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Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 7 (56) No. 2 - 2014


Raluca-Dania TODOR

Abstract: The present paper’s main purpose is to establish a conection

between branding, rebranding and the efforts of developing a strategic
marketing plan. Today’s reality shows us that the quality of products or
services alone, can not ensure companies success anymore. Because of that
a lot of companies willing to obtain high profits, on national or international
markets, have to consider branding eforts as a necesity and not as an option.
Furthermore, even if the company’s efforts give birth to a successful brand,
time and market changes may lead to the erosion of brand’s image, forcing
that company to rethink the hole branding strategy and proceed to

Key words: branding, rebranding, strategic marketing.

1. Introduction discipline that consists of a lot of work

planning, with clear objectives to achieve
Technological development will on the long term.
continue to level the competitors, so it will
become increasingly difficult and uncertain 2. Objectives
the success based only on product quality.
Therefore, the focus is increasingly more The paper tries to demonstrate the
on the brand which should bring additional connection between the importance of
benefits, imposing companies aspirations, branding strategy and the strategic
guiding the brand to what it wants to marketing.
become, with a permanent opening to the Thus we can say that branding strategy
multitude of possibilities that may arise has crossed the border of product
along the way. strategies and became in time an important
Raising the level of branding to an component in strategic marketing. The
academic initiative by creating Marketing most important thing is that a company can
Science Institute in 2002, led to huge not create a coherent strategy without a
changes in the theoretical and applied areas clear objective. A brand can not function
going beyond traditional product and without a strategy and the strategic
service theory. marketing’s role is to implement this
In essence, the strategy of branding is a strategy of branding or 'brand building'.

Transilvania University of Brasov.
60 Bulletin of the Transilvania University of Braşov • Series V • Vol. 7 (56) No. 2 - 2014

The main role of branding strategy lies in alleged link between capital brand and
obtaining long-term sustainable stock quote since the two days crisis in
competitive advantage. October 1997, during which strong brands
Since the market is ultimately the (eg General Electric, Microsoft, Intel) have
supreme judge of these advantages, recovered losses by the end of the day, and
strategic branding must be approached companies with weak brands have failed
very carefully and subtle because the offer recovering [3].
will be positioned in the consumer's mind Also, some universities have formally
to produce the perception of advantage. studied the connection between branding
strategy and financial performance of the
3. Considerations regarding branding company. Kerin and Sethurman studied
several companies on the list of most
Perhaps the most well known and valuable companies (list compiled annually
complex definition of brand is formulated by Interbrand), and have reported a
by Interbrand as being: 'A set of tangible positive link between branding strategies
and intangible attributes, symbolized by a and financial values of the company [9] .
trademark (name, logo, etc.) which Using standardized market values and
operated properly, creates value and dependent variables, they demonstrated
influence. The term value has various that brand strength, as measured by an
means: the promise and the fulfillment of evaluation program, explains 25% of
an experience (in terms of marketing), variations in the market value of a
guarantee of earnings in the future (in company. Gruca and Rego explored and
terms of management) and is regarded as a demonstrated empirical measurements and
distinct component of intellectual property a link existing between satisfaction, brand
(legal perspective)'. loyalty and brand strength, capital and
Branding infrastructure has advanced liquidity of the company [7].
enormously, giving rise to various types of The value of a brand denotes positive
entities, ranging from branding consultants differentiation effect on recognition of the
to true conglomerate specialized in brand that has on customer reaction to the
architecture and brand identity [5]. With product or service in question.
intangible assets now accounted for, on As such, ' brand equity ' refers to an
average of 75% out what investors are intangible asset that depends on the
placing a firm, data arising from various associations the consumer is making.
brand evaluations conduct to the ideea that There are at least three perspectives from
we have entered in the golden era of which this concept can be analyzed [11]:
branding [10]. • Financial Perspective. One way to
The literature abounds with references assess the ' brand equity ' is to determine
regarding the powerful connection between the price premium that a ' brand ' has for a
a brand and performances of the capital generic product.
stock of a company. As demonstrated by • Brand extensions. A brand’s success
Interbrand, a strong brand can bring added can be used to launch additional brands,
value of 5-7% in share prices of some related to it. Benefits are related to the
companies and can minimize losses in case extension of the concept of 'brand
of massive devaluation. awareness ', the new product, which is
A study led by Corporate Branding launched with reduced advertising costs.
Partnership LLC, a branding consulting Also, it will gain easier consumer
firm in Connecticut, corroborated the confidence.
R-D. TODOR.: The Importance of Branding and Rebranding for strategic Marketing 61

