What are the key factors in developing successful brand - Dissertation Example

?What are the key factors in developing successful brand? Case study Procter and Gamble and their approach to branding Table of Contents What are thekey factors in developing successful brand? Case study Procter and Gamble and their approach to branding 1 1 Table of Contents 2 Abstract 3 Introduction 3 Literature review 5 What are the factors in developing Successful brand and how Procter gamble approach their brands 8 Methods 10 Result 12 Discussion 13 Conclusion 14 References 16 Abstract Globalisation has ushered in a new era of competition with the business organizations engaged in a cut throat competition to capture new customers as well as to retain the existing customers. In this regard the aspect of branding assumes importances considering the fact that brand are essentially used to distinguish between products and services by the customers across the globe. The present study would analyse the branding strategies of FMCG major Procter and Gamble. The choice of organization assumes significance considering the fact that it is one of the most reputed brands of the globe that has a large array of product offering in different and diverse markets across the globe. The study would include an analysis of the literature that would highlight the essential ingredients of a good branding strategy. This would be followed by an analysis of the existing brand strategy of Procter and Gamble and its effectiveness in the present business environment. The study would finally present a conclusion that would summarise the findings of the study and would also try to suggest few points that could be used by the organization to create a sustainable competitive advantage in the market. Introduction The present age of business environment largely calls upon business organizations to induce greater distinction between their brands and the competitors so as to gain competitive advantage. In this regard it has become immensely important for business organizations to concentrate towards improving their brand image. Brand is an intangible asset for an organization that essentially differentiates the products and services of one organization with the rest of the others in the business market. The aspect of brand image has assumed more importance in the recent years owning to the fact that consumers are largely using brands as a distinctive element to segregate among products and services available in the market. Brands are essentially being used by consumers across the world to recognize their preferred products and services. Companies like Apple, Starbucks draw competitive advantage based on their brand image. A good and formidable brand image not only helps in attracting new customers but also helps in retaining the existing customers by promoting customer loyalty (Mansfield, 2005, p.17). In addition to customers brand image and identity also plays a major role in shaping a firm’s image towards its employees and the prospective employees. Employees have a tendency to resort towards less switching if they work for a reputed brand. This further makes an organization more efficient as human resources are the most valuable assets for an organization. Brands also have considerable influence on the aspect of positioning of the product or service in the minds of the consumers. It has been stated in numerous research reports that successful brands have a formidable positioning that largely helps these brands to retain their competitive edge in the market (Peca, 2009, p.106-161). The present study would analyse the aspect of branding particularly in relation to Procter and Gamble. Procter and Gamble established in the year 1837 is presently one of the most formidable brands in the industry. The company has its business operations spread across numerous areas of the globe and has a wide range of product offering under its brand that seeks to cater to the needs and wants of every section of the customers in the market. The core principle in the organization is to remain as close to the customers as possible so that they can have a better understanding of their demands as well as their consumer behaviour. The company tries to continuously innovate its product offering. P&G has a specific product strategy for different consumer markets that are largely based on the local culture and sentiments of the individuals and the members of the target market audience. It also has a highly innovative and effective marketing communication strategy through which it conveys its message to the members of the target market audience (Procter & Gamble, 2011). The present study would try to analyse the case of Procter and gamble particularly with regards to their branding strategy and its effectiveness in the context of their success in the consumer markets across the world. Literature review According to LePla & Parker (2000) a brand is an asset for the organization that distinguishes between products and services offered by different companies in the market. According to the authors brand is an aspect that essentially serves as the point of intersection between the strengths of a company and the value proposition of the consumers. A brand is an identity that consumers largely use to analyse their relationship and its proposed benefits and values that they can obtain while remaining in association with a particular brand. Consumers largely analyse a brand from their association and its benefits and make future purchase decisions (LePla & Parker 2000, p.3). Kapferer (1997) conducted a research towards analysing the factors that are associated with the development of a successful brand in the market and stated that coordinated and dedicated efforts from all the departments and subunits from every quarter of the organization is essential for the development and success of a brand in the market. The author was of the opinion that a successful brand not only requires a sustained effort from the top management or from a selected department but it is rather based on a collective and comprehensive effort from every organizational quarter that ultimately results in the development of a successful brand (Kapferer, 1997, p.317). Davis (2009) stated the importance of external and internal business environment towards shaping a good brand. The author was of the view that the market condition surrounding an organization has a major role to play