Key Aspects of Bonds Brand - Coursework Example

Brand analysis report- BONDS inserts his/her s Executive Summary This report addresses various branding concepts pertaining to the BONDS brand in Australia. BONDS has been established since 98 years in Australia as one of the leading underwear brands. The Chesty Bond image and related comic strips have often been associated with the brand and reflect the brand personality traits of masculinity, reliability and comfort. This brand is iconic in that it has originated in, produced and marketed to Australia. However, the brand’s decision to sack Australian workers and move operations overseas has negatively affected its brand equity. In order to further enhance its brand equity, BONDS is also required to innovate further the way its competitor aussieBum is. Finally, it needs to further develop and strengthen its brand positioning rather than relying on its heritage. Customers must also be assured that the brand is “Australian” as the Country-of-Origin and “Made In” effect can have a huge impact on the brand equity of BONDS. Table of Contents 1.Introduction 3 2.Brand positioning and values 5 3.Brand characteristics 7 4.Customer Benefits 8 5.Brand Communities 9 6.Brand equity 10 8.Reflection 14 1. Introduction BONDS is an underwear brand based in Australia that has become a national icon and has existed for over 98 years. Initially targeted at men’s underwear, the company aims at providing “shorts, trunks and low rise” underwear (Dugg.com.au, 2003-2011). Therefore, the main product initially was underwear in a variety of shapes, sizes and colors. Both conventional and contemporary styles are offered by the company to ensure high level of comfort to its customers. The company’s iconic product was The Chesty Bond. Over the years, the company has expanded its product range to including clothing including sportswear and maternity clothing. As of today, BONDS offers not just underwear but clothing for kids, women and babies. As far as the customers of BONDS are concerned, the company focuses on individuals who have a highly active life or work in occupations resulting in high levels of sweating (Dugg.com.au, 2003-2011). Keeping this in mind, the fabric used in the underwear has high absorption capacity that keeps the underwear area dry for long periods of time. (Dugg.com.au, 2003-2011) The elastic bands used on the underwear specifically cater to customers’ need for comfortable fitting and expandability. One of the major competitors of BONDS is aussieBum which produces is underwear in Australia. In 2009, aussieBum’s sales increased by an astounding 40% in the midst of the sacking of Australian workers by BONDS (Stephenson, 2009). The company’s decision to move its operations to China have strengthened the sales of its competitor-aussieBum (Stephenson, 2009). This is because aussieBum’s marketing strategy focuses on highlighting the fact that its products are “Made in Australia”. Therefore, aussieBum’s recent advertisements that bear the slogan “Australian made by choice” have capitalized on the loss of customer faith in BONDS after it decided to sack Australian workers (Stephenson, 2009). Another major competitor in Australia is Aldi which is a discount supermarket chain in Australia offering the convenience of online shopping. Aldi’s fairly high geographical distribution in Australia along with a diverse product range makes it a strong competitor for BONDS (Euromonitor International, 2012). Furthermore, local department stores such as Kmart, Target and Myer continue to serve as competitors for BONDS given their own-label brands, low prices and ability to cater to a wide variety of customer segments including women and children. Furthermore, these departmental stores benefit from the high customer traffic from customers who come to shop for everyday use items such as grocery. Therefore, chances are high that customers would prefer to buy underwear and other clothing from these department stores due to the convenience they offer. Internationally, BONDS competes with brands such as Zappos- an online apparel website in the U.S as well as luxury retailers such as Net-A-Porter (Youl). This is reflected in BOND’s strategy to launch a video marketing campaign for its most recent underwear offerings. Furthermore, it also competes with brands such as Ted Baker in U.K and Adidas as far as BONDS’ classic fit and practical wear apparel is concerned. 