What is a brand ? Why we need branding ?
I. INTRODUCTION
What is a a brand ? Why we need branding ? A brand is identified as a name, term, design, symbol or any feature that identify a seller's goods or services from those of the other sellers1. Branding is the goods and/or services plus added values that provide functional, economic and psychological benefits for the end-users in term of Quality, Price and Image.
Definitions of a "brand" ranged from "a unique or differentiated product" to "a consumer recognized name" to "an identifiable image or personality tied to a product". Some respondents went further to assert that a "brand" is the actual relationship that a product has with the consumer, while others were more practical in assessing that a "brand" is the extra value-added that a customer is willing to pay for that branded product.
BRAND; An asset, simply stated, is a property, with an assumed value that should be consistently maximized by an organization. A brand is a perceived image residing in the mind of consumers.A strong branded culture sets the quality/value standard. This becomes the corporate guarantee; the basis of consumer trust; indeed the brand becomes the consumer's editor of choice; even that highest level of brand loyalty : a lifetime relationship.
However, in todays world, propositioned by an estimated 1,000 brands a week, consumers have become highly sophisticated - and very demanding. Once, manufacturers designed products around their core technologies, a strategy that worked in an era of rapidly growing demand. Now, companies face the prospect of too many products chasing too little global demand. Marketers, in response, need to concentrate ever more on quality and service - not simply satisfying consumers' current needs, but anticipating future ones as well.
Moreover, Major BRANDS have been under unrelenting attack from low-priced alternatives( ie: Compaq in PC system against IBM to Procter & Gamble in personal care products.) and also retailer's own label.(look alike products), the makers of megabrends have blinked.This is compound by the fact that brand in the 90's have been overvalued according to the accounting valuation. In April 2, 1993, when Philip Morris cut the price of Marlboro cigarettes by 40 cents a pack.. That was on a Friday (Marlboro Friday). On Monday, the stock market value of packaged goods companies fell by $25 billion. Everybody agreed: brands were doomed.
So does all these news hinder an end to the era of megabranding ? Are brands dying and brand building is dead ? or is these an indication of a new era of brand building & managing ? and the turnaround in brand fortunes can be explained by market changes(ie: better informed & educated customers, the speedy response of imitators and increase retailing power.) couple with the generally poor brand management I will discuss the arguments for & against the statement concerning the dearth of branding.
II. ARGUMENTS FOR THE CONTINUES FORCE OF BRANDING.
Branding is currently at a crucial phase. The core principles of branding will remain the same but the actual execution of brand strategy will evolve to suit the changing consumer and the changing marketplace. This may involve re-evaluating the brand across all its different aspects. A brand will have to be benchmarked against the needs of the consumer within the framework of the marketplace.
The Brand Experience
A brand represents an experience for consumers and, as such, becomes less associated with an individual product or service than ...
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II. ARGUMENTS FOR THE CONTINUES FORCE OF BRANDING.
Branding is currently at a crucial phase. The core principles of branding will remain the same but the actual execution of brand strategy will evolve to suit the changing consumer and the changing marketplace. This may involve re-evaluating the brand across all its different aspects. A brand will have to be benchmarked against the needs of the consumer within the framework of the marketplace.
The Brand Experience
A brand represents an experience for consumers and, as such, becomes less associated with an individual product or service than the brand values. company's manufacturing competencies become less relevant than its ability to understand consumers and to manage a brand. Production can always be outsourced. In practice, it means that a brand can be extended across seemingly unrelated product and service categories if it maintains the same core brand values. Virgin brand which started in record retailing, moved into the associated areas of record company, film and video before the first significant strategic discontinuity with the launch of Virgin Atlantic. Since then, the brand has been extended into soft drinks, vodka, television and radio, financial services, rail travel, clothing and cosmetics.
The Differentiated Brand
Different brands will need to use different forms of differentiation and for different consumers. There will also be a trade-off between short-term competitive advantage and long-term differentiation. Service aspects will be the key to securing brand differentiation in the future. Branding is about providing a means of differentiation. This will become increasingly vital as the market and, in particular, the competitive situation evolve. Sustained differentiation will also enable a strong defence against me-too products(imitator & look alike). A low price may become less a means of discrimination than currently. Information about pricing will be more easily available, even automated through intelligent agents. A low price policy contradicts brand building. Companies that opt for a low price strategy will find that short-term volume gains will be at the expense of longer term profitability. Furthermore, not only will there be less funds available for investment but the brand will be devalued in the longer term. For a market leader this is especially so. Negative marketing will have an adverse impact on the brand.
INNOVATION.
Innovation is by far the most potent weapon against a brand's commoditization (Brand Dilution). So, Continuous investment in products and services innovation and customer value creation, keeps copycats at bay. However, such investment can prove expensive.(ie: Gillette spent $200m in bringing Sensor Hi-Tech shaving system into the market then it enjoyed the lion's share of the world market for shaving products without the threat from copycat competition.) This type of investment can only be afforted by the already megabrand company. These company can invest into enhancing the existing branded goods.
GLOBAL BRAND
Global brands revolve round relationship values (not products per se). This ultimately means that brand stretch depends largely on the imagination and pride of the company's people. In a network of companies that share a global reputation: "employees who believe the name stands for something will act as its best custodians. The essence to build brands not around products but around reputation. The great Asian names(ie: SONY, MATSUSHITA) imply quality, price and innovation rather than a specific item. I call these "attribute" brands: they do not relate directly to one product but instead to a set of values.
