Introduction
Within what has been defined as the Brand Management paradigm, Louro and Cunha97 identified four different perspectives. (See Figure 4). These can be differentiated along two analytical dimensions: Brand centrality (the extent to which brands constitute the core elements guiding and configuring a company´s strategy); and Customer centrality (the nature of consumer involvement in the process of value (co)-creation. These dimensions reflect central themes present in the branding literature concerning the strategic importance of brands and the differential degrees of customer and company participation in defining brand meaning and value.98,99,100
All of them represent a particular view of the role of consumers and brands in the process of value creation.
Figure 4. Brand Management Paradigms (Louro and Cunha)
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97 Louro and Cunha (2001) p. 855
98 Kapferer (1992)
99 Aaker (1996)
100 De Chernatony and Dell’Olmo Riley (1998)
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With unilateral approaches the internal characteristics and actions of the company are the determinants of value creation101 and consumers are conceptualised as a passive audience.102
On the other hand, multilateral perspectives emphasise the interdependent nature of value. Consumers are viewed as sources of competence and co-developers of personalised experiences103 and brand value and meaning is continuously co-created, co-sustained and co-transformed through organisation-consumer interactions.104
The product paradigm (‘the product, the product the product’)
The product paradigm reflects a tactical approach to brand management where brands are mere instruments to perform company-centred roles. Under this perspective brand performance is measured by financial, business and product-based criteria.105 The strategy for generating superior performance is based on the identification, creation and protection of favourable product market positions.
An effective positioning derives from the fit between a company’s generic strategy on cost leadership, differentiation and focus and industry conditions.
Therefore the creation of sustainable competitive advantage is determined by the company’s capacity to align its portfolio of core resources and capabilities with its specific value proposition.106
Although this perspective is still common in brand management, it presents important limitations. These include the possible failure to differentiate a
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101 Kotler, Philip et al. Marketing Management. London: Prentice Hall, 2009, p. 861.
102 Prahalad, Coimbatore K., Ramaswamy, Venkat. "Co-creation experiences: The next practice in value creation." Journal of interactive marketing. Vol. 18 (2004b), no. 3, p. 8.
103 Prahalad and Ramaswamy (2004b) p. 10
104 Rindova, Violina P.; Fombrun, Charles J. "Constructing competitive advantage: The role of firm-constituent interactions." Strategic Management Journal. Vol. 20 (1999), no. 8, p. 691-710.
105 De Chernatony, Dall’Olmo Riley and Harris (1998)
106 Porter (1985)
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company´s value proposition and its assumption that consumer behaviour is rational.107
The projective paradigm (‘the monologue’)
Within this perspective the brand meaning is created as a company
‘monologue’108 (unilateral creation) and the competitive advantage is sought through differentiation.109 The focus of this perspective is brand identity, as a set of brand associations that the company aspires to create and maintain.110
Although this approach to the product paradigm is advancing, it contains a major limitation. The brand identity created by the company is the exclusive
determinant of brand meaning and the result of the consumer creation of brand significance (brand image) is not incorporated into the equation.111 Therefore it fails to account for the active role of consumers in the (co)-creation of brand meaning.
The adaptative paradigm (‘the listening’)
This paradigm stresses the role of consumers as central constructors of brand meaning. Under this approach brands are understood from an output
perspective, and brand images are defined as “consumer perceptions of a brand as reflected by the brand associations held in the consumer’s memory”.112
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107 Aaker, David. Building Strong Brands. New York: Free Press, 1996.
108 Aaker, David. "Managing Assets and Skills: The Key to Sustainable Competitive Advantage".
California Management Review. Vol. 31 (1989), no. 2, p. 91-106.
109 Porter (1985)
110 Aaker (1996), p. 68
111 De Chernatony and Dall’Olmo Riley (1998) p. 419
112 Keller, Kevin Lane. Strategic Brand Management. Building, measuring and managing brand equity.
Prentice-Hall International (UK) Limited, London (1998) p. 49.
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Brands, therefore, perform consumer-centred roles. They facilitate decision-making, reduce risk, reduce research cost and are signals for quality and provide symbolic meaning.
In this approach, competitive advantage is understood as the result of a company´s ability to generate customer satisfaction, which means an external perspective within a particular competitive context.113
Although the adaptive paradigm focuses on the consumer´s evaluative processes, it fails to demonstrate how companies configure brand value.114
The relational paradigm
The relational paradigm solves the weaknesses of both the projective and the adaptive paradigms as it conceptualises brand management as an on-going dynamic process without a clear beginning and end. Brand value and meaning is co-created through interlocking behaviours, collaboration and competition
between organisations and consumers.115
Therefore brands are constructed as personalities that evolve in the context of consumer-brand relationships. They are also active symbolic partners that co-define the relational space, where the relationships between companies and consumers are brand-mediated. Consumers have an active role in the co-construction of brand meaning and value.116,117
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113 Kotler (2009)
114 Louro and Cunha (2001) p. 865
115 Louro and Cunha (2001) p. 865
116 Fournier, Susan. "Consumers and their brands: Developing relationship theory in consumer research."
Journal of consumer research. Vol. 24 (1998), no. 4, p. 343-373.
117 Prahalad and Ramaswamy (2004b)
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The relational paradigm has implications for practitioners, in that “brand
management becomes a dialectical process in which multiple entities (consumers and companies) espouse opposing theses (brand image and brand identity) co-construct brand value and meaning (synthesis).118
The relational paradigm goes further than a brand management orientation. From the concept of “informationalism”, a new social system successor to capitalism an industrialism in which the main source of productivity is the qualitative capacity to optimize the benefits of knowledge advantage through information utilisation derives a new social structure based upon the network. The diffusion of networking logic substantially changes production, experience, power and culture, where “the power of flows takes precedence over the flows of power”.119
The relational paradigm is taken as main view of brand management in this study. It consistent with the purpose and focus of this research and allows the construction of a model process of value co-creation from a competitive advantage perspective.
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118 Van de Ven and Poole (1995) in Louro and Cunha (2001) p. 866.
119 Jevons and Gabbott, (2000) p. 619
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