2. Brand positioning and values Companies often position their brands to occupy a “distinctive” place in consumers’ minds relative to that of competitors. Competitive positioning is achieved through four ways: establishing a “competitive frame of reference”, developing strong “points of difference” and “points of parity” and a “brand mantra” (Keller K. L., Brand Planning, 2009). As far as the competitive frame of reference is concerned, it is important to evaluate the points –of-difference that BONDS has succeeded in creating. The points-of-difference refer to those attributes that are associated with the particular brand such that consumers avoid associating those attributes with other brands. These associations must be desirable to the target audience, deliverable by the organization and distinctive from other competing brands (Keller K. L., Brand Planning, 2009). One of the major points-of-difference associated with BONDS include its strong heritage by virtue of its being one of the oldest Australian clothing brands (over 98 years old) thereby being a “mature” and “iconic” brand. It is also associated with the “chesty bond”- one of its oldest fictional characters and a national icon for selling the athletic vest that Chesty Bond wore. Owing to this popular figure, BONDS became associated with “masculinity” and “heroic physique”. This is something that consumers can not relate with any other brand as Chesty Bond was exclusive to the BONDS brand. Next, the points-of-parity are defined as associations that the brand has in common with other brands (Keller K. L., Brand Planning, 2009). The points-of-parity with respect to BONDS and its competitors include offering underwear and clothing in several sizes (not just one), offering comfortable fitting, colors and comfortable fabric. All of these offer fabric that is suitable for machine wash and ironing. With respect to the development of points-of-difference and points-of-parity, most brands find an inverse relationship between the two. For instance, promising high quality can often result in companies unable to offer low prices (Keller K. L., Brand Planning, 2009). This happens because of the “high quality high price” perception amongst most customers. However, no such issue has been reported for BONDS which does not struggle with this dilemma. Finally, the brand mantra involves developing the essence of the brand or what the brand intends to promise its customers. These short phrases form the “spirit of brand positioning”. This is usually used for the purpose of aligning internal processes so that all supply chain partners, including employees, can work towards a common goal for customers. BONDS clearly lacks this as there seems to be an absence of phrases one can associate with BONDS. Like its competitor aussieBum which boasts of a clear cut positioning and brand mantra of providing “innovative, cutting edge apparel” to customers, BONDS lacks a brand mantra for explaining for the brand promises its customers. Brand values are the factors that determine whether or not a brand is purchased (Keller K. L., Brand Planning, 2009). As far as BONDS is concerned, the apparels’ comfortable fitting and competitive prices can be considered as brand values for the company. Positive associations arising from celebrity endorsements from Sarah Murdoch, and Pat Rafter can be considered as brand values. 3. Brand characteristics Brands are usually expressed as a set of characteristics including the name, symbol, design, slogan or a combination of these (Kotler, 1994). However, if brands do not go beyond their names, the overall purpose of branding is lost. Hence, a brand must have a deeper set of meanings attached to it (Kotler, 1994). Successful brands are often identifiable by the personalities they posses. The brand personality, therefore, is the humanistic form of the brand or the way in which it is marketed as having human traits. Another way of looking at brand characteristics is to assess the added values that customers attach with the brand. In the case of BONDS one of the added values that can be considered is familiarity by virtue of the brand’s existence since 98 years. Therefore, customers trust BONDS because it has served its customers since almost a century. A strong company name attached to a brand also induces its trial and increase customer confidence (Doyle, 1998). To this end, BONDS is part of the brand portfolio of Pacific Brands which runs the reputation of being a strong parent brand having other strong brands such as Clarks, Jockey and Dunlop (Pacific Brands, 2013). User experience with the brand also defines it characteristics (Bradley, 1995). For instance, the absorbent material used in BONDS’ underwear to keep the area dry during excessive perspiration is another defining feature of the brand. BONDS can, therefore, be termed as reliable and robust brand. Most importantly, the company’s association of the brand with a human personality- Chesty Bond is another characteristic of the brand. The personality traits of Chesty Bond are defined as masculinity, durability and fitness. 4. Customer Benefits These are split into core, augmented and halo benefits. The functional or core benefits pertain to the physical form, texture and performance of the brand (Egan, 2007). This refers to the generic product/service being offered. On the other hand, augmented benefits pertain to the price, packaging, after-sales services, warranties and guarantees that are offered (Egan, 2007). This does not refer to the core function of the product but the competitive advantage that the brand enjoys. Finally, the most superficial “layer” of a brand’s benefits is the halo which includes those benefits that are communicated through marketing to the outside world (Egan, 2007). This involves developing a favorable image of the brand as well as developing the brand benefits, personality and associations (Egan, 2007). These halo characteristics