• From the consumer. A 'brand' develop new competitive products for

strongly encourages positive consumer specific groups of buyers and exhibit
attitudes towards product/service. This distinctive qualities from those of
attitude is built by experience with the competitors, thus ensuring a sustainable
product/service. Therefore, samples are competitive advantage. It includes
more effective than advertising. 'Brand functions that logically and
awareness' leads to the perception of chronologically precede production and
quality, defining attributes and finally to sales process like: analysis of internal and
brand loyalty. external environment of the company,
Competitive advantage can be achieved setting goals and marketing strategies,
by two major pathways: low cost target markets, pozitioning, product
(combined with acceptable quality ) or design, pricing, establishing distribution
differentiation. Since only one brand can channels, establishing a communication
be the cheapest, and physical attributes are strategy and promotion .
easily copied (imitated) currently, it means Strategic Marketing has the following
that the best choice is differentiation to characteristics:
compete in current markets. Branding a. The decisions have long-term
strategy is therefore a path of action consequences;
concentrated in the differentiation process b.Environmental monitoring is done
of an organization or product / service in (which is considered dynamic and
the mind of the customer [8]. complex) to quickly identify
During the occurrence and crystallization opportunities and unfavorable
of the concept of brand strategy, managers situations;
inside the marketing department were the c. Create synergies between activities that
ones who retrive those tasks.However, as form the value chain;
the strategic concept becomes a d.adopt a proactive perspective on the
fundamental part of the capital value of a environment;
company, it was unapropiate for a single e. stimulates continuous creativity and
department to be responsible for the entire innovation in the company;
implementation process. f. identify strategic areas of attractive
In conclusion, the responsibility of activities .
implementing branding strategy has shifted Increasing the role of strategic marketing
to higher hierarchical levels of many in the decision making process of the
companies / organizations. company was driven by a number of
Therefore, branding strategy, as part of environmental changes:
strategic marketing, must include all levels - acceleration in the diffusion of
of the organization and marketing and it technical progress
will be more successful when all relevant - maturation and fragmentation of
internal and external departments are markets
actively involved in the process [4]. - increasing the internationalization level
of markets
4. Branding strategy – part of strategic The rapid evolution of technology requires
marketing rapid changing product portfolio and
continuous analysis of the markets.
Strategic marketing is the process of Fragmentation of mature markets and the
systematic and permanent review of emergence of consumer groups with specific
market needs and it helps company to needs and requirements impose a strategy of
62 Bulletin of the Transilvania University of Braşov • Series V • Vol. 7 (56) No. 2 - 2014

market segmentation possible only on the develops strategies that main

basis of detailed information. These changes competitors have not developed and
contributed to the strengthening of strategic have not applied at the same time.
marketing in the company, and made These strategies bring current and
possible some operational directions: potential benefits to the company
fundamenting activities on solid and clear because competitors can not duplicate
strategic options, developing certain systems them.
for permanent monitoring of the ƒ Profitability above average- applying
environment and the competition, strategic angle of approach to the
strengthening the capacity to adapt to market, investors will be satisfied as
environmental changes, regular renewal of projected turnover and profit rates
the product portfolio. will range in the optimistic scenario.
Strategic marketing has two components: All aspects of strategic marketing
the strategic analysis and the strategic principles must be reflected in overall
decision branding strategy. Otherwise, it will be
Conceptually, the two notions (branding very easy to install a feeling of confusion,
and strategic) are intrinsically linked, both visual and concerning other
branding is in its essence a strategic perceptions of the brand. The strategy
decision that follows through its structure gives concentration and targeting to the
to achieve several key objectives. brand, preparing the necessary platform for
Other considerations to be taken into marketing management in the process of
account when developing a branding gathering the outcomes from brand’s
strategy and strategic move to consistency and related activities.
implementation stage, as that market "Marketing is building a brand in the
structure is always dynamic and not static. mind of a consumer. If you can build a
From this point of view, establishing a strong brand, you have a powerful
rigid course of action will not allow any marketing program. If you can not, then no
organizational or operational flexibility, advertising, no creative packaging nor all
with disastrous effects on today's sales promotions and public relations in the
markets. If branding strategy does not take world will not help you reach your goals”
into account the strategic adaptation to [12]
market requirements and has a rigid In the brand’s portfolio there are many
trajectory in relation to history and brand roles that certain brands can play [2] :
standards, then the company can get in a • strategic brand
situation where the brand is exceeded or • energizing brand or 'silver bullet'
used in relation to the market and beat in • adjacent brand
relation to other brands. • cash cow brand
Branding objectives, from strategic The most important thing is that the roles
marketing perspectives, may focus on are not mutually exclusive. A brand can be
these elements: both strategic and energizing and after a
ƒ Strategic Competitiveness- goal while it is possible to migrate to the cash
achieved when the company manages cow.
to successfully formulate and Strategic brand is of vital importance for
implement a strategy that creates the organization. It is a brand that was
value planned to succeed, and from this point of
ƒ Sustainable competitive advantage- view will need all the funding from the
goal achieved when the company organization in order to fulfill his role.
R-D. TODOR.: The Importance of Branding and Rebranding for strategic Marketing 63

