Brand management the case of Verticon Ltd - Essay Example

Brand management – the case of Verticon Ltd Chapter Introduction In modern markets, the survival of firms operating in all industrial sectors has become a challenging task. In this context, firms have to restructure their strategies in order to meet the demands of the consumers and the needs of their market. Brands have been considered to be a significant part of the corporate strategies in terms that their development has been proved to be related with the increase of the firms’ performance (at least in most reported cases). On the other hand, it has been supported that “brands often cant justify the time and expense of developing new competencies until they are well behind the opportunity curve; successful licensing offers a way of accelerating new product development and deepening brand relevance” [1]. In other words, in order for branding to bring the necessary results, it has to be appropriately designed and developed taking into account that each particular company has its strengths and weaknesses that can be differentiated from the other firms that operate in the same industrial sector. For this reason, the brand management strategy which is going to be implemented in a particular company has to follow specific rules and, most important, to be adapted to the specific firm’s characteristics trying to promote the positive aspects of the organizational structure. Current paper refers specifically to the development of a brand management strategy for Verticon Ltd, a company that operates in the British market and especially in the fashion industry. The above firm operates quite long in the particular market, however the increase of the power of its competitors led the corporate managers to decide the establishment of a brand trying to enforce the firm’s performance and ‘secure’ its position in its market. Chapter 2 – Verticon Ltd – company overview Verticon Ltd is a company with a long history in the British fashion industry. The firm established in 1922 in London. Its performance has been significant throughout its history. More specifically, in 1930s the company was already considered as one of the major competitors in the country’s fashion sector while in 1950s its operations were expanded worldwide with the opening of a store in France (Paris) and later (in 1964) in Italy (Milan). Today the company has approximately 18 stores across Europe (and about 14 stores in UK). The number of employees has been increased the last 5 years reaching the 750 (for both UK and Europe). The expansion of the company in other countries internationally like USA, Japan, Saudi Arabia and Dubai has also been considered thoroughly. In 2006 the firm achieved a profit of 1,350,000 pounds in all its stores worldwide, an important achievement comparing the 870,000 pounds of the previous year (2005) and the 798,000 pounds in 2004. For 2007, the company’s profits are expected to be increased at a percentage of approximately 8% offering to the company a significant advantage towards its competitors. However, because of the existence of hard competition in the fashion industry worldwide the firm’s managers decided to proceed to the acquisition of a well known brand, the ‘Uniform’ jeans by the American firm ‘Lawton’. The cost of the above brand was rather high reaching the 350,000 pounds, however the firm’s managers have estimated to ‘cover’ the relevant expense in the following 2 years through the profits that this brand will generate for the firm. Moreover, an appropriate brand management strategy should be developed in order for this brand to be ‘smoothly’ adapted in the organizational operations. The ‘steps’ of the relevant procedure are going to be presented analytically in the chapter that follows. Chapter 3 - Design and implementation of brand management strategy in Verticon Ltd In order to understand the role of branding in the development of corporate performance it is necessary to explain the meaning of ‘brand’ as an element of business activity. In this context, it is noticed by Farquhar (1989, in Crimmins, 2000, 136) that a brand is ‘a name, symbol, design, or mark that enhances the value of a product beyond its functional purpose’. On the other hand, Crimmins (2000, 136) supported that ‘because brand names enhance the value of products and are difficult for competitors to copy, brand names play a critical role in marketplace competition’. Apart from the definition of brand as presented above, other elements of the relevant procedure, as ‘logo’ should be explained. The definition of ‘logo’ is presented in the online encyclopaedia ‘Answers.com’ according to which logo is ‘logotype unique design, symbol, or other special representation of a company name, publishing house, broadcast network, or other organization, used as a trademark’ [4]. The presentation of the content of ‘brand’ and ‘logo’ is considered as necessary in order to understand the particular steps of the relevant procedure (implementing and monitoring a brand in the retail sector). Generally, it has been found by Macrae et al. (1997, 64) that “brand managers face many challenges (including questions of brand strength, world-class culture, “glocal” branding, seeded marketing channels, “service smart” integration, brand architecture and brand organizing)”. Because of the many aspects of branding as a corporate activity, it is noticed by the above researchers that the implementation of a brand can be completed through the procedure of ‘brand chartering’ which refers especially to the relevant task. Moreover, it is made clear that the above procedure (brand chartering) refers to three particular tasks: “creating and communicating the brand, managing the brand organization, and directing and structuring the brand” (Macrae et al., 1997, 64). In accordance with the above researchers, the steps involved in the implementation of a brand are three as presented above. However, because of the complexity of the relevant term, branding is often differentiated in each particular market in accordance with the potentials of the specific market to be developed furthermore. In any case, the brand management plan should refer to the marketing plans used as a basis for the development of the relevant