The economic approach

The economic approach is the first approach of this book and the approach upon

which all the consecutive approaches in brand management rest. Since the

economic approach describes the first approach to brand management, and hence

the foundation for how brands have been (and are) managed, it is important to

understand the line of thought underlying the economic approach. Since the

The purpose of this chapter is to:

Understand the assumptions of the economic approach • Consumers base consumption decisions on rational parameters and the

exchange between brand and consumer is perceived to be linear, func-

tional and transaction-based

Understand the theoretical building blocks of the economic approach • The supporting themes – transaction theory and marketing mix theory –

make up the core theme: the economic brand

Provide insights into the methods of the economic approach • The economic approach primarily uses quantitative methods to explore

how the management of marketing mix variables affects consumer

brand choice

Understand the managerial implications • The Four Ps can help the brand manager plan and execute a brand

strategy within the economic approach • The strengths and weaknesses of the economic approach and the key

points of critique to which the economic approach has been subject

economic approach is more comprehensible and not as complex as some in the

consecutive chapters, this chapter is somewhat shorter than the other approach

chapters and focuses more on the background and assumptions of the approach. It

is important to understand this background in depth because understanding the

background will enable the reader to get a good idea of the strengths and weak-

nesses of the economic approach as well as understand the foundation for the other

approaches in brand management.