“A brand is name, term, sign, symbol or design or a combination, intended to identify the goods or services of one seller and to differentiate them from those of competition” American marketing Association 1960. A brand is name, symbol, logo, design or image or any combination of these, which is designed to identify product or service. Kotler et al, 1999
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Brand distinguishes a company’s product from its competitors and an identified product or service that closely satisfies customer’s needs and wants. Brand is an asset to a company and reflects the quality of customer service. Branding is all about the customer’s trust of the product or service and makes the segmentation easier for the company. The difference between a company and its competitors should be communicated by brand, because it makes a company unique. BMW, Toyota, Luis Vuitton, NEXT, Debenhams, Nike and Coca Cola are the well-known brands that command price premium and stimulate deep customer’s loyalty.
“Branding is the collection of actual and emotional characteristics associated with a particular identified product or service that differentiates it from the rest of marketplace”
Hand-out notes by tutor Anthony smith
Branding is an important aspect of marketing to build a strong image of a company. Mercedes Benz is an automobile brand that commands a premium with their engineering, performance, quality, customer service and after sales service. Toyota shares all these characteristics but still they were not positioned as premium in the customers mind. Toyota then created “Lexus” as a premium brand with the collaboration of both Toyota and Lexus shared engineering, design elements and customer service.
“Brand architecture refers to the hierarchy of brands within a single company. It is the interrelationship of the parent company, subsidiary companies, products, and services, and should mirror the marketing strategy”.
“How an organization structures various products, services or other entities within its portfolio and how they relate to one another”.
In the growing economy we can see different companies merging with each other and form the strategy for each of the targeted group in which every product can carry its own brand name. Good and clear brand architecture leads a company towards brand positioning and also helps to get sustainable competitive advantage.
There are three different types of brand architecture strategies.
Corporate/Monolithic Branding Strategy
In this strategy company takes on a unified brand for all product categories and targeted market. This strategy creates simplicity, and cost deficiencies can be achieved as opposed to multi-branding architecture, in which a corporate brand plays a smaller role.
Microsoft, Intel, Disney, CNN, SONY, Nike, Virgin and coca cola etc. are the best examples of corporate branding. Corporate banding makes the advertising easier for the company as they just advertise their name and slogan. . Coca cola is recognizable in every continent of the world through its red curved bottle and logo. SONY is a corporate brand as its name is attached to everything, from its DVD’s to play station.
The founder of SONY, Akio Morita, once said: “I have always believed that the company name is the life of an enterprise. It carries responsibility and guarantees the quality of the product”.
Therefore corporate strategy leads a company to sustainable financial outcomes.
Multi/Individual Branding Strategy
“Multi Brand Strategy refers to a marketing strategy under which two or more than two similar products of a firm are marketed under different brand names.”
It is very difficult for a brand to position itself in a diversified environment where the customer’s needs and wants are different. Therefore, company can fill different market segments through diversifying its product range. VW, P&G, Unilever and Diageo are the best examples of multi branding. P&G is the prime example, having a multiple shampoo brand to influence different customers, like head & shoulder for dandruff, Pentene for healthy hear and Sassoon for professional saloon experience. Through multi branding a company can target more than one segment in the market and fill the price gaps. Multi branding is a good strategy but sometime it fails because of the poor management. Due to failure it could harm the family brand name.
VW took many years to change the negative brand image of “Skoda” from the customer’s mind. Helen Meek. et al, 2001
“A brand that carries the endorsement of a source brand (the parent company)”.
Endorsements add integrity and assurance of the indorsed sub brand in customer’s mind without overpowering it with its own association. Endorsed branding is suitable for the company, using varied product portfolio, e.g. Nestle, Cadbury, Unilever etc.
Nestle written on the Kit Kat, Cadbury written on Dairy Milk to provide credibility and assurance to the product.
Some companies give independence to the endorsed brands like Unilever give freedom to the Heartbrands such as Feast, Magnum and Cornetto and they have their own marketing campaigns and target market. Some companies has firm relationship between company name and product, e.g. Ford does it with the model Mustang, people using either the brand name Mustang or the full name Ford Mustang.
“Brand elements are those trademarkable devices that identify and differentiate the brands”. There are certain elements of a brand, like names, logos, symbol, characters, slogans, design, features etc. some important elements are mentioned below”.
Kotler et al, 1996
Name is the most significant element of the brand. This is the only part of the brand which should never be changed. It help customers to identify distinguish product from competitors. It is not necessary the brand name is associated with the company and can be different. But if the brand name is linked with the quality of the product either high or low, then all good must be of the same standard. M&S is the prime example of providing quality products through ‘St Michael’ Brand as one can see its tag on the cloths and food and household goods as well.
