There is no doubt that Olympic sponsorship played an important role in Samsung’s brand building. However Samsung can not merely depend on sponsoring Olympic Games to enhance its brand equity. It adopted many associated programs to support TOP plan.
Reposition of its products. In early 1990th Samsung was still perceived as a conservative manufacturer and always associated its brand with bargains. Samsung realized that low price is just a major means to compete in the lower-market whereas in upscale market technology and brand are competitive means. Samsung decided to penetrate the upscale market and gave up lower-market in order to exalt its brand image. It repositioned all series of its products such as mobile phone, consumer electronics and memory flash to upscale market. Correspond to Samsung’s new position in the market it has relatively higher price in it category. To Samsung higher price would bring more profit and at the same time it is the better imply of good quality. The strategy of reposition helps Samsung starting to build its noblest image.
Technology innovation. Samsung recognized that digital is the future developing aspect of consumer electronics. They regard the digital age as having both incalculable potential and risks. It's a time of intense competition-fortunes can be made or lost in the blink of an eye. (Samsung group timeline and history, 2005) Samsung took this challenge as an opportunity. They switched their core competitive power from mass manufacture to its own brand which based on digital technology. It is well positioned as one of the world's recognized leaders in digital technology and eventually become the world’ top innovative company in technology. It starts to provide consumers with innovative and cutting edge products and rapidly become a huge player in electronics field competing toe to toe with another magnate Sony. Samsung launched an industry design revolution in order to get rid of its image of imitator. It employed world top designers to expand their thought and keep track on the world highest level. It achieved most of the Award of American Industry Design which is the most important award in industry design area on the global basis. Its brand was recognized by the consumers and specialists. The technology breakthroughs enhanced Samsung’s brand image of young, fashionable and strong function.
Demonstration of US market. Us market has a strong demonstration effect on the global market due to its leading status. To some extent, the brands should succeed in US market in order to become the top brand worldwide. Therefore Samsung regarded US market as it’s most important market and put great efforts on marketing in US market. SAMSUNG took part in the Salt Lake 2002 Olympic Winter Games in USA as the worldwide partner in the wireless telecommunications equipment category. Samsung carried out various advance public relation activities and programs centered on the PR pavilion to promote its image of a fist-class corporation. During the game consumers were provided with the opportunity to try out Samsung’s revolutionary products for themselves. Samsung spent considerable funds to sponsor this winter game in USA. After few years’ management, Samsung’s brand disengaged bargains and was regarded as high-class products by the American consumers. Samsung’s success in US market plays an important role in its success in other markets.
To summarize, the key to a successful sponsorship depends not only on the creative and crucial sponsorship itself but also rely on the supporting strategies. Samsung successfully integrated its product strategy, technology strategy and branding strategy into the TOP plan. The TOP plan provides Samsung a road to be the top brands in the world. Without the supporting strategies the TOP plan can not endow Samsung’s brand with internal and rich meaning. The plan comprises huge risk because if the consumers attracted by the TOP plan perceive it as an ordinary product Samsung’s brand would be damaged. Samsung has successfully and fully utilize the benefits of the Sponsorship and was rewarded for its commitment to Olympic Games and other sports activities.
The web’s role in building brand
With the prevalence and development of internet, the Web reveals its important role in marketing communication. According to a global web-based survey by Interbrand, the Google brand had the most impact on people's lives in 2002. It beat established brands such as Coke and Apple. (Gerry McGovern, 2003) This reveals how Web builds you brands differently. In the coming digital age, the strong brands in this era will be those that utilize web as a building tool.
Web became a new communication channel between brands and consumers. It has unique characteristics compared to the most traditional media advertising.
The web is interactive and involving. It provides an innovative way to build brand awareness. For example, when Visa organization plan to set up their long term branding tactic of focusing on young people, they chose MSN Site which is the world's most popular destination on the Web with enormous young users, as the hub of its promotional contest. It chose MSN to build and host the online hub for the promotional competition designed to build brand awareness of Ideas Happen among young consumers. The Ideas Happen campaign allows consumers ages 18 to 29 to submit ideas for businesses and other ventures and vote on the best submissions via a custom-designed site created by MSN. Over three months, more than 5 million unique users visited the site MSN created for the contest. The Ideas Happen campaign is an incredible example of how immediate and interactive of the online medium to make big results happen online. The campaign boosts Visa's image with target market. In addition to the increase in Visa's brand awareness among the 5 million unique users who visited the contest site, the heavy traffic helped build Visa's image among young adults who are still forging lifelong allegiances to consumer brands. According to polling conducted by market research agency Millward Brown, perceptions of Visa improved markedly after the Ideas Happen campaign. The number who deem Visa the best credit card overall increased by 13 percent, while those who agreed that Visa offers unique and different features jumped by 9 percent. In addition, 8 percent more of those polled said they consider Visa the most innovative and forward-thinking credit card company. (MSN Again to Make Ideas Happen With Young Consumers, 2004) Ideas Happen is more effective in reaching our target audience due to MSN. Teaming up with MSN has allowed us to realize the potential of online marketing and allowed MSN to stretch its own limits in terms of interactivity and engaging young consumers
The web offers current, rich information. On Visa’s website customers can manage their Visa card account online. The links on its page can take customers directly to their Visa card issuer, which maintains their personal, secure account information. By providing the current information of account, websites can let consumers to track their transactions on the spot. In addition, Visa introduces its various cards in detail on the website.