in the distinction of products and services among the minds of the consumers. Therefore a branding strategy must essentially include the environmental aspects in order to have higher brand equity. Marketers must try to formulate a strategy that is in synchrony with the external environment of a particular consumer market (Davis, 2009, p.332). Nilson (2003) stated the importance of organization structure and control towards the development of a successful brand in the market. The author was of the view that these two aspects not only help in the development of a successful brand but also helps in the retention of a brand image in the minds of the target market audience. Control is also essential considering the fact that brand image is directly linked to the aspect of positioning and any mismatch can lead to confused positioning among the consumers that can drastically affect the fortunes and the business prospects of the organization in the market (Nilson, 2003, p.161-162). Monye () conducted a study on the effect of product features and marketing mix towards the brand image and brand equity of an organization. The author after a series of research concluded that product quality has major role in the development of brand image. The author was in complete agreement to the fact that product features essentially needed to be of a superior quality in order to have a formidable positioning and brad image. Marketers must therefore devote considerable emphasis towards improvement of product quality. The author further added that in addition to the product features other elements of marketing mix particularly the aspect of promotions and integrated marketing communications plays a major role and must be given considerable priority by the organization. An effective marketing communication was perhaps very essential in the development of the brand image of the organization. The marketing communication strategy must be such that the message to be transmitted is in tune with the long term objectives of the organization. It is also essential that the information is conveyed in a simple yet comprehensive manner and that does not create confusion among the minds of the target market audience. The message must be such that it effectively captures the needs and wants of the targeted market audience (Monye, 2000, p.95). In addition to the elements of product mix considerable efforts are also required by the organization with regards to the aspect of creating a distinction between the products available in the market in the same product category. A research study was conducted by a consortium of jewellers in America (2000) to analyse these aspect with regards to branding and development of brand equity. The research study put considerable focus on the aspect of creating a distinction as well as an analysis of the customers as pre requisites for the formation and development of a successful brand in the market. In addition to this the company must essentially develop a strategy through which it conveys its intended message to the target market audience. The image and popularity of a brand are highly correlated with these aspects and have a considerable influence on brand image. Finally the report also lays stress on not only pushing sales to the customers but also provide after sales service. Grievance handling is another critical areas that has effects on brand image. Consumers are essentially prone towards brands that provide better after sales service to the customers. Effective grievance handling is another aspect that drives the development of brand image. Customer tend to be loyal towards brand that have an effective grievance handling mechanism (Jewellers of America, 2000, p.2-6). A research conducted by Roll () states that a successful branding strategy must essentially be such that it takes the entire stakeholders into confidence before implementation and execution. These must have the necessary vision with complete support and guidance of the top level management of the organization that should have an active part in the entire strategy formulation and execution process. The author also lays stress on the fact that in addition to strategy formulation there needs to be a proper delivery system in the form a marketing communication program that seeks to convey the right message to the target market audience. Finally the author states that a successful branding strategy not only includes formulation and implementation but also requires continuous monitoring and feedback. Timely changes should be made to ensure that the branding strategy is effective and that the issues or pitfalls in the strategy do not jeopardise the branding process. These aspects along with a holistic approach can go about a long way in ensuring the effectiveness of the brand in the market that ultimately would lead to sustainable competitive advantage for the organization in the long run (Roll, 2006, p.192). What are the factors in developing Successful brand and how Procter gamble approach their brands The core of branding procedure is done by establishing firm’s identity and building a strong position in the global market between its customers, retailers and the market place. Integration of these vital elements gives a strong position for the company in the market and a clear cut branding international strategy for branding can be developed by the firm. The key elements for the success of branding is framing the architecture for the product line from the company across the countries and designing the level of branding procedure for the firm. Evaluation of the market and reducing the cost of media and increasing the linkage with the customers through proper communication process along with internationalization in the market aids in the process of branding for the firm in the long run for the company. Along with the establishment of the company’s branding procedure the company is also required to manage the brands in the global market for a successful implementation of the process in the long run for the firm. The branding strategy of the firm should be clear amongst all the levels of the firm and should be the culture of the company to promote the growth process in the market (Douglas, Craig, 1999). There are several factors which are needed to be kept in mind while developing a branding strategy. The architecture for the development of the International branding strategy can be varied from company