projects. In this context, Blair et al. (2000, 43) stated that “brands should be the main elements of a marketing plan’. The importance of relation of branding with management can be proved through the research of Blair et al. (2000, 43) who noticed that “brand extensions constitute an estimated 95 percent of the 16,000 new products launched in the United States every year; however, extending a brand name to inappropriate products may result in product failure and/or reduced brand value”. Apart from the provisions for the promotion of the particular brand through marketing, it is necessary that the brand management plan includes specific legal and ethical rules related with its implementation and operation. From another point of view, it has been stated by Henderson et al. (2000, 1) that “the building of a brand starts with a precise definition of the target customer group and its needs and expectations and proceeds to a realistic assessment of how well the brand currently meets them; next, the retailer must decide which of the benefits it can offer will give the brand a distinctive position in the marketplace; then the retailers marketing and advertising efforts must fashion an image around the brand that is not only consistent with these benefits but also credibly promises that they will bring excitement and satisfaction”. In the above context, brand can be used as an indispensable part of the corporate strategy helping towards the improvement of the firm’s position in its market. The implementation of an appropriate strategic brand management policy cannot ensure however the elimination of the phenomena of failure during the relevant effort. At a first level, it has been found [1] that the strategic brand management process should include four steps [3]: ‘a) Identifying and establishing brand positioning and values; b) Planning and implementing brand marketing programs; c) Measuring and interpreting brand performance and d) Growing and sustaining brand equity’ [3]. The above steps can be followed in any particular case of brand management policy implementation however they have to be customized in accordance to be in accordance with the needs of the customers as set by their daily preferences and the increase of the firm’s productivity. In the case of Verticon Ltd the design and the implementation of the brand should follow the above steps with a special reference to the implementation of the ‘logo’ related with the particular brand. It is very likely that in the brand under examination the logo that is going to be implemented will be the word ‘Uniform’ as of the name of the relevant product. Apart from the above steps regarding the implementation of a brand, Hartman (2004, 1) referring especially to the case of ‘cultural brand’ mentioned that the following five steps should be followed in order for a cultural brand to be established: “creating brand experience, building community, selling to cultural occasions, learning the language and creating the culture of the product”. However, the most important issue in implementing a brand is considered to be the identification of the fact that ‘consumers are constantly changing’ (Hartman, 2004, 1). The choice of the appropriate procedure for the establishment of the particular brand in the case of Verticon Ltd belongs to its manager who will also decide on the principles and ethics that are going to be applied during the completion of the specific task. A different approach regarding the design and the implementation of the relevant policy is that which supports the primary role of the market segmentation on many ‘pieces’. More specifically, in accordance with the relevant approach, a series of steps is required for the successful implementation of a brand management policy, the following ones: ‘a) market segmentation, b) brand positioning, c) Marketing Program Development and Evaluation, d) Marketing Communications, Brand Promotions and Advertising Management’ [4]. The above ‘steps’ need to be followed by the order presented above which ensures the highest possible ‘return’ of the relevant investment. Apart from the above steps, a ‘brand health and brand equity assessment’ could be considered as a potential part of the relevant procedure. Chapter 4 - Evaluation of brand – role of marketing Modern markets are characterized primarily – as already explained above – by high competition and continuous turbulences in all industrial sectors. Regarding this issue, it has been stated by Laforet et al. (1999, 51) that “intense competition, emerging markets, brand extension, acquisitions, and many other activities have left companies with a confusion of products to make and brands to manage; more important than understanding how to manage "a brand" is how to manage the bundle of brand identities in a firms portfolio”. Despite the complexity of the procedure involved, brand management is regarded as a powerful tool for the improvement of the firm’s position within its market. The role of the manager in this case is crucial. Manager can ensure the application of the appropriate measures for the successful ‘adaptation’ of brand in the corporate strategy. The design and the implementation of brands has been studied by Hollander (2006, 1) who found that “brands are successful at holding onto customers because of the emotional fabric and bond they must build with users; however, authentic innovation is a requirement while meaningful points of difference and a sharper edge with competitive options are a must”. In other words, in order for branding to lead to the required results, it is necessary to be adapted to the firm’s needs trying to follow the principles and ethics provided in the relevant policy. The role of advertising in the successful completion of this procedure (implementation of brand) is significant. In this context, it has been supported by Barnard et al. (2002, 7) that “advertising in a competitive market needs to maintain the brands broad salience--being a brand the consumer buys or considers buying; this turns on brand awareness, but together with memory associations, familiarity, and brand assurance while publicity can also help to develop such salience”. It should be noticed though that advertising should also follow specific guidelines ensuring