Personalization. When customers enter Visa’s website they can select relevant content by choosing from the menu. There are three categories on Visa website which is personal, small business and merchants, corporate and government. People coming to it website with different purposes can simply choose corresponding category and go directly into that area to get the information their need. There is a calculator program in the website to help customers to plan their personal budget on Visa’s website. Moreover customers can order different information of discounts and financial tips through email on the personal basis.
With these distinctive characteristics website can be a key part of a brand building program. It serves as a fantastic vehicle for distributing information, providing experiences, leveraging other brand building programs. It affects brand building from the following three aspects.
Web can stretch the continuity and depth of the single sale channel, consequently expanding existing customers and increasing potential customers. Furthermore it can be taken as a market attempt, helping marketers to leverage marketing promotion programs in other medium. If use properly, website could effectively impel its offline products. For example there was a successful cooperation between Pepsi and Yahoo. Consumers could collect the number on the caps of Pepsi and Mountain Dew and change to credits on the websites of the two drinks. The credit can be used to exchange prizes or as cash for purchase and auction on Yahoo website. This campaign attracted 350 million people to anticipate. Pepsi increased it sale by 5% while the industry has little growth. (Lili, 2003) Pepsi did one similar attempt before without the help of web but failed eventually. Moreover, Pepsi can interpret the consumer behaviors through analysis of the data collected in the campaign and work out the relevant strategy.
Website can improve the shopping experiences accordingly enhance the brand equity. On the website of Co-op bookstore, consumers can search the books they want, preview the abstracts and check whether they are available. Other information is provided to the consumers like breakdown of every shop throughout Australia. In the Co-op shop or at home consumers can order or reserve a book through the on-line bookstore. The interaction between online and offline greatly enrich the shopping experiences.
Web helps to differentiate brand. Product differentiation was regarded as a magic weapon of powerful brand. Without the differentiation brand will be reduced to product, consumers can only choose products from the prices. New brand with high differentiation are usually popular although they do not have high brand prestige. On the contrast high prestige brand with little differentiation will be forgotten gradually by consumers. When product or services enter into the maturity stage, they will reveal commonness and hard to be differentiated. The typical way to be differentiated at that stage is adding new products or services. For example, the customers of FedEx can accurately locate their parcels via its website. This service was even extended to the PDA users. The additional and distinctive service help FedEx enhanced the service quality and relationship between brand and customers.
Web provides a platform for the communication of programs in the company’s overall brand-building strategy. Web could improve company’s brand marketing and sales efforts from internal as well as external. Internally, web offer a special site that every brand-building efforts emerge there. It will help the management to leverage each brand-building project to fit the overall strategy and redress the deviation in time. Externally, a well-designed website could connect every distinct part of business. The website will integrate them to be a continued and correlative means of brand description.
There are several factors will contribute to the success of the web brand-building.
A clear brand concept and position in the market. A clear brand concept and position will impel company’s brand-building process. Companies should make sure to bring their brand identity or core brand elements onto the Web. The integral part of their offline brand identities need to be delivered to the online brand.
Integration of web in whole brand-building strategy. The growing importance of web in building brand attracts more and more attention of company’s management. To use web more effectively company should integrate web into its whole strategy and make sure it is in conformity with other brand-building strategies. Companies’ which leverage their resources between brand-building strategies will achieve greater success.
Strategic alliance with other website or brand. Sometimes web allies can give your brand extraordinary success. Especially the alliance between powerful brands will make the cooperation more effective and cost-efficient. In the previous example Pepsi achieve great growth of sales in its cooperation with Yahoo. Yahoo brought Pepsi’s brand in front of large numbers of people which Pepsi can not access and the hit rate of Yahoo also surged during that period. Visa card attracted its target market of young people by allying MSN to offer MSN Titanium Visa Card. More and more brands become eager to develop alliances through which they benefit mutually and beat their competitors.
