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A Brand Strategy Always Guarantees success. Discuss.
This essay intends to define brand strategy and if a brand strategy is possible for all brands. It will also look into the ability and level to differentiate between different kinds of products and look into how a brand strategy can bring success. Furthermore the essay intends to shed light on whether or not these themes are transferable to all products and services.
According to Trott (1998, p.365), Brand strategy is the spearhead of the organisations competitive intentions. It carries the company or product name into the market and shows how its positioning itself to compete. A brand strategy is a tool used by companies to give buyers a reason to buy their particular product as opposed to other companies. In Baker 2000, p.24, Porter concludes that Strategy is making trade-offs in competing. The essence of strategy is choosing what not to do. Types of brand strategy include targeting, positioning, pricing, marketing communications (advertising and direct marketing), media allocation and customer services. Brand strategy is based around differentiation and added value. It is not to do with the product itself but instead focuses on non material things which surround the product: To reiterate, to differentiate the product would be to gain a competitive advantage. To achieve this advertising is often used, with studies showing the more the customer is familiar with the product or service the higher the differentiation between that particular product and others is.
Here we introduce the model devised by Pine and Gilmore which show the four stages of differentiation commodities, easy to handle products, transfer products into services, create a product experience. (Riezebos, 2003, p.19.) This model demonstrates that different products can be differentiated to various degrees, for example, with a commodity there is only room for a small amount of brand sensitivity in the consumers opinion. Consequently, degrees of differentiation will have an impact on how effective a brand strategy can be. Commodities being the least effective and the ability to create a product experience being the most. Lets draw attention now to if, with variations of product sensitivity in mind can any product adopt a brand strategy? The answer is yes. Even the simplest product is differentiable. Take the example of a commodity such as hair clips. On the surface they will all be the same. However if you package them differently, advertise, insure good quality etc, differentiation is achieved making a brand strategy possible.
Moving on, we see that, Riezebos, (2003, p.20) suggests that Consumers in different product classes are more likely to be influenced by a brand name than other product classes. What is being said here is that depending on what product it is depends on how sensitive a consumer is to a brand strategy. If the consumer already knows what they want from a product it means they are less brand sensitive, however if it will change their lives in someway or their social status, lifestyle i.e. a car then they are more brand sensitive. An added reason why brand sensitivity may be minimal is because the market may be oligopolistic or monopolistic. In these kinds of markets there is very little or no choice (of brand/product) therefore the brand will not be as much of a factor and the customer simply uses the brand available to them.
In terms of management strategies, there are a number of different kinds of advantages which could be implemented by management to reach a larger consumer audience and make it easier to penetrate new markets. These consist of extension/ endorsement, strategic and management advantages. These are explained in detail below.
Extension or endorsement strategies can be observed where a new product uses the brand name of an already existing product. For example the brand Virgin has used their brand for a number of very different products. This has helped them launch each extension line because they have a precisely established and trusted brand name. Global branding gives a company a larger platform to sell their products, however there are many pitfalls when going global which people must be aware of. Each country has different demands and therefore its product and its brand strategy must be tailored for their particular individual needs. This is optimised with the phrase think global, act local (Global marketing, an interactive approach). An example of a multinational firm that has gone global but still manages to think local is McDonalds. Whilst McDonalds remains a recognised brand world over it has slight variations in each country. For example France has more cafй like outlets therefore McDonalds outlets offer Expresso coffees.
Strategic advantages consider facts that make a manufacturer more resistant to competition than if they chose to adopt a product strategy. A barrier can be formed against other competition because there is an established consumer base who are loyal to that brand. If there is a high demand there will be a demand for that product to be given shelf space. Having a strong corporate brand will attract employees to that company more so than if it was an unbranded company.
Financial advantages are often long term in comparison with product strategies which are generally on a shorter term basis. To implement this advantage an injection of money is needed to demonstrate to the target market the differentiations with the brand. A successful brand strategy will generally provide higher yields of profits than generic products and further are more likely to generate repeat buys of the products. The initial cash investment can be justified because the costs of advertising can have advantages for more than one product. i.e. Walkers crisps have many different kinds. If for example French Fries is advertised, and the sign for walkers is featured in the advert the recipient will have connotations of all the other products i.e.Monster Munch etc. The Steiner model also suggests that the higher the intensity of advertising the higher the price the company can demand for that brand product. If the brand strategy is successful there will be a continuous demand for it. This attempts to secure future income making it more appealing to investors and lenders. Lambins, research adds to this point when he concludes that advertising expenditure has followed the growth rate of GDP, and this regular increase in expenditure suggests the efficiency of advertising for the producer. (Lambin,1993, p. 115)
There are many examples where a brand strategy has been a success.