Branding Concepts, Brand Extension and Multi-brands - Research Paper Example

Branding An Introduction to some branding concepts A Brand is a mark which identifies a particular product or service with a company, manufacturer or service provider. A brand can be in the form of a collection of images and idea such as a name, logo, slogan, and design scheme. These aspects of a brand can be developed to represent implicit values, ideas, a personality or an economic producer. Thus a brand constitutes a symbolic embodiment of all the values that a corporate stands for and its represents information connected to a company. The term brand name is often used synonymously with the term brand, but brand name is usually used to denote the written or spoken linguistic elements of a brand. In this context, brand name will become the trademark of the company as it exclusively identifies the brand owner as the commercial origin of products or services associated to the brand. Once a brand become very familiar in a marketplace, it gets brand recognition. When a brand becomes so popular that it enjoys a great deal of positive sentiment in the marketplace, it is said to have achieved brand franchise. This means that the brand is recognized, without the name of the company associated to it. The total value of the brand to the brand owner is termed as brand equity. It reflects the power of the brand's recognition. This concept is brought out in the book 'Brand harmony' by Steve Yastrow in which he states" The strength of a brand impression in the mind of a customer is not a function of how many times the customer has seen an ad for a product, or how powerful the message in that ad is, but by how well all experiences the customer has with the product blend to tell one cumulative, sensible story." Looking back in time to what the term brand just means, in those days, brand was a term used to denote a mark burned on the skin with a hot iron. In today's world what this term has been transformed into is a tool, which is used to create a lasting impression in the minds of consumers and to create an enduring emotional association in the consumer with a particular company or product. The phrase "brand image" gained popularity when sales patterns began to show that feelings and visuals associated with brands were powerful motivators to for consumers to purchase a particular product. So what is to be understood from the use of brands as an effective marketing tool is that people don't just buy products, they associate a product with certain values which they believe and so they buy products whose brands represent things they value and like. These values could be something like money, intelligence and so on. A brand is also seen to gain importance when it is associated with an actual person who has the same type of attributes with which a company is trying to brand a product. Let's take Chunky Soup and Philadelphia Eagles quarterback Donovan McNabb as an example. Both of them represent the qualities hearty, strong and reliable and brining them together in this way is a very useful way of sending this message to the public. When such ideas are used to build a brand's image, the brand equity turns into a source of competitive advantage and future earnings according to David Aaker1., who is a national authority on branding A look at the concept of brand extension and multi-brands There is a profusion of products in the market today, and many of them are no different from the rest of the group to which they belong. If you go into a local sandwich shop because you want to have some bottled iced tea, you will be seeing a lot of different brands such as SoBe (hip, lizard cult), Tazo (Zen and the art of tea), or Snapple (down-home, New Jersey attitude). All these brands are selling the same thing, which is sweetened flavored tea. The only way that any one of these products can appeal to you over the other is through their brand appeal, and with this we come back to the point that a brand is a very effective marketing tool. According to David A. Weinstein2, in a consumer economy which is highly competitive the success of a product or service very much depends upon its brand name, and this is very evidently seen in our small example about which brand of iced tea which we chose to drink. When a company advertises its product through its brand, is will be using several forms of mediums such as advertisements, logos, their corporate identity, website or brochures, but these are just the mediums of a brand and must not be confused with the concept of branding. Correctly stated a company's advertisement or logo does not constitute their brand image because the essence of branding is leaving the desired emotional imprint in the heart and mind of the consumer. When a company which has a strong brand name decides to bring in new product into the market, they are extending their brand. Take Coco-Cola for example, they have launched products "Diet Coke" and "Cherry Coke, which are basically new or modified version of its main brand. Aggressive brand extension causes a company to have multi-brands Many companies resort to using multi-brands as a marketing strategy. What is this concept of multi-brands Multi-brands is where a company puts forth many brands to represents new products which are really offshoots or developments of its existing products. The purpose in doing this is to absorb that share of the product which may go to minor brands. For example, if you take Nivea as a product, it has got products such as Face Care, Men's care, Nivea soft, Nivea crme and Body care. Each product is a brand and has come from the main product used for skin care. Another example is Procter & Gamble, which has brought out as many as ten detergent brands in the US market and what this has done for the company is that it has increased the total number of "facings" it receives on supermarket shelves. Looking towards the hotel business, we find Marriott uses the name Fairfield Inns for its budget chain, which is another example of brand extension. Problem of cannibalization When the concept of developing multi-brand is carried out very aggressively, a supplier or a company may immediately launch a second brand, close after the release of their main brand, in order to monopolize the market and pre-empt others entering into a market, which they feel is very attractive. This can however, lead to the problem of cannibalization. Cannibalization is a problem which occurs, when a company follows the multi-brand approach and as a result, the new brand takes business away from an established one. Cannibalization is an important consideration in product portfolio analysis. In project evaluation, the estimated profit generated from the new product must be reduced by the earnings on the lost sales. A typical example of this is seen in the case of Coco-Cola's creation of the new brands, Diet Coke or Cherry Coke, which literally take some of the sales away from the original Coke. Another example of cannibalization is when a company (mostly retail outlets), open outlets, tat are located too close to each other as seen sometimes in the case of establishments such as Starbucks or McDonald's. On one hand cannibalization may be positive for the company in terms of new sales, on the other hand, sales from its established brand slacks down, which can be stated as the price