Loyalty .On the Web, brand loyalty is rooted in providing customers with an outstanding experience. (Gerry McGovern, 2003) To encourage customers visiting website regularly, websites are trying to build their loyalty through different ways. For example, commerce sites can offer a great selection, good prices, and a simple purchasing process while information sites can offer rich, relevant information in a format that is easy to read. With the help of outstanding experience provided by the websites companies draw their customers back again and again. In additional, companies can use email to offer their customers with opportunities or information which is tailored to their needs. For example a membership registration is provided on most websites. Then you can get more customized services by becoming a member of websites. Websites are building long-term relationship between customers and themselves. This relationship is essentially the loyalty. Websites will benefit from the loyalty their customers have, at the same time customers get their distinct needs and interests more satisfied by showing their loyalty.
The important role of web in building brands suggests that companies that had successfully built their brand offline should make sure to leverage their resources to build their brands on Web. Retail stores should think of building their web-based shopping to provide a convenient alternative to consumers. Magazines should start to device their online editions in order to attract more readers. Web is providing huge exposure for brands. The brands which use them wisely will achieve tremendous advantage.
Brand architecture art of L'Oreal
With the growing globalization of markets and competition, the brand architecture became a key component in international firms’ brand building strategy. It provides a framework to leverage strong brands into other markets, assimilate acquired brands, and rationalize the firm's international branding strategy. The key element contributes to a successful brand-building strategy is a harmonious and consistent brand architecture across countries and product lines. (Susan, Samuel and Edwin, 1999)
L'Oreal, the world's leading cosmetics companies is an apotheosis in brand architecture. It managed very well of its wide range of products and many of them are the world's biggest beauty products. L'Oreal was the only company in its industry continually achieves a double-digit profit for 18 years. Moreover, it is a genuine international company which has operations in more than 130 countries in the world and over 80% of group sales are generated outside France. （）The L’Oreal is known for its diverse brand house which includes brands like L'Oréal Paris, Maybelline, Garnier, Soft Sheen Carson, Matrix, Redken, L'Oréal Professional, Vichy, Lancôme, Helena Rubinstein, Biotherm, Shu Uemura, Armani, Cacharel, Ralph Lauren and so on. L’Oreal’s brand architecture is like a brand pyramid which is used to target different group or level of people.
The luxury products division offers consumers top range of products like Lancôme, Helena Rubinstein, Biotherm, Shu Uemura and Kiehl’s. These are premium products known for their innovation, performance and quality. Some of the world’s top perfume brand like Giorgio Armani, Ralph Lauren was also included in this division. The distribution channel of these brands mainly through department stores, perfumeries, travel retail outlets, and the brands own boutiques. Customers will receive personalized advice at the point of sale, enabling them to choose the products best suited to their needs.
The professional products division is designed to serve hairdressers worldwide. They provide products to meet the requirements of salon professionals salon customers with a wide range of innovative, high-performance products. The professional products division of L’Oréal is made up of four different brands: L'Oréal Professionnel, Kérastase, Redken 5th Avenue NYC and Matrix.
The consumer products division is dedicated to offering consumers its high technology products at competitive prices. The brands in this division covered haircare, skincare, make-up and perfume products. The five major international brands are L'Oréal Paris, Garnier, Maybelline New York, Softsheen.Carson and Le Club des Créateurs de Beauté. They are distributed through mass-market retailing channels.
In addition, L’Oreal has the active cosmetics department offering skin care, sun care, hair care and make-up products. The department’s includes three brands Vichy, La Roche Posay and innéov. They are sold in pharmacies and specialist retailers. These products offer consumers proven safety and effectiveness supported by advice from pharmacists and dermatologists.
L'Oreal used different product division to help it segment the market and form its band house. Brand architecture is the vehicle by which the brand team functions as a unit to create synergy, clarity and leverage. (Aaker and Joachimsthaler, 2002) We can start to learn the important role of brand architecture in companies’ brand building from the following aspects in L'Oreal’s example.
Implement differentia of product and strengthen brand recognition. The consequence of differentia strategy of L'Oreal is that consumers from different income level or education background can find the product which is suitable to their own culture and taste. L'Oreal also focuses on continually strengthening the meanings of its brands and fully utilizes the advantages which are rooted from brand recognition. L'Oreal established very clear identity for each of its products. Each brand has its own image. For example, customers associated Lancôme with the image of stylish combination of elegance, charm and daring. Helena Rubinstein was perceived as a pioneer in cosmetic industry which provides cutting-edge science to the art of femininity and glamour. () It associates with high-performance and luxury as well. Its underlying brand Garnier represents natural beauty. Each brand has its unique symbol which creates a close relationship to its target market.