facilitate brand differentiation. As far as BONDS is concerned, the functional or core elements include the actual product including the fabric used in the underwear and the performance of the underwear as being comfortable even during times of high perspiration. The highly absorbing material used helps keep the area dry even during such times. The augmented benefits of BONDS underwear are not significant as the product does not warrant the need for after-sales support or product warranty. In fact, the nature of product is such that product returns or exchange may not be permitted (for hygiene purposes). Unlike its competitor aussieBum that is moving towards the use of ‘sustainable’ fabric and packaging, BONDS has no intentions for doing so at the moment. Finally, the halo benefits for BONDS incorporate the brand image created by the company. The brand is seen as youthful and appealing to a wide range of customer segments (Bonds Australia, 2013). The “perceived lifestyle associations” in the case of BONDS include the association of its underwear products with a fashionable lifestyle owing to endorsement by celebrities such as Sarah Murdoch, and Pat Rafter (Campaign Brief, 2012). 5. Brand Communities Brand community refers to a group of consumers who are formed by virtue of the activities, lifestyle and ethos promoted by the brand (Fournier & Lee, 2009). It is essentially a web of relationships between the brand and its customers, the customers and the organization, amongst customers and between the product and the customers. Companies can strengthen their brand communities by stimulating and encouraging shared experiences of the brand amongst customers. BONDS currently lacks a well thought-out social media strategy. Although the company’s Facebook page boasts a high level of fan following, it appears to be designed without a conscious strategy (Tiphereth, 2009). Therefore, one of the first steps towards development of brand communities would be to go beyond mere mention of BONDS’TVCs towards a more engaging strategy that involves asking questions from consumers and getting them to comment on the Facebook page. Additionally, competitions and sweepstakes could be held along with exclusive promotions for Facebook fans. Drawing upon the social theory of learning, companies can develop communities of practice to bond customers together (Wegner, 1998). BONDS could do the same and move towards incorporation of sustainable material in its underwear. For instance, BONDS could use eco-friendly, lightweight material such as Banana fiber which is highly sustainable. Along the same lines, BONDS could develop CSR initiatives and organize its members towards a cause such as Pelvic Cancer or crotch hygiene or other related diseases to its product. 6. Brand equity According to Keller, brands must be viewed as “pieces of legal property” that have the capacity of affecting the behavior of consumers, being purchased and sold and providing its owner the mental satisfaction that they will be a source of revenue for the owner in future (Keller, 2003). The concept of brand equity is based on the perception of the brand that is formed in the consumers’ minds and the resulting added value that that brings increased profits to the firm (Keller, 2003). There are various sources of brand equity. One of the sources of brand equity is brand awareness which involves the ability of consumers to remember or recognize the brand under various situations (Keller K. L.). Both the number of times the consumer is able to recall the brand and the variety of situations in which he/she is able to do so is important. Advertising plays a crucial role in developing brand awareness. BONDS offers on-line connectivity with its consumers with its baby search website receiving approximately 2.1 million visits each year (Pacific Brands, 2011) . Furthermore, the online platform results in up to 5 times greater chances of shoppers making a purchase in their next visit in-stores (Pacific Brands, 2011). Furthermore, the company has used interactive video campaigns to further increase awareness about the different underwear styles. However, it still lacks extensive advertising through the traditional media such as billboards, TVCs and newspapers. Furthermore, brand associations are also a source of brand equity. These involve associating different dimensions with the brand. Brand associations must be strong, unique and positive in order to drive the behavior of consumers. With respect to BONDS, the brand associations are the Chesty Bond, masculinity, durability (absorbing sweat) and comfort. However, it may be argued that these associations are not so strong since competitors such as aussieBum are continuously innovating and occupying distinct associations in customers’ minds such as sustainable clothing and cutting edge apparel. BONDS is merely its heritage forward with little plans of introducing new fabric for its underwear as aussieBum has done by introducing the Banana fiber. The brand equity (or customers’ reactions towards the brand/product) may also be evaluated via the future earnings of the brand as visible in its contribution towards the corporate portfolio. BONDS