Brand image is fundamental way through which a customer recognises and believes a brand. It gives a company an identity and creates a better image in the mind of the customers. Brand image is unique that clearly reflects the image of the organisation and different from the competitors. To build a right image in the customer’s mind, the company must have to focus on brand identity.
Brand personality is the goodwill of the brand. It is associated with the benefits and attributes of the brand. Brand personality is unique and long lasting; it is the emotional attachment of the consumers with the product, e.g. Sony and Panasonic, both are the giants of electronic sector, although both got same features, some peoples prefer one of the other because of their trust on the product by long time.
“Brand association is the relative strength of consumer’s positive feelings towards the brand”
Lasser et al, 1995
“Associations, according to Aaker (1991) represent the bases for purchase decisions and for brand loyalty”.
“The way consumers perceive brand is a key determinant of long-term business-consumer relationships. Hence, building strong brand perceptions is a top priority for many firms today”.
It is the perception of the customers towards a brand attributes and quality. Brands can be associated with the name, colours, symbols, attitudes, expressions and sound etc. Mercedes Benz is associated with the luxury drive and excellent engineering, Nike with its Slogan, Nokia with its sound, and Coca Cola with its red colour, Colgate toothpaste with cavity protection and Microsoft with Bill Gates.
Renault has launched a successful campaign for its model Clio and used the famous French footballer Thierry Henry and Sesame Steet in the ‘Va Va Voom’ advertisement. This campaign resulting attract more male customers than females. This is how celebrity’s association to the brand benefits organisation.
Kotler et al, 1996
Brand association gives the basis of buying and brand loyalty to the customers. Companies always try to associate their brands with the positive things to create good image of the product in the mind of customers.
Brand association developed if the product is desirable, durable and satisfies the customer’s needs. Positive customer’s perception about the product makes a brand stronger. It is formed on the basis of Product attributes, Advertisement, Relevant price, Quality, Celebrity and big entity association, Competition and Display points.
“Positioning is the place in consumer’s mind that you want you brand to own”. For example, Hallmark caring shared, and Disney Family Fun entertainment”.
“Positioning is not what you do to a product; positioning is what you do to the mind of the prospect”.
Ries and Trout, 1981
Brand positioning is successfully built through continuous communication with the customers about the product to its targeted market, through advertisement, brand name and its packing.
Brand positioning refers to the position in the customer’s mind, it does not relate to market position. Brand positioning is associated with the market segmentation. The right market segment is to be targeted for the brand positioning. Brand positioning is all about a customer’s perception about the product. There are certain ways for a brand to be positioned, e.g. offering specific benefits, targeting a specific segment, pricing and distribution.
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Brand positioning is an important concept in which a company can decide where it wants to position its brand in its field relative to competition. Brand positioning is a thinking that guides a company to build a relationship between the brand and customers. Brand positioning gives space in the customer’s mind, so the company become in the better position to control over its own brand image.
Price and quality are the most common attributes are considered in the brand positioning. To get a good position in the customer’s mind the company introduce brand of a good quality with on competitive price. The quality of the product must be at least equivalent or better from the competitors.
Quality perception is the most powerful element of the brand positioning. Once a company is successful in building a powerful perception of quality will result in building a powerful brand. Psychological element is dominant to some extent in building a quality perception as some people’s psyche is that the product with high price tag is of good quality.
Communicating brands through their specific features is another way to position brands, e.g. Clinic all clear, “Dare to wear Black” or Pakistan and India surf excel is advertised as stain remover, “Surf Excel hena”. Culture is another strong aspect to the brand positioning. Different companies use cultural symbols to differentiate products from their competitors. Examples including, Air India advertise through ‘Maharaja’, Tata tea, ‘Hamara Bajaj’ etc.
“Brand extension is a marketing strategy in which a firm that markets a product with a well-developed image uses the same brand name but in a different product category”.
“When a firm uses its brand in another product form, or even within another product class, then the firm is ‘stretching’ the brand (also referred to as brand extension)”.
Virgin is the good example of brand extension as they sell everything from records to airline travel, to cola drinks to wedding parties from clothing to cosmetic and computers. This is successful in brand extension because it has the ability to connect the customer directly and give them values.
Many firms attempt to extend their brands but all the brand extensions are not suitable or desirable. An extended brand always works best in a top to down direction. It is always easy for a company to bring brand extension from relatively cheaper product line. ‘Ralph Lauren’ and ‘Gucci’ are the best example. ‘Ralph Lauren’ extended from luxury clothing to jeans and bed linen while ‘Gucci’ brand is extended from luxury clothes to oven gloves, cooking aprons and dog toys. An extended brand has a low introductory cost because the customers, traders and retailer are well aware of the product. Brand extension brings options to the customers through variety of products. If the product is of lower quality, will result in damaging in overall brand value.
