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Strong brands are one of the key elements in achieving competitive advantage (Zablah, Brown, and Donthu 2010). Research points to several advantages for companies that possess high brand equity, where one of them are customers’

favorable reactions to marketing efforts of a firm, i.e. customers’ subjective and intangible assessment of the brand exceeds its objective and perceived value (Keller 2008). Also, companies representing strong brands can experience customers’ inclination to pay price premiums, and an increased likelihood to engage in positive word-of-mouth (Bendixen, Bukasa, and Abratt 2004). Due to the advantages mentioned above, companies experience increased purchase rates, which means that the impact of competitive brands also positively affects

decision-makers’ and investors’ evaluation of performance. Studies show that investors incorporate the value of brands in their stock evaluation, as they are treated as assets that generate future cash flows - which means that improvements in brand equity will have a significant, and positive effect on firm valuation (Srinivasan, and Hanssens 2009, 306). In essence, marketing resources have been shown to be highly important in the contribution of a firm’s performance (Hooley, Greenley, Cadogan and Fay 2005, 18).

However, even though a large body of research has established the importance of brand equity, and its positive impact on investors’ and customers’ evaluations and decisions - few investigate how companies internally should devote and focus their initiatives and investments. Specifically, little attention has been devoted to how organizations internally should manage their brands. Keller (2008, 333), the recognized author within the field of strategic brand management, stresses the concern that “perhaps one of the biggest threats to brand equity comes from within the organization.” Kim and Lee (2007, 77) add to the point, stating that a high percentage of firms lack a system, or model for measuring brand equity. The somewhat problematic area in relation to the management of brands can be attributed to intangible nature of the assets. That is, the management of brands is contingent upon sufficient recognition, safeguarding, and support - in line with that of tangible means (M’zungu, Merrilees and Miller 2010).

The importance of internal factors are recognized, and treated as key ingredients in the successful management of brands (de Chernatony and Cottam 2006). This

means that companies have a lot to gain by capitalizing on their internal brand-related activities and initiatives. On the subject, a brand management system (hereby referred to as BMS) has been proposed as a key factor - defined as a “set of any systems, organizational structure, or culture of a firm supporting brand-building activities” (Santos-Vijande, Belén, Suárez-Álvarez, and Díaz-Martín 2013, 148; Lee, Park, Baek, and Lee 2008, 849). That is, the establishment of a BMS can ensure the necessary internal structures, and procedures that help to grow, and sustain brand equity (Kim and Lee 2007). Among businesses behind successful brands, a common and determining factor has been the holistic, yet integrated approach to branding, and where high brand literacy among employees have contributed to a tacit organizational culture that competitors not easily can copy (de Chernatony and Cottam 2006). The scarce literature within the area of strategic brand management, Santos-Vijande et al. (2013) found that possessing a BMS in a service context positively impacts customer performance, and business performance. Additionally, the study shows that both innovativeness, and market orientation act as important facilitators to the BMS (Santos-Vijande et al. 2013).

For companies it can be challenging to operate in a highly competitive marketplace with changes in the macro-environments. This implies that firms cannot solely rely on existing practices and capabilities to survive in this environment, but rather adapt adequately to the circumstances. Specifically, the BMS has been regarded as a dynamic capability, which is defined as “the firm’s ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments” (Santos-Vijande et al. 2013, 150; Teece, Pisano, and Shuen 1997, 516). Moreover, we argue that it is also important to evaluate the specific factors in the BMS’s surroundings that could threaten or nurture its development. This study aims to improve the understanding of the facilitators and impediments of the BMS that exist in the internal and external environment of an organization. To our knowledge, no research has fully explored what can positively, or negatively impact the BMS - and this is what our study contributes to. We argue that more knowledge in this area can help companies in the process of its development, and ultimately improve their performance.

For clarity, the research questions of this paper can be defined as follow:

1) What facilitates and prevents firms from developing a BMS, and how does this impact customer performance?

2) How does the BMS ultimately impact a firm’s performance?

Specifically, the objectives of this study are:

1) To test the effects of the facilitators: innovativeness, market orientation,

centralization, formalization, horizontal integration, communication, reputational assets, and competitive intensity on the BMS.

2) To test the effects of the impediments: specialization, and short-term orientation on the BMS.

3) To test the effects of the key variables: innovativeness, market orientation, specialization, and short-term orientation on customer performance.

4) To test the effect of the BMS on customer performance.

5) To test the effect of customer performance on business performance.

Among the interesting relations investigated, this thesis particularly demonstrates the importance of considering the design of organizational structure, and its compatibility and impact on the BMS. Also, in the holistic treatment of the external environment to the BMS, we show how reputational assets act as a catalyst to its development. The results indicate that management's philosophy, and approach through market orientation, and short-term orientation are positive sources to the BMS. Interestingly, this study partially contradicts the previous finding of Santos-Vijande et al. (2013) on the specifics of how innovativeness impacts the BMS. We demonstrate, and argue for important managerial differences and characteristics to be aware of in the context of Norwegian manufacturing firms. Finally, the previous established relationships between the BMS, customer performance, and business performance are confirmed.

This thesis is organized as follows; first, we provide a literature review with the proposed hypotheses, and where the suggested relationships are summarized in a conceptual model. Next, we outline the method section with our chosen research design, context of study, and measure development. After the section of data examination, and measurement model testing, we outline important decisions regarding our estimations for the measurements models. Next, after a description

of our measurement model, and structural model, we provide the analysis and results of our study. In the last section, we discuss our findings, provide

managerial implications, and highlight limitations to our study and suggestions for future research.