What Enhances Introduction of a Strong Brand - Case Study Example

? Branding i Acknowledgement I dedicate this research to the members of my family for the financial and the moral support they have offered to me during this hard times. Special dedication also goes to my professor who gave the necessary direction and the fundamentals knowledge of doing this research. I would also thank the library staff for their role in availing the necessary books and documents that enable me do the work. ii Summary The report entails the way in which Ralph Lauren Corporation undertook to gain market penetration and survive in the highly competitive market. The report further comes up with conclusions and recommendations that should be integrated to continue enhancing the introduction of a strong brand in the market. Point of Difference and Points of Parity of the corporation are also discussed in this report. iii Table of content Title page……………………………………………………………………………………….i Acknowledgment……………………………………………………………………………....ii Abstract…………………………………………………………………………………….. ...iii Table of content……………………………………………………………………………….iv-v 1 Introduction…………………………………………………………………………………..6 1.1 CBBE………………………………………………………………………………………6 1.2 History of Ralph Lauren Corporation………………………………………………………8 1.3 Application of CBBE Model in Ralph Lauren Corporation……………………………......9 1.31Brands identity………………………………………………………………………..9 1.32 Brand meaning……………………………………………………………………….9 1.33 Brand response…………………………………………………………………........10 1.34 Brand relationship……………………………………………………………………10 1.4 Point of Difference……………………………………………………………10 1.5 Point of Parity…………………………………………………………………11 1.6 Conclusion……………………………………………………………………11 iv 1.7 Recommendations……………………………………………………………12 2.0 Reference……………………………………………………………………………...15 v 1. Introduction This report covers the effectiveness and valuation of the application of the consumer based brand equity model in the attainment of success by Ralph Lauren brand. The report further aims at dissecting the ways in which consumer resonance with the products of a company can best be achieved and improved upon. Branding is important for organizations products, which aim at surviving in the competitive and highly turbulent markets and industry. In this report, the four stages of CBBE model have extensively been discussed and how each stage is dependent on the successive implementation of the previous ones. The report also coming up with conclusions and recommendation to determine whether the particular methods embraced by Ralph Lauren have resulted into desired sales and improved the performance of the products. 1.1 Consumer Based Brand Equity Model The model was developed by Kelvin Lane Keller to assist the companies in the successful development of a brand in the market. How well a brand is introduced in the market will determine the level of customer loyalty that will lead to improvement in the sales level and overall profitability of a product. The model was based on the need to develop a strong brand that would be easily marketed to the customers (Keller 1993). There are four stages in the development of a strong brand according to Keller. The first stage is the identification of the product within the targeted consumers. In this case the company’s motive is to make the product get identified with particular target customers, the ease with which the products name and characteristics are recalled by the consumers. The creation of brand awareness deals with how easily consumers will recognize a brand in particular circumstances and how the brand competes among other brands in the market (Keller 1993). Creation of brand salience will lead to increased sales volume and will be determined by the brand depth and breadth. Depth of brand awareness relates to how fast the brand is recognized by the consumers while brand breadth entails the situation in which the consumers will purchase or prefer the product to solve satisfy their need (Keller 1993). After brand identity, the next stage will be the development of the brand meaning. Here the objective is to determine the performance related issues of the brand. The product that needs to be branded will determine the effectiveness and efficiency of the brand to its consumers. Brand meaning will come into the picture and memory of the consumers after interaction with the said product. Consumers expect that the product that needs to be branded should satisfy their desires and where the products fail to meet the expectation of the consumers, there is likely to be poor product sales realized in the market. The prices of the products, quality, quantity, design, reliability, and products characteristics will be the core consideration of the consumers (Keller 1993). How strong the brands are identified with the consumers, product favorability, and the uniqueness of the brand will lead to the strong branding of the product in the market. If the quality, uniqueness, and preferences are well instituted, then the performance of the product will result into more sales. The third stage of the CBBE model is the determination of brand responses. The reaction of the consumers’ is necessary because it will reflect the judgment and feelings about the brand. Under the judgment, consumers are interested in the quality, credibility, superiority and consideration. Customers will demand quality products that are reliable and unique and which will make them have a feeling that their needs are met. The major concerns of the customers are the social actions that the product causes Keller 1993). The components of customer’s feelings are the warmth, fun, excitement, security, social approval, and self-respect (Keller 1993). Positive responses will be desired in the creation of very strong brands in the market. The final stage in the CBBE model is the creation