Branding Case
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There is a wild range of brands in different categories. In order to create better brand strategies, a detailed and comprehensive customer and competitor analysis is necessary for achieving the goal. The main objectives for a brand are to increase sales, profit, and market shares. In order to achieve the goal, the brand is required to understand the competitive situation, customer dynamics and the market situation. Managers cannot simply carry out strategies without any planning. Lack of customer and competitor analysis will result in tackling the wrong direction. Customer and competitor analysis can assist managers to understand the threats from competitors. As long as different brands are tend to obtain a greater market share, it is necessary to work out tactics in order to avoid partitions in market share.
Before commence any analysis, it is essential for the managers to classify what types of competition that the brand is facing. For instance, McDonalds direct competition comes from Hungry Jacks since both fast food enterprises are selling similar types of food. Direct competition usually appears in product form (level 1). Besides direct competition, the brand should also regard threats comes from indirect competitors. An indirect competitor means a business that provides an alternative solution in the same market (Dolan, 2009). For example, the indirect competitor of McDonald could be Subway as long as these two companies are in the same market although McDonald is selling hamburger and Subway is providing sandwiches. Subway is an alternative choice of McDonald which can also describe as a substitute product.
The first step in the process of developing brand strategy is to define who your brand is you create the foundation for all other components to build on (Laura Lake, n.d). In order to start analyzing the competitors, there are few ways available for the company to identify the competitive structure. The customer based measure provides a vision of the duplication of purchase and customers preferences in different situations. By observing the data, the company can figure out which brand shares the most customers with itself and also which brand gain or lost the most market share from. After knowing which brand is the main threat, the company should put effort on analyzing competitors attributes such as: pricing strategies, product diversity, flexibility or quality etc. The Volkswagen has successfully obtained a great market share in compact car market by introduce the new Golf GTI. Volkswagen tackled the weaknesses of Japanese car makers. Reasonable price with high performance engine is the selling point of Golf GTI.
Another way for the company to understand the competitive structure is through managers judgment. Managers express their point of view the assist in market competition breakdown. For example, the manager usually observes about the industry trend, economic landscape or other factors in order to predict competitors strategies. Furthermore, the manager should also know well which brand is selling the same sorts of products in order to identify whether it is a direct competition or indirect competition.
In terms of communication, the brand should distinct