that the ethics and the principles of the commercial market are not going to be ‘violated’ or ‘ignored’. The importance of brand for the improvement of the corporate performance is ‘derived’ by the fact that branding refers to an existed ‘part’ of the population in terms that the product involved is being preferred by many people within the local market. For this reason, Baldinger et al. (1996, 24) noticed that “the combination of attitudes and behaviour provides a loyalty definition that is the basis for assessing, tracking, and taking actions to improve brand health, where the health of a brand is basically its likelihood of growing versus declining; on the other hand, optimal strategies for brand growth depend on whether the brand is currently healthy”. In other words, the evaluation of the role of brand is not an easy task. It depends primarily on the position of brand in the particular market and the potentials of the company involved to ‘promote’ the particular brand among the population of a specific region. In this context, it should be noticed that one of most significant tasks of firm’s managers – when having to establish a specific brand – is the development of the firm’s marketing communications in accordance with the needs of the market, the trends of consumers and the financial strength of the company to respond to the relevant cost. In this context, Dobie et al. (2003, 289) noticed that “marketing communications are an important element of any marketing strategy as it is essential to inform potential and existing customers regarding product/service availability and application, and to persuade potential users to investigate, examine, and/or try the proffered product/ service”. However, because of the existence of many parameters – as presented above – that can influence the organizational strategy regarding the marketing plan followed for the promotion of a specific plan, the firm should try to highlight the main advantages/ qualities of the product/ service involved trying to avoid the reference to ‘broad’ or ‘unclear’ advantages/ characteristics. Chapter 5 - Conclusion Brands are very important for the improvement of firms’ position in the international market. In this context, it has been noticed that “most brands are still labels, relying too strongly on brand names and logos, and focused too heavily on the companies and products that they help identify; however, powerful brands can drive success in competitive and financial markets, and indeed become the organisations most valuable assets” [2]. In other words, the need of organizations for the establishment of brands is emergent. On the other hand, the establishment of brands is related with a series of issues that are difficult to be resolved. More specifically, it has been found by Barnard et al. (2002, 7) that “brand advertising seems to work mainly by creatively publicizing the brand, without trying to persuade people that the brand differs from other brands, or is better or best while fairly few advertisements actually feature potentially persuasive inducements for their brand”. However, in practice, brand advertising is a complex procedure because it involves to a thorough and analytical research of the local market and its trends, the preferences of consumers, the financial position of the company, the prospects of the specific brand for the future (its performance in the future) and so on. The role of marketing in this case can be really significant. In this context, Aufreiter et al. (2000, 53) supported that “when traditional marketers think of organization, they mean structure: distinct product, channel, and customer groups focusing on specific functional tasks, such as brand management, customer segment management, and market research while functional managers play the pivotal roles in these functionally focused groups, which are responsible for generating ideas and taking them to market”. In other words, brand management is closely related with marketing. In fact, the establishment of a brand cannot lead to the required results unless supported by the appropriate marketing strategy. In the case of Verticon Ltd the establishment of the particular brand has to be followed by the appropriate marketing plan that will be used in order to inform consumers in Britain on the particular brand. The latter even if it is well known internationally it needs to be appropriately adapted in the British market through the relevant marketing strategy which will be designed and applied by the firm’s managers. References Aufreiter, N., Lawyer, T., Lun, C. (2000) A New Way to Market The McKinsey Quarterly, 53-58 Baldinger, A., Rubinson, J. (1996) Brand Loyalty: The Link between Attitude and Behaviour Journal of Advertising Research, 36(6): 22-31 Barnard, N., Bloom, H., Ehrenberg, A., Kennedy, R. (2002) Brand Advertising as Creative Publicity Journal of Advertising Research, 42(4): 7-22 Blair, E., Dacin, P., Gelb, B., Oakenfull, G. (2000) Measuring Brand Meaning Journal of Advertising Research, 40(5):43-50 Crimmins, J. (2000) Better measurement and management of brand value Journal of Advertising Research, 40(6): 136-144 Dobie, K., Grant, J., Megehee, C. (2003). Time versus Pause Manipulation in Communications Directed to the Young Adult Population: Does It Matter? Journal of Advertising Research, 43(3): 281-295 Hartman, H. (2004) Five Steps to Build a Cultural Brand, American Marketing Association, available at http://www.marketingpower.com/content21255.php Henderson, T., Mihas, E. (2000) Building Retail Brands, American Marketing Association, available at http://www.marketingpower.com/content17918.php Hollander, R. (2006) Strategic Brand Partnership Help Create Competitive Edge, available at www.brandchannel.com Laforet, S., Saunders, J. (1999) Managing Brand Portfolios: Why Leaders Do What They Do Journal of Advertising Research, 39(1): 51-59 Macrae, C., Uncles, M. (1997) Rethinking brand management: the role of brand chartering Journal of Product and brand management, 6(1): 64-77 Websites http://www.brandchannel.com/papers_review.asp?sp_id=1279 [1] http://www.allaboutbranding.com/index.lasso?article=438 [2] http://www.1000ventures.com/business_guide/marketing_brands.html [3] http://www.answers.com/topic/logo-7 [4] Read More