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Some analysts see brands as the enduring asset of a company, outlasting the company’s products and facilities. Brands are powerful assets that must be carefully developed and managed. Here are some key strategies for building and managing brands.
Brand equity is the differential effect that knowing the brand name has on customer response to the product and its marketing. It’s a measure of the brand’s ability to capture consumer preference and loyalty. A brand has positive brand equity when consumers react more favorably to it than to a generic or unbranded version of the same product. It has negative brand equity if consumers react less favorably than to an unbranded version. High brand equity provides a company with many competitive advantages. A powerful brand enjoys a high level of consumer brand awareness and loyalty. Because the brand name carries high credibility, the company can more easily launch line and brand extensions. A powerful brand offers the company some defense against fierce price competition.
Building Strong Brands:
Branding poses challenging decisions to the marketer. The major brand strategy decisions involve brand positioning, brand name selection, brand sponsorship, and brand development.
• Brand Positioning:
Marketers need to position their brands clearly in target customers’ minds. Positioning refers to the act of designing the company’s offering and image in such a way that it occupies a distinctive place in the minds of the target customers. A brand can be better positioned by associating its name with a desirable benefit. Some successful brands positioned on benefits are Volvo (safety), FedEx (guaranteed on-time delivery), Nike (performance), and Mercedes Benz (quality).
Starbucks. For example: Fair & Lovely. After that. iPod. passion. • Brand Name Selection: A good name can add greatly to a product’s success. part art and a measure of instinct. They are positioned on strong beliefs and values. The brand name should be distinctive: Lexus. the target market.Figure 1 Major Brand Strategy Decisions The strongest brands go beyond attribute or benefit positioning. and excitement surrounding a brand. It should be easy to pronounce. and Kingfisher rely less on a product’s tangible attributes and more on creating surprise. However. Brands such as Cadbury. recognize. . and remember: Tide. Indica. naming a brand becomes part science. Nirma. It begins with a careful review of the product and its benefits. finding the brand name is a difficult task. Desirable Qualities for a brand name: It should suggest something about the product’s benefits and qualities. Apple. and proposed marketing strategies.
Licensing. Store brand sales are growing much faster than national brands. National brands have long dominated the retail scene. retailers have many advantages. and continuous quality improvements. an increasing number of retailers and wholesalers have created their own Store Brands (or Private Brands). To compete with store brands. as Sony sells its output under its own brand name. National Brands versus Store Brands. • Brand Sponsorship: A manufacturer has four sponsorship options. It should be capable of registration and legal protection. thereby appealing to the budget-conscious shopper in all of us. It should be extendable: Amazon. however. . A brand name cannot be registered if it infringes on existing brand names. Retailers often price their store brands lower than comparable national brands. The product may be launched as a national brand. leading brand marketers must invest in R&D to bring out new brands.com began as an online bookseller but chose a name that would allow expansion into other categories. what prices they charge. new features. They control what products they stock. In recent times. Some companies license names or symbols previously created by other manufacturers. And they must find ways to “partner” with major distributors in a search for distribution economies and improved joint performance. For a fee. where they go on the shelf. In the so-called battle of the brands between national and private brands. Or the manufacturer may sell to reseller who gives the product a private brand. names of well-known celebrities. any of these can provide an instant and proven brand name. Finally two companies can join forces and co-brand a product. or characters from popular movies and books. and which ones they will feature in local circulars.
multi brands. socks. and other marketing efforts. • Brand Development: A company has 4 choices when it comes to developing brands. Co-branding offers many advantages. Co-branding partners must carefully coordinate their advertising. For example. Co-branding has also limitations. or flavors of an existing product category. Finally. Co-branding. brand extension. colors. Thus. one company licenses another company’s well-known brand to use in combination with its own. Line Extensions. ingredients. and several others like monsoon wear. Because each brand dominates in a different category. premium shoes. sales promotion. It can introduce line extension. the combined brands create broader consumer appeal and greater brand equity. Such relationships usually involve complex legal contracts and licenses. when co-branding. sizes.Name and character licensing has grown rapidly in recent years. or new brands. such as Citibank and Jet Airways joined forces to create the Jet Citi Travel Card. Line extensions occur when a company extends existing brand names to new forms. sports shoes. Bata-one of the oldest footwear brands in most countries-has expanded its footwear line to include regular shoes. Co-branding occurs when two established brand names of different companies are used on the same product. . Licensing can be a highly profitable business in many companies. each partner must trust that the other will take good care of its brand. In most co-branding situations. financial services firms often partner with other companies to create co-branded credit cards. sandals.
A company might introduce line extensions as a low-cost. The extension may confuse the image of the main brand. and none may be very profitable. It also allows a company to lock up more reseller shelf space. The company may end up spreading its resources over many brands instead of building a few brands to a highly profitable level. Multi branding offers a way to establish different features and appeal to different buying motives. It also saves high advertising cost usually required to build a new brand name. and Maggi Soups. An overextended brand name might lose its specific meaning. A major drawback of multi branding is that each brand might obtain only a small market share. Or it might want to meet consumer desires for variety. At the same time. And if a brand extension fails. low-risk way to introduce new products. There is risk that sales of an extension may come at the expense of other items in the line. . You will be surprised. Thus. A brand extension gives a new product instant recognition and faster acceptance. Hindustan Unilever and Proctor & Gamble market many different brands in each of their product categories. just go to the nearest supermarket or store and find out how many variants of Lux soap you find. or simply to command more shelf space from resellers. Brand Extensions. it may harm consumer attitudes toward the other products carrying the same brand name. A brand extension extends a current brand name to new or modified products in a new category. For example. Companies often introduce additional brands in the same category. Multi brands. Maggi Tomato Ketchup. New Brands. to use excess capacity. a brand extension strategy involves some risk. You can pick from an array of any of these variants of Lux. Nestle has leveraged the strength of its Maggi brand to launch several new lines: Maggi Noodles.
