Brands make up a large part of the value of many successful companies. Yet with a few honorable exceptions, managing brands remains more an art than a science. To be sure, the instincts and judgment of experienced managers have an important part to play, yet such things are hard to communicate and discuss. As a result, brand management decisions often absorb a lot of energy without producing much in the way of insight.
But what if the instinctive wisdom of seasoned marketers could be articulated and quantified—if, in other words, art could be turned into science? We sought to do just that by marrying classic marketing techniques with two approaches: the resource-based view of the firm,1 a concept that treats firms as collections of strategic resources, and business dynamics, a methodology that takes a systemic view of management issues.
Business dynamics allows managers to document com-plex systems and model their dynamic behavior using special software. Armed with the resulting models, managers can determine which levers to pull to modify a system’s behavior. In some cases, the results have confirmed managers’ instincts; in others, they have yielded surprising insights, such as the futility of copying best practice. Their most...