5. Rebranding strategy. to approach the rebranding strategy and

appears the alternative of qiving up that
If branding strategy is a particularly brand. Among the conditions that would
complex and difficult target to achieve, the favor market exit for a brand decision are
rebranding has an even higher degree of [1]:
difficulty because it has a higher degree of - The rate of decline for that brand is rapid
risk in terms of the possibility of confusion and the continues to grow and the demand
among consumers. is decreasing
In terms of strategic marketing, rebranding - It is anticipated extreme price pressure
becomes necessary when: from competition, due to the lack of brand
– The brand has a confusing image or the loyalty and lack of product differentiation
image is nonexistent in the mind of the buyer
– The main benefit of the brand has - The position of the brand is weak and
transformed from a differentiating there are competitors that have gained
benefit in a cost one. major and irreversible advantages. The
– The company alters, through various business is losing money and the
strategic marketing and management perspectives are not good.
errors, the direction that was planned. - The company mission is changed
– The company is entering a new - Certain obstacles can not be overcome.
business and current position is no Rebranding decision must in such
longer adequate circumstances, be very well grounded on
– A new competitor with higher position an detailed analysis of the brand
is targeting the same market characteristics. It may also arise the
– Competition sabotaged 'brand' possibility that even if the brand registers a
company and turned it into an decline and begin to lose some customers
ineffective mechanism (they are at the edge of the target
– The renewal of organizational culture market/segment), brand loyalty and buying
requires at least a review of the brand rates remain stable amoung the other
personality buyers [6].
In many cases rebranding decision
– The company wants to widen the
proved to be very unstable, managements
action area of the brand, but the current
of many companies faced with the opposite
position does not allow addressing new
results than the ones expected and planned.
target segments (can intervene diluting
Puma, Apple and Gucci are some of the
brand image)
brands that have passed successfully
David Aaker identifies other factors that
through the action of rebranding process.
involve a rebranding strategy within the
These companies have bequeathed some
company [1]:
golden rules in the strategic marketing
ƒ The target segment becomes saturated
decision on rebranding, mainly with the
ƒ New associations are needed to
things they did NOT do [13]:
generate growth
- They didn’t changed the name or logo;
ƒ The target market ages
- Did not announced by any media channel
ƒ Product obsolescence due to
that they are about to reposition or do
technological attrition
something radical to brand owned;
Though before taking the decision to the
- They were very patient, each brand has
rebrand, the company must make a
taken them a decade or even more to
strategic analysis that will straighten or not
the final decision. Aside from the decision
64 Bulletin of the Transilvania University of Braşov • Series V • Vol. 7 (56) No. 2 - 2014

- The changes they have made were done 4. Chernatony, L.: A Model for
in their departments without the help of Strategically Building Brands. In:
external specialists; Journal of Brand Management 1
- No strategists hired from outside the (2001), Vol.9, p.32-44.
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but they did it with their own resources; Brand’s Destiny. In: Brandweek 43
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process. Prescription. In: Journal of
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