of the brand relationship. In this stage, the focus is pegged on how well the customers wish to be associated with the brand i.e. brand resonance. There are four levels of customer resonance. The first level is the behavioral loyalty that results into repeat purchase when the product is easily accessible. The next level is the attitudinal attachment In which case the brand is preferred because it the only product existing in the market or that can be afforded. Sense of community and active engagement are the two last levels under customer relationship. Brands which consumers prefer to be associated with are easily sold or marketed hence resulting into high sales. The attaining of strong brands enables a firm to reap from the benefit of realizing pricing premiums and effective marketing and advertising adoption. Brands with high consumer resonance will be easily sold and high returns realized. (Keller, 1993) 1.2 History of Ralph Lauren Corporation Ralph Lauren corporation is a company that deals with the designing and production of designer clothes and has embarked on the sale of home accessories like towels and furniture. Founded by Ralph Lauren in 1967, the company started the production of male polo clothes that were luxurious and was prefered by the men. Later on the company started the designing oof women clothes that were availed in boutiques in the united states. There was further diversification into the dealing in other home accessories that made the company increase in size and become one of the top ten designer companies in the United States. The company has undergone major restructuring and by 2000 introduced online marketing and sales. 1.3 Application of Keller CBBE Model in the Development of a Strong Brand. 1.31 Brand Identification The company can be said to have succesfully launched a strong brand that is renouned among the targeted consumers. The first stage of CBBE model was well done with the company ensuring that they attain identification of the product among the target consumers. The polo shirts that were well designed in a luxurious manner were well recognised by the youths, fans of sports and even the women. This therefore made the consumers easily identify and like the quality products offered by the company making it realise large sales in the market. The diversified production that catered for the needs of the children, women and men of all ages ensured that the tastes of the target market was achieved. The company’s brands like Ralph Lauren Purple label, polo by Ralph Lauren,Ralph Lauren collection are some of the most recognised brands by the consumers. 1.32 Brand Meaning The successful identification of the product among the targeted market led to a succesful brand meaning. With the quality, design of the clothes, their reliability and their availability together with the affordable prices made the brand make an impact among the consumers. The brand was available in most cloth lines and the company managed to design luxurious clothes and home accessories that were demanded by their target marked because the product communicated meaning among the consumers. In cases where sports cloths were required, Ralph brand was an option and this made the product achieve high sales in the market. 1.33 Brand Responses Another reason that makes the Ralph brand realise resonance is the positive responses that the brand illicited among its consumers. Most of the remarks that was made by the brand loyals of the designer product of Ralph Lauren were positive and were admirable by many. Some of the brand loyals of the company sports cloth purchased them during sporting activities and others even attested that there ward roppes were full of the company’s brands. The repeated sales that was being made by ther customers showed that the responses were positive and the corporation had to do everything within their means to satisfy their customers demands. 1.34 Brand Relationship As a result ofg the positive responses, the final step of Ralph Lauren CBBE model was also tremendeous. The relationship that existed within the consumers of the brand and the product was that which ensured repeat purchase and comminity identification. The consumers of the brand realised the need to identify with the brands in order to be compatible with the rest of the society. Others atively engaged in the brand development by continuosly looking into ther products quality and giving opinions on how best there can be inprovement in the production of ther brand. 1.4 Point of Difference(POD) of Ralph Lauren brand Point of difference are the characteristics that a product has that other competitive brands do not have. They are the characteristics that make the brand different from other brands and make the product be prefered by other customers. The POD of Ralph Lauren brand includes the spending of less money on Ralph Lauren polo shirt with the polo horse which signifies quality. The customers are therefore able to acquire quality generic T-shits at a lower price. The other POD of the product is the wide range of products made by the company. The company has several products like men’s clothes, female clothes, furniture and towels. The wide range of products has made the company have strong financial base and enhance the customer range of product choice. Moreover, Ralph Lauren corporation advertising strategies has made it in a position to acquire global customers and reduce the operation cost. As opposed to the other competitors who use the traditional methods of advertising, Ralph Lauren has enhanced the acquisition of new customers and promoted the interaction with customers. This has made the relationship with the customers improve and through interaction, there is high likelihood that their product specification will be incorporated. 