The impact of the brand management system on performance across service and product-oriented activities

Abstract

Purpose This paper aims to analyze the impact of brand management system (BMS) practices on subjective and objective performance in both service- and product-oriented sectors. Design/methodology/approach Based on a “grounded-in-practice” approach to BMS, a comprehensive formative BMS scale is developed and its validity is assessed. The impact of BMS on subjective brand performance (i.e. predictive validity) and on objective financial performance is assessed. Data are collected from a sample of 298 brand managers and marketing directors in five business sectors (cosmetics, convenience goods, industry, bank/insurance and media) and from a financial database. Path analysis and multigroup analysis are performed to test mediating and moderating effects. Findings The results reveal that subjective brand performance (perceived brand performance) mediates the relationship between the BMS and objective financial performance of the firm and on each of the three BMS dimensions; and product-oriented (vs service-oriented) sector positively moderates the relationship between the BMS and subjective brand performance. Research limitations/implications The paper offers insights into adapting brand management practices along all BMS dimensions to achieve better business performance and improve objective financial performance in product-oriented activities. It highlights the role of brand management implementation, as well as the role of brand management in hierarchical relationships, in improving performance in service activities. Practical implications The formative BMS scale offers a tool which can be used to improve strategic decisions and give practical guidance on product vs service sector specificities. The indirect impact of a BMS on financial objective performance reinforces the legitimacy of brand managers and marketing managers. Originality/value This paper shows the impact of the BMS on objective financial performance by using a “grounded-in-practice” BMS scale. It also affords explanation on sectoral effects of brand management practices and their consequences on subjective and objective performance.