to company. Few companies are more into building corporate dominant architecture for building the brand strategy while many companies follow the product dominant architecture for the branding strategy. While some firms like P&G follow the power branding strategy for the expansion plans in the international market. The innovative approach with diversified product line from the company helps P&G to reach to the global market with the needs of each and every person in the globe with the targeted product towards the market. The motto of the company to reach to the every corner of the universe and offer products for every need of the customers and improve the product line of the existing products and complete solution to the customer lives is the major reason for the success of the branding process. Innovation is the major factor which runs in every aspect of the business process for Proctor and Gamble. The investment of the company on the growth prospect of the business process and the innovation of its products and brands from the company is the major driver for Proctor and Gamble to flourish in the international market. The company constantly involved into the innovation process in the major countries of operation which is the backbone for the company to drive growth across the business. With this effort in action the company build their market share and grow their sales in the market and earn profit from its business operation. The marketing plan for the company also plays a vital role along with the innovation process that leverage in the process of growth for Proctor and Gamble. The power of branding for its 18 different products in the marketing of the sponsorship for 2010 Winter Olympics is one of the biggest marketing campaigns ever launched by the company. For the reduction of the production cost and maintain the cost discipline Proctor and Gamble is always focused towards the innovation efforts to the development process of its products and marketing plans. Developing alternative materials to improve the performance of the products and saving the cost for the firm operation is won by the innovation process from the firm in its business process. With the diversified product line the company not only focuses on a particular segment of the market rather it competes with more than 20 categories at the same time. The company have many billion dollar brands operating in over 80 countries with the diversified product line. In spite of this separated operation at different parts of the world the company competes with the global market as a single unit which helps in the process of collaborative innovation process for its different products and improve the life of the people every day (P&G, 2011). Methods The multi branding strategy of the company is the major weapon for company like Proctor and Gamble to expand their business in the global market and meet the demand of the market. This multi branding technique helps the company to cater the threats from its competitors for the bigger business process and utilize its strategies in a more effective manner. The products from the company are divided into sub category t meet the expectation of the market for every segment of people with a varied type of pricing of the products. The higher range of products is targeted towards the higher segment of the market emphasizes towards the high quality of products while on the other hand to meet the lower segment of the market the company produce products for the price sensitive market along with the choice to reach to the high end products from the company. Like in the segment of Shampoo, Proctor and Gamble offers five different kinds of shampoos which covers every need and segment of the market with its quality and price. This in turn also affects the entry of new products from the competitors due to the occupancy of many brands from the company. Two products with same features is not attracted in the market thus capturing the market with its product Proctor and Gamble have great advantage to distinguish its own products for the different needs of the market along with grabbing the market share from its competitors. In earlier days the company is mainly concentrated towards brand management system through research and development but the advent of globalization the company is constantly changing its strategy in the global market to reach to the market implements its global branding strategy. In the year 2000, Proctor and Gamble implemented its cohort management strategy for brand management process. This strategy is mainly designed to focus on particular segment of the market with similar kinds of products from the company. This has helped the company to reach to a larger customer base in a much simpler way and target each and every segment of the market in an individual manner which will not only help in the increase of products to the target customers but on the other also helps the company to understand the behaviour of the product in the market according to the assessment of individual customers (ICMRINDIA, n.d.). In this branding technique the company ensure the idea of sharing the profit for the company from the market but on the contrary the company also ensures that the different products are not targeted towards the same market segment. Products are placed for the different market segment to target different kinds of customers with their individual needs and behaviour. Though the whole product segment face strong competition from the competitors like Colgate and Unilever but unlike in the detergent section the two different products from Proctor and Gamble are Tide and Cheers, which both are target for different target market and they don’t compete with each other to generate business from the products. Tide is mainly targeted towards the premium segment while Cheer is primarily focused towards the economic segment of the market. With growth in the market place the company understood the need to act globally and reach to a larger customer base with the globally expansion strategy. The innovative approach of bundling the consumers with similar kinds of needs and behaviour is the major weapon for Proctor and Gamble to reduce its cost from distributed marketing technique for its different products also the strategy helps the company to target specific customer behaviour. This innovative technique of the company is very different from its own previous strategy. But