Major brand marketers often spend huge amounts on advertising to create brand awareness and to build preference and loyalty. offering too many new brands can result in a company spreading its resources too thin. consumers and retailers have become concerned that there are already too many brands. targeted toward small transporters or those who have just started their transport business. The company must put as much care into managing these touch points as it does in producing its ads. The brand’s positioning will not take hold fully unless everyone in the company lives the brand. First. Even better. word of mouth.A company might believe that the power of its existing brand name is needed. For example. brands that need to be dropped. However. brand knowledge. the brand’s positioning must be continuously communicated to consumers. Finally the companies need to periodically audit their brand’s strength and weaknesses. or . but also personal experience with the brand. customers come to know a brand through a wide range of contacts and touch points. Therefore the company needs to train its people to be customer centered. And in some industries. Tata Motors created the separate Ace brand. the fact is that brands are not maintained by advertising but by the brand experience. such as consumer packaged goods. with too few differences between them. Such advertising campaigns can help to create name recognition. These include advertising. and many others. company web pages. the company should carry on internal brand building to help employees understand and be enthusiastic about the brand promise. As with multi branding. The brand audit may turn up brands that need more support. Managing Brands: Companies must manage their brands carefully. Today. and may be even some brand preference. Or it may create a new brand name when it enters a new product category for which none of the company’s current brand names are appropriate.
• Product line branding strategy: Here. The major drawbacks are product cannibalization if consumers cannot differentiate clearly among product brands and involves higher advertising and promotion budget and is totally self-supporting with little or no brand name assistance or assurance from the parent. . TYPES OF BRANDING STRATEGIES There are a few approaches on brand building strategies: 1) Product branding 2) Product-line branding 3) Product-range branding 4) Corporate branding 1. personality. Here the brand line comes under the hair-care category but the different line extensions cover complementary applications of essentially the same product. the products appear under the same brand name and possess the same basic identity but with slightly different competencies for example Follow Me line of hair shampoos. • Product branding strategy: This type of brand give each individual product an exclusive brand name and the company name being ignored It allows the brand to have unique values. • • • • 2. By doing so. identity and positioning. it implies that every new product the company brings on to the market is a new brand and can be positioned precisely for a specific market segment It has the advantage of making it easier for the company to evaluate brand performance and worth and allows better resource-allocation decisions.brands that must be rebranded or repositioned because of changing customer preferences or new competitors.
individual product brands can move across to line brands as companies find ways of extending the brand to different consumer groups or segments. The line helps defend the category from predatory attack. Hence. Product range branding strategy: A number of products or services in a broad category are grouped together under one brand name and promoted with one basic identity. C and A class and Intel’s Pentium and Celeron ranges of microprocessors. . Compared to product-line branding. Here the product brand is self supporting in practically every respect but retains the assurance of the corporate brand endorsement. The basic principle is that the companies believed that the company name is the life of an enterprise. Therefore the advantage here is that a single brand name allows some economies of scale in advertising and promotion as the products tend to carry the same overall brand values and positioning. E. product-range branded products carry out the basically the same functions but at different performance levels like various cars in the Mercedes S. Sony. This type of corporate branding is also called house or endorsement branding. Companies using this approach – IBM. Here the product is not branded individually or as strongly as the corporate brand. Virgin. The second approach which is becoming popular whereby the product brand name has a high profile but is endorsed by the parent company which gives the product a stamp of quality and credibility. Corporate branding strategy: • • Two approaches in the corporate brand exercises First is to promote its name as the main brand name sometimes referred to as monolithic or umbrella branding. Nestle uses this approach to protect and guarantee the performance of their multitude products. 3.• Advantages therefore are economies of scale in advertising and promotion and each new line extension strengthens the position of the brand and therefore its image. • • 4.
the company name helps to give them an assurance of quality. . heritage and authenticity BRAND PIRACY: Brand piracy refers to counterfeiting of popular brand names in the international market. Brand piracy takes place in case of outstanding brands where people are brand loyal.• Also suitable for companies engaged in service industries as their products are more intangible in nature. It is common in case of consumer goods and consumer durables. When consumers cannot see the products.
IMITATION: Imitation means copying a popular brand. symbols. this is done on purpose by a company to mislead consumers and gain some market share. • Popular brands of MNCs from developed countries commands goodwill in the market and generally people tend to become brand loyal. Brand piracy is the act of naming a product in a manner which can result in confusion with other better known brands. For example:A Seiko watch may be copied as reiko watch . FAKING: Faking means copying a popular brand with minor unnoticeable differences. Oftentimes. Counterfeiters capitalize on such loyalty by pirating the brand name in one or the other way. be it layout. For example:Many manufacturers produce jeans in India and put a label of Calvin klien on it. REASON FOR GROWTH OF BRAND PIRACY: • The laws in some countries where counterfeiting of brand names is done are not strict. It can occur with either partial integration of the name of the better known brand. 2. Forms of brand piracy: 1. The copies often have logos that resemble the design of the genuine product.When a product is named similarly to a well-known brand so that consumers may mistake it for the actual brand-name. Brand piracy is common among products that can easily be replicated. color or font. or simply by changing the spelling of the product's name. • Technological knowhow required to produce a counterfeited product is easily available.
. RE EMPTION: In countries where law permits wholesale registration of brand names. a counterfeiter may register a large number of well known brands in his name and then sell such brand names to those interested in counterfeiting.3.
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