the organization is willing to pay for shifting its position in the market. When there is too much brand-extension, the company's investment start to overlap and consumers are just confused with the profusion of brands related to a particular company. At this point the brand ceases to be useful as a tool which creates and a lasting impression in their minds. It just represents some clutters amidst a group of larger clutters. This situation largely happens because marketers fail to look into the prospects of promoting their original brand alone (centralization). What is required is aggressive portfolio management of the original brand, rather than following the concept of introducing too many brands which may just be in directly losing sales for the company in terms of taking sales away from the original brand. It more like one huge level of sales is just a replacement of the sales lost because of the interest lost by the public in the original brand. Introspect into how to resolve the problem of Cannibalization If this problem has to be handled effectively, it's very important for a company to look into the prospects of focusing on one brand image and promoting that image. In doing this, it is very essential for them to set the objectives that want to achieve with their brand. This can be done by answering questions such as what the company wants their brand to do for them and what they want others to know and say about their products or services. These are very important questions because they will decide company personality, image, core competencies and characteristics. A strong brand will help build a company's credibility and enable them to have more influence on your market. It will, motivate customers and clients to purchase from them alone. The next most important step is for the company to fully analyze their target market. This means, they must do an in-depth research of the target market, one which provides them with all the data required to reach out to their target effectively. In order to do this successfully, they must get answers to questions such as who is your target audience is, where is their target audience is located, what do the audience think about their current brand, what the compnay would like their audience to think about their brand, the mechanisms they will use to attract them to their products or services and a look into how their competitors are faring in their marketplace. Once they know the liking, preferences and psychology of their target audience, they automatically become more confident in the steps they have to take to connect with that audience. In this context what is understood is that the power of a company's brand relies on their ability to focus and this is the reason why defining a target market will helps a compnay to strengthen their brand's effectiveness. When creating a brand strategy for a product or service, it is also useful to determine principal barriers that a compnay may face , which are actually market conditions that can keep your product or service from achieving success. Corporate branding is a powerful tool which enables a company to realign its strategy and ensures that the corporation (be it a big or a small one) is leveraging adequately on the un-tapped internal and external resources. This means adopting the concept of strategic brand management, which focuses on the concept and practice of brand management in its totality3. If a company has decided to focus on one brand and has its objective and target audience clearly outlined what they need to do is use a proper delivery mechanism for the brand. The mechanisms can be any form of media but the chosen one must be something that brings out the company's values through their brand. Equally important here is to bring the corporate brand to life through a range of well-planned, well-executed marketing activities, and to make sure that the overall messages given about a brand is consistent, clear and relevant to the target audiences. Once the above mentioned tactics are adopted a compnay will find the concept of focusing on one brand or probably two to three brand rather than flood the market with different brand jut for the purpose of improving their image. By focusing to promote the features of their single brand, they will be spending less money on marketing and advertising. In following their brand objective a company should also follow a plan to assess the effectiveness of their brand. They need to find out how much value their brand provides to them and how instrumental it is in securing competitiveness. In the book 'Brand Valuation' by John Murphy, the author states that brand valuation is a made up of issues regarding marketing, financial as well as legal considerations. The brand equity consists of various individually tailor-made key performance indicators (including the financial brand value) and it needs to be tracked regularly. A brand score card can help facilitating an overview of the brand equity and the progression as the strategy is implemented. Does this means that the concept of multi-brands is completely wrong! Not so, it is understandable for a compnay to introduce new products into the market now and then because, business landscape is one that is ever changing and they have to cater to the tastes of an ever -changing audience. What is not required is for the occurrence of cannibalization. In order to avoid this, a corporation needs to evaluate and possibly adjust the corporate branding strategy on a regular basis. Obviously, a corporate brand should be maintained in such as way that it is relevant, differentiated and consistent throughout time, but this is a crucial balance which should not be done at the cost of cannibalization. The basic parts of the corporate branding strategy like vision, identity, personality and values are not to be changed often as they are the basic components of a company's brand image. A compnay needs to include rather small changes and involve the thousands of daily actions and interpersonal behaviors, which the corporations employ as part of the brand marketing efforts. This also means that complacency should not take root in the organization and affect the goal setting. In order words, if a company has a strong brand image which focuses on only one brand they need to just take it easy and forget about their competitors. This will lead to exactly the opposite happening as consumers will be driven to other band. According to William Weilbacher in his book 'Brand Marketing', brands work only when they are developed using strategies which deliver value and customer satisfaction. In this context, what is required is innovations to be implemented, but such innovations must be subtly implemented and they must not be loud and confusing for the consumer. References Aaker, A. David A, Managing Brand Equity: Capitalizing on the Value of a Brand Name (1991) Arnold, David (The Handbook of Brand Management (1990) Kapferer., Noel., Jean Strategic Brand Management: New Approaches to Creating and Evaluating Brand Equity (1995) Murphy, John Brand Valuation (1990) Southgate, Paul Total Branding by Design: Using Design to Create Distinctive Brand Identities (1995) Weinstein, A., David How to Protect Your Business, Professional and Brand Names (1990) Weilbacher, M., William Brand Marketing (1993) Yastrow, Steve. Brand Harmony (2003) Read More