belongs to the portfolio of brands owned by Pacific Group. The key brands of Pacific group (including BONDS and four others) hold a share of 85% in the overall sales of Pacific Brands (Pacific Brands, 2013). One major way of creating and sustaining brand equity through turbulent times is engaging in product innovation (Stuart & Sumner, 2012). While pricing, advertising and other modes of enhancing visibility of the brand and increasing awareness often result in short-term gains, innovation is often sought after as a way of enhancing brand equity in the long term. Furthermore, it becomes even more difficult to develop brand equity in highly mature consumer markets as finding new solutions towards “things consumers already possess” is a challenging task and requires extensive innovation (Stuart & Sumner, 2012). Companies often depend so much on the heritage of their brands that they overlook stepping into what is known as blue-sky innovation to stay ahead and maintain the differential power of the brand over non-branded products. This can be said to hold true to some extent for BONDS as it has relied on its 98-year old heritage and the Chesty Bond image to date. At the same time, however, BONDS has succeeded in engaging in innovation (even though it cannot be labelled as transformational innovation). To this end, there is evidence of innovation including the “Zip wondersuit” by BONDS for babies. Therefore, the company is moving towards newer segments (babies’ clothing) as opposed to its traditional focus on underwear. The “terry fabric” being used for babies has resulted in another iconic Aussie creation (Bonds, 2011-2013). Innovations such as these would not only act as a direct point-of-differentiation but also enhance consumers’ perceptions of the clothing’s quality. Another major source of brand equity in this case is that of the Country of Origin (COO) effect. The theory of information processing claims that product cues are used by consumers to form attitudes and beliefs towards the brand which then results in relevant behavior (Bilkey & Nes, 1982). The COO has been labelled as an “extrinsic product cue”. It also denotes what attributes consumers attach to the brand. In general, the COO is often referred to as the home country. The COO and resultant “Made in” tag attached to products also facilitates consumers in developing associations towards the brand (positive or negative) which affect brand equity. Although BONDS boasts of being an “iconic Aussie brand” with its origination and presence in the Australian market since 98 years, the company’s decision to offshore production could have a negative effect on brand equity. In fact, it has already lowered sales by 40% which is a reflection of the negative associations that consumers have formed as a result of the “Made in China” tag. The COO acts as a major factor in shaping the affective processes of consumers by developing feelings of patriotism towards their own country (Han & Terpstra, 1988). This holds true for BONDS as it has been producing in Australia over the years; however, its recent decision to sack Australian workers could have a detrimental impact on consumers’ affective beliefs and, therefore, negatively affect the brand equity of BONDS. This is also visible in the soaring sales of BOND’s competitor aussieBum whose advertisements focus on the “Made in Australia” nature of the brand. Belowthebelt.com.au is another company whose brand equity enjoyed a positive affect (with a 30% increase in sales) due to public outcry against BONDS’ decision to go overseas (Stephenson, 2009). To conclude, although BONDS enjoys positive brand equity from its rich Australian heritage, product innovations, segmentation, positive brand associations and increased awareness through interactive video campaigns, it needs to work on other areas. These primarily include reconsidering the decision to move production overseas to avoid negative brand equity from the COO effect. At the same time, it will have to consider the higher cost of production if it continues to produce in Australia and conduct feasibility of the higher sales versus. higher costs. Also, the company must come up with major innovations to sustain its brand equity and prevent its sales from falling further. 7. Conclusion To conclude, BONDS has largely benefitted from its rich heritage by virtue of its being established since 98 years in Australia as one of the leading underwear brands. It has also benefitted from the Chesty Bond image and the associated image of masculinity, reliability and comfort. Furthermore, the brand’s long associated of being an Aussie brand has further strengthened its position in the market which is reflected in the high contribution of BONDS to the overall portfolio of Pacific Brands. However, BONDS suffers from weak positioning along with factors such as the brand’s decision to sack Australian workers and move operations overseas which has negatively affected its brand equity. Furthermore, research has identified innovation as one of the ways to sustain the brand equity during times of economic downturn. BONDS is, therefore required to innovate by coming up with new sustainable fabric the way its competitor aussieBum has. Finally, BONDS must focus on further developing its brand positioning by acquiring key traits to distinguish its brand from others. The company must also assure its customers that the brand is “Australian” in nature due to the profound COO effect and its impact on brand equity. 