Caterpillar is one of the biggest non-sporting footwear companies in the world with its brand CAT. This is basically a construction and mining equipment manufacturing company that extended their brand in this potential segment. It was perceived that it is the biggest mistake of the caterpillar but the extension was a big success.
Sometimes the brand extension, implemented incorrectly due to less understanding. ‘LEGO’ is a Danish toy manufacturing company, decided to extend its brand and launched its own product line of cloths, watches and video games but it was ignored by its target market, that result half of its employee are redundant back in 2004.
Kotler et al, 2001
Michelin and Goodyear are the French companies, famous for making ‘rubber tyres’ and having a number of brand extensions. Michelin brand extensions are car and cycle related product, footwear and clothing, sports and leisure and personal accessories. On the other hand Goodyear becomes the partner of the Adidas to make a series of driving shoes.
Kotler et al 2001
We can see normally financial services providers have not attempted to extend their brands, and only concern with their original market. On the other hand, there are too many non-financial service providers extended directly to the financial services. E.g. Tesco extended its market to Tesco banking and Tesco insurance.
Benefits of branding
People buy brands, because they are well aware of the quality of the product and save time and efforts. Buying a branded product can give customers a peace of mind and credibility. Most of the branded products have warranty policies, which gives customers assurance of a quality product. Some big companies having product replacing policies, e.g. ‘DeWalt’ a power tool manufacturing company, replace the product immediately in case of damage.
There are certain benefits of branding to different stakeholders, that directly/indirectly effecting the organisation.
Multinational organisations always have the strategy for social, environmental and economic issues. Companies contribute to the societies in which they operate. Brands follow government regulations to minimise any adverse effect to the environment.
Employees always attract to innovative companies where learning opportunities are always there.
Supplying goods directly to retailers, companies distribute goods through agents or distributers. Distributers get long-term agreements from the known brand companies.
Retailer can get benefits from overall marketing campaign.
Sustainable competitive advantage
When two or more firms compete within the same market, one firm possesses a competitive advantage over its rivals when it earns (or has the potential) to earn a persistently higher rate of profit.
It is very important for every organisation to be successful in long term. Effective corporate branding is certainly the main source of getting sustainable competitive advantage in the market. World’s famous corporate brands do not sell products, they sell concepts, e.g. Coca Cola does not sell a soft drink, it sells enjoyment and Microsoft does not sells computers, it sells possibility.
Brand designers create a corporate brand identity through promotional material and advertising campaign to establish a corporate identity.
There are certain brand characteristics that lead a company to get sustainable competitive advantage. A well designed logo and a strong identity system can give a company an edge over its competitors.
“A unique set of brand associations that the brand strategist aspires to create or maintain. These associations represent what the brand stands for and imply a promise to customers from the organisation members”.
“Brand identity is the way a company aims to identify or position itself or its product or service.”
Kotler et al, 1999
Brand identity is the first thing that a customer experience and plays a major role in getting a sustainable competitive advantage in the market. Brand attributes are is a bag of features that shows the personality of a brand and these attributes help to create brand identity.
Brand identity is supported by emotional and unique elements and values, serve to distinguish the brand in the market, especially for progressively competitive environments, service organisations and recreational sectors.
Brand identity creates a distinct identity that is very hard for the competitors to duplicate.
The main elements to build a strong brand identity are human resources, organisational culture, organisational structure, stationary, company cards, company décor, packing, catalogue, market and innovation etc.
Kotler et al, 1999
Brand loyalty is considered as ultimate reward for a brand as it is another factor which leads a company to get a sustainable competitive advantage. Customers always prefer to buy those brands they are loyalty with, even though that is expensive and have close substitutes in the market.
Apple’s iPod is a product to listen mp3/mp4 music, and the big electronic giants like Sony, Panasonic and so many other companies have same product with same features at the relatively low price than Apple’s iPod. Majority of the customer’s buy iPod just because they are loyal with the brand.
“Brand is a symbol of extremely precious part of legal property, that can control consumer behaviour and it also provides the protection of persistent future revenues to the firm. Brand equity is called the amount that is directly or indirectly accrues by these various benefits”.
Kapferer, 2005; keller, 2003
Companies invest huge amount of money to develop brand equity. Brands with high equity win the space in the market because of the uniqueness, reliable services and continuous and effective relationship with the customers.
Stronger brand image takes a company to financial advantage through the brand equity. Brand equity leads a company to charge perineum prices for the product to raise their profit margin.
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