Developing Branding Strategies - Essay Example

Antecedents of the purchase of elite brands, their imitations, and non-elite brands form the focus of this dissertation, with the discussion revolving around the macro and micro-marketing of counterfeit goods and the linkage between them.

The act of branding can be traced back to the early 1800s when cowboys would brand their cattle before driving them across the central plains of the United States (Rozin, 2002). To identify which cattle belonged to each ranch, a unique symbol was permanently burned onto the cow. These symbols, in addition to serving as a means of identification, provided a set of traditions and a social identity for the cowboys.

Today, companies use brands to distinguish themselves from their competition and to communicate the unique qualities of their products (Aaker and Keller, 1990; Low and Fullerton, 1994). Once a brand is established, the brand name itself is thought to add value to the product in the minds of consumers. This added value is referred to as brand equity (Aaker, 1991). Companies and designers often employ marketing strategies that capitalize on their brand equity and place a greater value on the shapes and labels of their products than the material from which they are made.

Such companies provide buyers with what is conventionally called elite brands, defined by Silverstein and Fiske (2003) as those brands that possess higher levels of quality, taste, and aspiration than other brands in the product category. These products are often justifiably priced higher than other brands to make their brand seem exclusive and more prestigious. For example, elite designers can transform a 10-pound t-shirt into a $200 sought-after treasure (Chatpaiboon, 2004). Recently, Hermes reported that customers were placed on a two-year waiting list for their most popular Birkin bag, which retails for $6000 (Branch 2004). On eBay, women engaged in bidding wars over a blue Birkin bag for which the winner ultimately paid over $13,000 (Rose, 2003).

Many manufacturers have been successful in commanding a price premium for their brands. However, it seems that some designers and manufacturers have become victims of their success. Once an elite brand has become so closely associated with status and prestige in the minds of consumers, it is only natural that other companies would want to imitate it (Rose, 2003). Those who use brand imitating as a strategy to facilitate the adoption of their new product copy certain characteristics of the original brand (Kotler and Keller, 2007).

Previous research has shown that consumers often use their existing perceptions of a brand to evaluate new offerings such as a product or line extensions (Aaker and Keller, 1990). Because it appears similar to the original brand, consumers will then transfer attributes of the original brand to the brand imitator, thereby affecting evaluations and purchase decisions.