TAKING RISK (RADICAL MANAGEMENT)
What is needed is an attitude of creative brand building, chatting new paths, setting new market and performance standards so as to retain sxisting consumers and attract new ones. Top management must accomadate with unconventional decision that go against the grain of their conventional organization. They should adopt & embrace unorthodox solution. (ie: SWATCH among swiss watch industry.). the factor can only be adopt by the big brand company with lots of capitals.
RETAILER BRANDS STATUS.
Retailer brand are legitimate brands in their own right. Today no one would dispute the fact that Mark & Spenser, Boots, Sainsbury, Tesco have sucessfully achieved brand status. Hence no matter whether it is manufacture brand (ie Heinz beans) or retailer brand(ie: Sainsbury or St. Michael beans). At the end It is still a brand on it's own. So the notion that the age of branding is over would not be justify.
BRANDS have declined not because consumers have stopped shopping for superior value, but because companies have failed to deliver it in a changed market environment. The premium price commanded by the Branded goods could not be justify by their Quality, Price and Image
III. ARGUMENT AGAINST THE STATEMENT.
A brand is a contract. This implies constraints. First of all that the various functions of the organisation converge: R&D, production, methods, logistics, marketing, finance, service. Strong brands bring about internal mobilisation and external federalisation.
Overall, companies revealed that a lack of understanding of what the brand stands for was the most critical threat to the brand, with inadequate funding a close second and not enough research And private label threats third. Successful companies were even more concerned about "brand confusion" than were less successful companies (50% vs. 18%), indicating that changing market forces and consumers' fickle nature are causing concern even within the most successful companies. Interestingly, low senior management commitment was not as critical relative to other threats as companies recognize that without truly understanding the brand, no amount of commitment, in terms of dollars and resources, will lead to ultimate success.
The Shortening of the Product & Brand Life Cycle
this is a factor of the intense competition in the marketplace which means that new products have to prove themselves very quickly or be delisted. Short life-cycle products will also require quick payback. Successful brands of this sort will make profits and then disappear or be quickly updated and reinvented.
Hyper-Segmentation
As we move from mass marketing to mass customisation we move through hyper-segmentation. This refers to many brand variants, each targeted at small, distinct groups of consumers. The brand remains constant representing an endorsement of the product through its associated values. This goes beyond straight demographics. Which variant of the product is right for your lifestyle, occasion or mood at the time?
We are moving from the four Ps of mass marketing to the one C, the consumer, of relationship marketing.
DIFFERENT CONSUMERS
Nowadays, Consumers are more educated and better informed and they tend to be more sceptical of the promotional claims backed up by actual delivered values. For examples, More up-market brands family car buyers make their choices after consulting road test result and they are more eclectic.(ie: the story of the merc-benz A-class family car). Their behaviour does not quite fit into the old and convenient socio-economic segmentation schemed.
FASTER COMPETITION.
Competition bahaviour is shifter today. The speed with which the innovation are imitated by rival is unbelievable. In the PC market, the accelerating arrival of lower-price'imitator' products often within a matter of months has shorten the phase in which a unique concept could expect to reap premiun prices and high margins. This is evidenct by the replacement of IBM by COMPAQ (which is often known as a small clone maker)as the largest PC maker in the world
BETTER RETAILERS
Today's retailers know more about the performance of the brands they sell than do the actual manufacturer. They are also managing their own private labels with greater professionalism. Gone are the days when private label meant poor quality, narrow variety or inferior packaging. Nowadays couple with low prices, retailers' own brands enjoy features comparable to those of branded products.
IN UK the development of 'own-brand' have allowed retailers to become brands without establishing manufacturing capacity. It is generally accepted that own brands are inexpensive, competitive, improved quality and innovation would ensure continued success of the retail concept. Ie: own label now account for nearlly half of the grocery sales.
Increasingly, major retailers have introduced cross-store, cross categary brands such as Boots & St. Michael. Moreover, continued growth in own brand sales have allowes the retailers greater leverage over the branded manufacturer. This is evident in 1996 by the deision of Heinz to begin contract own brand manufacture.
Alternative Distribution and Communications Channels
We are already seeing the development of a number of products and brands that are choosing to avoid traditional retail and promotional channels in favour of a new approach. This results from the increasing difficulty of selling through traditional, mass-market channels where competition for shelf-space is intense and, in some markets, where the retailer has become very powerful and is the frame of reference for the consumer ahead of the manufacturer's brand. At the same time, marketers are looking for greater efficiency and accountability in their communications and so are moving towards communications channels where effectiveness can be more accurately demonstrated.
Consumers' acceptance of home shopping offers the potential for many manufacturers to offer a direct service avoiding retail outlets altogether. This is witnessed by the pioneering brands First Direct and Direct Line Insurance. The Internet is a global communications and distribution medium and has the potential to have a substantial impact not just on communications but also on the distribution of many goods and services.
Poor brand management.
Brand management in large company has fallen victim to its own success. Aimed at maintaining a comfotable status quo, short termism, risk aversion and bureaucracy seemed to have displaced long term vision, innovative thinking and a killer instinct the very ingredients responsible for the rise to success of the magabrand. Another things is the premiun price charged for the branded goods. Recent studies show that greater price differential between branded goods and the retailers own brand. The better own brand label perform.
CONCLUSION.
IN conclusion, let us return to the original question : Is the age of branding over ? and do brands have a future ? The answer lies in the extent to which brand management meets the challenges of the new basics of brand building- the practices that aim to outperform competing offerings by giving the consumer a better deal, a superior value at a competitive price. Failing that, the future will belong to the more efficiebt price discounters and no-frill marketers.
Quoted from P.D. Bennet, Dictionary of Marketing term, American Marketing Association, 1998