Distribution based on brand differentia. L'Oreal uses different distribution channels according to the brand position in the market. The mass brand Maybelline promote its brand mainly through TV advertising and product prolocutor. La Roche-Posay, a brand positioned at solving skincare problem, is distributed by dermatologists, specialists of skincare and professional beauty salon. L'Oreal Paris relies on the public praise among professional cosmetic consultant.
L'Oreal embodied culture flexibility. Many star brands in L'Oreal’s brand house are from different culture, but their original culture did not vanish because of being managed by a French company. When a lot of companies are trying to integrate different cultures, on the contrary L'Oreal tends to develop multi-culture in its underlying brands. This strategy proved to be very successful in reality and even played a key role in L'Oreal’s success. The most representative example is Maybelline New York. L'Oreal developed Maybelline’s brand culture instead of upsetting it after its acquisition of Maybelline. The sales figure dramatically rose after the acquisition and Maybelline product enter into more than 90 countries. Maybelline became a stylish global brand for all women all around the world from a merely regional brand.
L'Oreal provides a platform for the brands under its brand architecture. Every brands target at a specific market and keep the specialty of its own brand. At the same time fit into the overall brand pyramid.
L'Oreal’s innovations always start from its luxury brands then penetrate to the brands in different price level and different markets eventually implemented in its consumer brands. The innovations based on the same technology platform will reduce the cost. The knack for L'Oreal to create the advantages is to spread around strategic investment by sharing the production of innovation between different product divisions. L'Oreal not only focuses on the single brand but also pays attention to the technology relevancy in the series of brands. For example, L'Oreal first introduced a breakthrough anti-aging composite by using Lancôme brand. Subsequently, it was implemented in Vichy brand and brought into the consumer product division eventually. The broad distribution channel of consumer products was used to promote this technology at last. In term of same products in the different market, L'Oreal also exerts the technology platform to meet the specific needs of consumers. From L'Oreal’s experiences, the core technology platform is a key component to the success of an international company with complicated brand house. Without leveraging the resources between brands, it will cause increase of operational cost and waste of resources and will be very hard to manage the L'Oreal’s sophisticated brand architecture.
Other than building the brand structure according to the product identity, L'Oreal relied on distribution channel to carry out its strategy of brand structure. There are four product departments in L'Oreal’s structure. Every department has several brands and each brand has many names. They are conspicuously different in packages and with distinct image and advertising. The different brands share the resources of distribution channel and have high integration effect on management. The luxury brands of L’Oreal are sold in strictly selected distribution channel like department store, perfumeries and tax free shop. Professional products are provided to the hairdressers. Active cosmetic products are sold in pharmacists. The most important sector consumer products are distributed through mass consumption channel like department store and supermarket.
L'Oreal has formed a brand matrix with great power of integration. Any new brand merged into the relevant channel will fully utilize the resources in existing channel as well as expand L'Oreal’s whole distribution channel by integrate its original channel.
The dissemination of brand will improve company’s overall influential power. L'Oreal recognized the leverage effect of it brand and focus its propagandas on brand rather than propagandas on particular product. It is dedicated in building the relationship between its brand and the market. It aims to enhance brand power by maintaining the good image in publicities. L'Oreal’s efforts were also embodied on its marketing strategy. It always concentrates on supporting those brands which can most represent its advantages and leveraging resources to those premium products.
Firms that aim to expand internationally or strengthen market position tend to acquire new brand into the brand architecture. Acquiring influential and well positioned brand is an important strategy of L'Oreal in developing its brand architecture. It achieves rapid growth by acquiring brand in same or related business and is continually seeking these opportunities on the worldwide scope. L'Oreal expanded its brand architecture by acquiring Maybelline brand in 1996, which was a very successful transaction. The Maybelline’s image was enhanced by branded L'Oreal while L'Oreal got complementary in its brand architecture. Recent years in Asia, it acquired the third skincare brand Mininurse in China and Japanese top luxury brand Shu Uemura. These acquisitions represent L'Oreal’s ambition to Asian market. They have the same product business with L'Oreal. In China the acquisition will enhance L'Oreal’s market position in skincare and acquire distribution channels Mininurse had. It is also a preparation for the future expansion in the most fast-growing market China. By acquiring Shu Uemura, L'Oreal want to use this Japanese brand to compete with SK-Ⅱwhich was a competitors in the same level in order to meet the trend of prevalence of Japanese cosmetic brand in Asia. This is considered to be an effective and cost-efficient strategy which is consistent with L'Oreal’s overall brand architecture.
In summary, companies will be more successful by constructing a well-designed brand architecture.
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