the changing strategy with the global market is the major driver for the business of the firm in the long run (ICMRINDIA-a, n.d.). These innovations from the company facilitated the process of being the leader of the business in the FMCG sector of the market and operate with a strong base with diversified product line for the market. Result The result of the innovative technique implemented by Proctor and Gamble is depicted as being the leadership in 50 different brands worldwide and being the most familiar names for household items in the market. All the products from the company have great potential in the different markets of which around 24 brands of the 50 generate huge revenue for the firm from the market. Each of these 24 brands generates a huge amount of one billion dollars each in the annual sales process of Proctor and Gamble. The company also achieved several recognitions as the most successful products of the years for the last 16 years and hold the leadership position in the market with its innovative products for the consumers in the market. 50 Brands for Proctor and Gamble generates the most of the business for the firm and represents about 90 % of the total sales for the company and generates a total profit of around 90 % from these products in the market. With the expansion in the market the company is constantly growing in its size and expanding its brand in the market. With more and more Proctor and Gamble brands the company is focused to deliver improved products for the consumers and improving the life of people. At present the consumers of the market purchases Proctor and Gamble products about 40 billion times in a single years. With the constant strategic implementation of the plans from the company Proctor and Gamble expects to reach a massive increased amount of 60 billion in recent future which depicts a great prospective market for the company growth continue its leadership position in the market (P&G Annual Report 2011, 2011, p. 2-21). These strategies for the company have leveraged the growth for the firm to great extent in recent years with the innovative integrated technique from the company. The increase in the productivity from the firm helps the company to free the resources and invest into innovation and the development of new brands for the company. The company strengthen its portfolio of the businesses with the innovation technique involved in the business process. The company’s own strategy creates huge potential for the growth of the different products and captures the market share with a strong strategic plan (P&G-a, 2011). Discussion Proctor and Gamble with the innovation technique and courage and with the ability to make smart strategic decision at critical situation of the market is the major catalyst for the survival of the company in the market place. With the growing competition in the market the company have understood the need to understand the needs of the consumers to successfully implement strategies for the market and design an innovative engine to increase productivity for the firm and develop new products for the market. Changing behaviour of the market is very well understood by the company to implement its innovative approach in building customer centric segmented product line from the company which is integrated according to the particular target market. Innovation not only responsible for the development of new products but it also facilitates the company’s operation and aids in the process of reducing the cost of the products by utilizing resources in a effective and efficient manner. This helps the company to generate its profit from the huge customer base in the market and get an extra edge in the market with its product line focused towards every segment of the market with quality products offered to each and every individual. The organization believes in producing results through innovation and multi branding strategy is one the major innovation for Proctor and Gamble to reach to every consumer and improve the daily lives of the people with quality improved products at competitive price in the market place (Cisco, 2001, p. 1-3). Conclusion The analysis of the aspect of branding reveals a considerable and urgent need for business organizations to develop a formidable brand. This is important because of the fact that brands are essentially used by consumers to distinguish between products and services. Procter and Gamble is one of the most formidable brands in the present day business markets. Much of the success of the company has been attributed towards its effective brand image that has led to a good positioning of the brand in the minds of the target market segments. The company essentially uses an umbrella branding strategy with different brands as it targets multiple consumer segments. Using a multi brand strategy helps the company to target multiple consumer market segments while enhancing its brand image. The company also has an effective marketing communication strategy that helps it to convey the right message to the target market audience. Procter and Gamble also follows a strategy of thinking globally and acting locally as its product mix is largely devised on the basis of the prevailing local culture and sentiments of the members of the target market audience. This enables the company to have success story in the different market that it operates that essentially have a diverse and distinct culture and consumer behaviour. Finally in order to improve its brand image the company must concentrate towards continuous innovation in the product line apart from making best strategies in customer service management. These would not only enable the firm to enhance its brand image but to also make it the best brand in the world that would reap long term sustainable competitive advantage for the organization. References Cisco. (2001). Procter & Gamble. [Pdf]. Available at: http://www.cisco.com/warp/public/779/ibs/solutions/supply/pgcasestudy1.pdf. [Accessed on: September 12th 2011]. Davis, J.A. (2009). Competitive Success, How Branding Adds Value. John Wiley and Sons. Douglas, S., Craig, C. (1999). INTERNATIONAL BRAND ARCHITECTURE: DEVELOPMENT, DRIVERS AND DESIGN. [Online]. Available at: http://people.stern.nyu.edu/sdouglas/rpubs/intbrand.html. [Accessed on: September 12th 2011]. ICMRINDIA. (No date). P&G's Brand Management System. [Online]. 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