8. Reflection One of the key takeaways from this assignment was getting aware of the theories pertaining to brand equity, brand awareness and brand associations. These concepts are at the heart of branding and, therefore, being aware of the latest developments in this field are necessary. Furthermore, I was able to familiarize myself with the definition of constructs such as brand positioning in the light of popular works by authors such as Keller. Perhaps one of the most interesting aspects of this assignment was relating theory to practice. This was achieved by applying the concepts of brand equity, brand positioning, brand characteristics and customer benefits in the context of the BONDS brand. Furthermore, picking information from various sources and classifying its relevance to various concepts was a challenging task. Since there has been little previous work done on the BONDS brand it was quintessential to start from scratch and develop thorough understanding of the brand before attempting to link it to various constructs. This involved deep thinking as well as critical thinking especially in areas where evaluation was required. Therefore, this assignment sub-consciously made me develop a rough SWOT analysis with respect to branding and link it to the sections required. To conclude, this assignment has developed my internet search skills, critical thinking skills as well as the skill of tying together bits and pieces of information into a coherent and meaningful form. Furthermore, separating the relevant from irrelevant information was a challenging task. Therefore, assignments such as these should be encouraged in future as they develop critical skills for survival in the professional world. References Bilkey, W. J., & Nes, E. (1982). Country-of-Origin Effects on Product Evaluations. Journal of International Business Studies, 89-100. Bonds. (2011-2013). ZIP WONDERSUIT. Retrieved from BONDS: http://www.bonds.com.au/zip-wondersuit.html Bonds Australia. (2013, May 19). Our new TV ad with Isabelle Cornish showing off the bright new Collectibles range. Retrieved from Youtube: http://www.youtube.com/watch?v=LSqU4WeeF4s Bradley, F. (1995). Marketing Management. Providing, Communicating and Delivering Value. London: Prentice Hall. Campaign Brief. (2012, February 28). Bonds set to launch The Birthday Project today via Clems to celebrate 35,301 days in business. Retrieved from Campaign Brief: http://www.campaignbrief.com/2012/02/bonds-set-to-launch-the-birthd.html Doyle, P. (1998). Marketing Management and Strategy. London: Prentice Hall. Dugg.com.au. (2003-2011). Bonds Underwear History. Retrieved from Dugg.com.au: http://www.dugg.com.au/bonds-underwear-history Egan, J. (2007). Marketing Communications. London: Thomson Learning. Euromonitor International. (2012, April). Aldi Group in Retailing. London: Euromonitor International. Retrieved from Euromonitor International: http://www.euromonitor.com/aldi-group-in-retailing/report Fournier, S., & Lee, L. (2009). Getting Brand Communities Right. Harvard Business Review. Han, C. M., & Terpstra, V. (1988). Country-Of-Origin Effects for Uni-National and Bi-National . Journal of International Business Studies , 235. Keller, K. L. (2003). Strategic brand management: Building, measuring, and managing brand . New Jersey: Prentice Hall. Keller, K. L. (2009). Brand Planning. Shoulder of Giants. Keller, K. L. (n.d.). Measuring Brand Equity. Retrieved from terry.uga: http://www.terry.uga.edu/~rgrover/chapter_26.pdf Kotler, P. (1994). Marketing Management. Analysis, Planning, Implementation and Control. London: Prentice Hall. Pacific Brands. (2011). CEOs Presentation to the 2011 Annual General Meeting of Pacific Brands Limited. Retrieved from Pacific Brands: http://www.pacificbrands.com.au/media/docs/111025-SM-Speech-Final-bdf442c3-7ccb-4bb0-ae8b-b5a63eeaf65e-0.pdf Pacific Brands. (2013). Pacific Brands Half Year Results 2013. Hawthorn: Pacific Brands. Stephenson, A. (2009, April 02). Bonds anger sees aussieBum sales soar. Retrieved from news.com.au: http://www.news.com.au/news/bonds-anger-sees-aussiebum-sales-soar/story-fna7dq6e-1225699605784 Stuart, J., & Sumner, R. (2012, September). Growing brand equity through volatile times: approaches to innovation. Retrieved from The Korn Ferry Institute: http://www.kornferryinstitute.com/sites/all/files//documents/briefings-magazine-download/Growing%20Brand%20Equity%20Through%20Volatile%20Times.pdf Tiphereth. (2009, June 08). BONDS ART ATTACK. Retrieved from Digital Tip: http://www.digitaltip.com.au/death-of-the-microsite-a-casestudy-bonds-art-attack Wegner, E. (1998). Communities of practice: Learning, meaning and identity. New York: Cambridge University Press. Youl, S. (n.d.). Bonds Uses Video Content for Creative Underwear Campaign. Retrieved from Power Retail: http://www.powerretail.com.au/multichannel/bonds-video-content-campaign/ Read More