Customer Centered Brand Management – Rust, Zeithaml, Lemon
Customer-centered brand management consists of growing consumer equity and striving for loyalty and retention in well-maintained consumer relationships. However, despite the posturing about focusing on the consumer needs, there remains a continued emphasis on the brand at the expense of potential growth for the company as a whole. This brand driven strategy is because for many companies the brand identity is the reason for existence and dictates the decision making process and the accountability of the managers.
Rust, Ziethami and Lemon argue putting brands in the service of growing consumer equity and suggest seven tactics for achieving long-term consumer-centered marketing. These include 1. customer segment managers replace traditional brand managers; 2. targeting the brand to the narrowest possible segment; 3. developing customer hand-off from brand to brand in a company; 4. recalculating brand equity based on individual consumers; 5. planning brand extensions around consumer needs; 6. taking no heroic measures in maintaining struggling brands; and most importantly, 7. making brand decisions subservient to decisions about customer relationships.
Throughout the article, the consumer attributes take precedent over brand attributes and the understanding of consumer need and matching it to the brand rather than managing the brand’s overall perception is important. The more individual the connection is for the consumers in a segment the better the brand can perform.
The three authors discuss failed brand scenarios such as General Motor’s Oldsmobile and Volkswagon’s Phaeton based on these seven tactics and compare them to successes from Honda’s Accura and WiLL. Other examples could include those given by Collins in his assessments in the book Good to Great. He discusses a number of factors, including focusing on what the company can do best and focusing on delivering it to the consumer effectively. Examples include Nucor Steel that understood what its consumers wanted out of a steel company and was able to execute it when its competition, such as Bethlehem Steel, had lost sight of its customers needs. Similar comparisons are made between Walgreens and its competitor Eckard as Walgreens focused on the best store it could for the consumer Eckard diversified itself loosing sight of consumer needs in the process. The depth of Collin’s studies can be seen in his preceeding book Built to Last which discusses even further the depth of consumer driven initiatives by companies and how a lack of long-term customer relationships can effect brands and their parent companies.
Rust, in another article with Bell, Deighton and Schwartz entitled “Seven Barriers to Customer Equity Management,” discusses viewing customers as assets and site the example of Unilever’s brand portfolio being narrowed from 1,800 to 400 and the brand management being centered on a “Customer Re-Connect Strategy.” It enabled marketing tools to be more directly accountable for their intended results with the consumers rather than existing to function for the brand. The article further explains how brands can become more consumer focused through customization, loyalty and frequency programs and other customer asset based programs while dissecting the challenges to executing these initiatives. In the case of Unilever, better segmented products appealing to consumer needs allowed unsuccessful brands to be fazed out and the remaining brands to become more focused on fulfilling a consumers individual need.
Consumer behavior theory dictates how to impose an effective consumer-centric model for band management. Each of the seven steps proposed by Rust, Ziethami and Lemon represent any number of theories regarding a customer’s relationship with a brand.
The relationship with brands can be seen in the 2003 study by George Baltas “Combined Segmentation and Demand Model for Store Brands,” in which he investigates the consumer characteristics of those preferring either store or manufacturer brands and examines their effects in the light of behavioral data. The end result is an understanding of the individual’s perception and personality data in addition to traditional demographic and usage data and helps create segments for each brand based on customer value rather than product attributes or intended image.
The integration of the marketing mix within the aspects of consumer behavior is based upon a firm understanding of the consumer. The segment managers would manage the products rather than the brand manager according to the article. The article argues brand managers work to increase the value of the property they manager, at times in direct contrast to the brand’s actual value to the consumer. By using segment manager who manage the consumers rather than the brand image, consumers are matched to the right brand in portfolio thus making the brand a function of the consumer need rather than vice versa.
This theory then dominates the convergence of the other six concepts proposed in the article and follows several assumptions put forth by studies by David Marsden in “Deconstructing Consumer Behavior; Theory and Practice.” Marsden’s research discusses the interrelationships between consumer behavior theory and the relationships between consumers and their actual consumption habits. The ideas presented here follow a similar pattern of recalculating brand equity based on individual consumers presented by Rust.
Although some segments can be created based on demographic, psychographic, utilitarian and other models, some consumer behavior can simply not be segmented. The discussion of segmentation and the issues that come by Palmatier, Dant, Evans and Greenwal in their research further explores assumptions of segmentation and how to match brands to consumers. These barriers are also confirmed by Bell, Deighton, Rust and Schwatz. In both assessments, it is deemed important to determine the extent to which individualization can occur for a particular product in a particular segment in determining the positioning of the brand to the consumer. This falls in line with Rust’s assessment in targeting the brand to the narrowest possible segment
The social and psychological factors of the consumer that may influence product purchase are discussed by Bloch and Richins. Their article’s theories are also in line with those proposed by Rust and his researchers about the individual consumer’s need and perception of the product by the consumer as it relates to how markets can manage the brand. Bloch and Richins suggest that strategy should be enhanced by differentiating between the forms of product-importance perceptions mirroring making brand decisions subservient to decisions about customer relationships by Rust.
In the end, the assumptions put forth in “Consumer-Centered Brand Management”
Baltas, George, “A Combined Segmentation and Demand Model For Store Brands” European Journal of Marketing, Vol 37(10), 2003. pp. 1499-1513, Emerald UK Publishing.
Bell, Deighton, Rust and Schwatz, “Seven Barriers to Customer Equity Management,” Journal of Service Research, Vol 5 (1), 2002, Sage US Publications.
Bloch, Peter and Marsha Richins, “A theoretical model for the study of product importance perceptions” Journal of Marketing, Vol 47 (3), 1983, pp. 69-81, US Marketing Association.
Collins, Jim Good to Great, 2001 Harper Collins Business.
Marsden, David, “Deconstructing Consumer Behavior,” Journal of Consumer Behavior, Vol 37(10), 2003. pp. 1499-1513, US: John Wiley & Sons.
Palmatier, Dant, Evans and Greenwal, “Factors Influencing the Effectiveness of Relationship Marketing,” Journal of Marketing, Vol. 70 (4), 2006, pg 1, Chicago Press.
Rust, Zeithami and Lemon, “Customer-Centered Brand Management” Harvard Business Review, Vol. 82 (9), 2006, Pg. 110, Harvard Press, Boston.