Unpacking brand management superiority : examining the interplay among brand orientation and market-linking and controlling mechanisms

The importance of building brands with high levels of brand equity is widely acknowledged by scholars and practitioners alike. Such strong brands enable firms to generate stronger earnings and provide firms with a much stronger defensible position. Given these benefits, it is not surprising that building a strong brand remains a top priority for many businesses. However, achieving this end is not without its challenges as the industry is permeated with instances of branding failure (e.g., Harley Davidson Perfume, Colgate Kitchen Entrees and Heinz Cleaning Vinegar) and brand value fluctuation (e.g., Toyota and Honda). In parallel with these brand management issues, the literature offers limited empirical insight into how firms approach the fundamental yet challenging task of managing a brand in an effort to achieve higher levels of brand equity. The underlying objective of this study is to unpack the black box of realising brand management superiority and investigate the specific process through which firms achieve higher levels of brand equity. To this end, the role of brand orientation has been highlighted in the literature given its capacity to orient firms towards the adoption of a greater branding focus by lending strategic significance to the brand and its management. However, brand orientation alone may not be the panacea that ensures firms are managing brands effectively to maximise brand equity. It does not provide (1) the market-linking mechanism that renders the firm externally relevant and appropriately linked with customers through the brand and (2) the controlling mechanisms that generate the sense of consistency fundamental to branding to facilitate the development of customer-linking branding actions. Drawing on the resource-based view of the firm (RBV) and survey data from a sample of businesses operating in the consumer goods sector, this study shows that the influence of brand orientation on brand equity is indirect through brand management capability. Also, underpinned by the theory of marketing control, this study finds that formalisation and brand-specific transactional leadership (TRL) are conducive to enhancing the influence of brand orientation on brand management capability, while departmentalisation weakens this effect. The incorporation of these findings into an integrative, mediated moderation framework further indicates that the interactive effects of brand orientation and (a) formalisation, (b) departmentalisation and (c) brand-specific TRL on brand equity are mediated by brand management capability. In light of these findings, several critical insights that advance knowledge and theory on brand management are offered. First, it is not brand orientation per se that contributes to higher levels of brand equity. Instead, brand orientation serves as the foundation upon which firms develop brand management capability to use the brand as the basis of interaction with customers and achieve higher levels of brand equity. Second, while formalisation and brand-specific TRL have often been maligned in the literature for their rigid and creativity-stifling nature, their controlling influence is critical in the context of branding. They help to generate the sense of consistency fundamental to branding and provide the critical conditions that facilitate brand management capability development. Third and critically, while brand orientation and specific controlling and market-linking mechanisms may be individually necessary, their interplay is the key that unlocks the black box of achieving brand management superiority.