1.5 Point of Parity These are the characteristics of a product that are also possesed by other competing prtoducts (Keller 1993). The characteristic make the product be at par with competitive products and does not necessarily influence the decision of the consumers. Failure of a product to satisfy such qualities will make the consumers disown the product and prefer other substitute. In the case of Ralph Lauren corporation, their products are made available at boutiques and clothing lines that make them have a POP. The same materials used in the development of the cloths are used by other competitors e.g cotton. Further, the distribution of the company’s products are made available across the boundaries. 1.6 Conclusions The strong brand development of the Ralph Lauren can be attributed to the high quality production together with the loyalty of the consumers of the product. This has led to repeated purchase and the increased profitability of the company. The diversified nature of the business that range from the production of mens’ designer luxurious clothes, women designer clothes and those of children has ensured that all the segments in the market are fully satisfied. Diversification could also be achieved hence smoothening the economic impacts that could be resalised on the turnover of the products. The wide accessibility of the products across the boundaries and the availability of the clothes in most clothing lines was also a strength in ensuring successful branding of the products. 1.7 Recommendations Ralph Lauren Corporation must develop strategies that will ensure it survives in the hostile and competitive market. The level of competition is fast increasing and the customers needs and preferences must be adhered to if the company has to continue posting positive returns. The following are therefore the reccomendations that Ralph Lauren should incorporate in their operations and decisions: There should be need for the company to fast expand their operations in the developing economies in Asia e.g. Thailand, Malasys, China and Philippines. These global expansion will enable the company incresae their market coverage and sell more products. It will also assist the company in the reduction of the economic risk like global recession that are likely to face developed economies. It must however be noted that such global expansion must be undertyaken carefully taking into consideration the diverse cultural practices and the different economic conditions. The level of customization must also be critically examined and the possible impacts of diseconomies of scale must also be mitigated. At the same time, the company must be alert of the increasing costs of expansion that may deflate the profit margin of the corporation. Another issue that the company must put in to consideration is the decline in the supply of cotton. With the increase in production of luxurious clothes and the increasing number of competitors, the company must come up with ways of ensuring that the quality of their design clothes together with the prices do not cause their customers dissatisfied. With the increasing demand of cotton and the declining supply of cotton, the cost of cotton clothes would rise and this could make the products less competetive. It is therefore recommended that the Ralph Lauren company should look into ways of planting cotton or having a large number of suppliers of the company. This would ensure continued supply and increased production of the company’s luxurious cloth designs. The third recommendation, is thatRalph Lauren should engage in constant market research that is aimed at establishing the demands of the customers and adopt to the changes in the trends of the consumer preference. This will make the consumers proposal get integrated in the company decisions and therefore increase their satisfaction and loyalty. If well incorporated, the company would realise repeated sales and increase their sales turnover. The gathering of the consumers need will also ensure that the diverse needs across ther different regions are all satisfied making the company make mopre profits. Continuous advertising and promotion of the company’s products to create awareness and attract new markets would be fruitful to the company success,. Through advertising, the company’s brand would be easily recognised and recalled by the customers at the time of needs. Customers who are continuously informed of the product existence increases their loyalty to the company’s products and fails to think of the competitors products. Moreover, the ability of the firm to retain their customers and get new customers are all positive in the creation of brand relationship. It is also recommended that the company should continue diversifying its product lines to diversify the risk that may face the company fropm the fluctuating sales of a product line. The company diversification strategy would also mean an expansion on the size and turnover which would lead to better perfomance. Finally, the Ralph Lauren strategy opf going international could be achieved through acquisition of other foreign firms that would enable the company enter foreign markets at a faster rate. Acquisition of foreign subsidiaries would make the comapany reduce the cost of globalization and the legislative barriers that arises from such moves. In the process, the company must remain commited to retaining their strong brand and be commited to retain their identity. The impact of foreign exchange risks that will arise from the globalization initiatives must also be hedged to avoid foreign exchange risks. Methods like currency options, money market hedge and currency swaps will be viable for the business. 2.0 Reference Keller, LK 1993, ‘Conceptualizing, measuring and managing customer-based brand equity’, Journal of Marketing , Vol 57,no.1, pp.1-22. Read More