current trends continue. Copycat and brand-extension products diminish as pressure on all but the leading brands increases due to restricted shelf space. Companies emphasize "umbrella" branding at the corporate and product-family levels; brand managers begin working on cross-functional teams organized around categories or processes.

Scenario 2 is at least partially in place in some companies. Simplified brand and organizational structures focus on trade customers with whom manufacturers develop joint strategies.

Scenario 3 differs radically from the past. By using increasingly economical, IT-based techniques, firms identify customers individually, enabling them to organize and manage customers rather than brands or products.

The key lesson is that managers should focus on the dynamically evolving functional patterns of brands rather than on the brands themselves.