The brand as a system

Similarly to what happens in the field of navigation or aerospace transportation, strategic brand management requires advanced guidance tools to support decision making in environments of high complexity.

High performing brands distinguish from the rest by showing superior levels in three main indicators: recognition, market positioning and reputation. Each of those variables are at the same time an open complex system comprised of other variables whose status and interactions ultimately determine those performance levels. This complex set of effects encloses the keys to understanding the improvement or decline of the variables that we set as main targets.

In complex systems, there’s no single solution to a problem but joint actions that produce better outcomes under given conditions. So far, scientific brand management was an impossible task inasmuch as the variables involved are either tangible or intangible. A vast amount of possible combinations of effects and delays make the behaviour of these systems highly unpredictable. Thanks to science of complex systems combined with Fuzzy Logic techniques and evolutionary algorithms, we can model with Zio ® SD the main variables involved in a strategic branding issue. Our techniques can incorporate existing data from our clients (reputation studies, surveys, etc) along with expert knowledge.

Our models incorporate variables from our competition and the external conditions. Thus we get a scenario sensitive to internal or external interventions. Then we can explore what-if scenarios, executing simulations to know in advance the outcome on the system that would have certain actions focused on a few variables over time.

Main uses and applications

The modeling of each system provides, regardless of the given problem, an overview of our brand and the environment in which it operates. This knowledge is in itself of great value as far as it helps us to understand how things are related, why they occur, and reveals the keys to success of the sector of activity itself.

Using this knowledge, the first use is to diagnose the state and strength of our brand in relation to the main market players.

From here, the simulation capabilities of the software allows us to develop scenarios with strategic actions and to run them comparatively to see the different future outcomes. Thus we can understand which are our most effective levers or which tasks are not worth the effort. In turn, (given some constraints such as budget, size, positioning, etc,) we can block the action of these variables so that we force the artificial intelligence engine to tell us which are the best actions that we should carry out with the other variables.

The transparent and flexible nature of the system implies that important decisions of a strategic nature can be shared by the management team. In this way, the level of internal consensus is maximized as each person is able to understand the costs, limitations and conditions necessary to achieve a given goal.

Given the dynamic nature of the model, Zio ® SD becomes the ultimate tool for monitoring and continuous management of the brand. It allows for the incorporation of real-time values to assess their long-term effects, making it the perfect tool for managing crises or counteracting actions carried out by the competition.

What is the level of accuracy of the models

The models are, by definition, reductions of reality and it is therefore crucial to pick the most relevant aspects of the given problem. However during a certain amount of time they behave almost like machines so we can predict de evolution of out target variables with high precision. Using a calibration algorithm that operates on historical data, we are able to get an accuracy of over 90% in the total system, and close to 98% in the target variables. This is a good starting point to mitigate potential random factors introduced by the effects of the variables left out of the model. That said, the projections have an extremely high rate of accuracy, especially regarding identify trends.

Major advantages over other modeling techniques

Compared to linear models, system dynamics combined with fuzzy logic operates like real life with randomness, nonlinear relationships, cycles, and delays. But the definitive quality of Zio ® SD that makes it the perfect tool for brand management, is its ability to incorporate customer information based on quantitative and qualitative data and expert knowledge. This feature makes it fully compatible with other analysis methodologies and market research techniques.
Strategic branding
There has never been a greater amount of information about customers and the market, however, key aspects in the purchase and decision making processes still remain obscure.

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