Brand Management Strategies for Building and Managing Brand Equity

This document discusses the importance of branding as a marketing tool and how it has evolved in business practices. It also explores the key components of successful brand strategy for building and managing brand equity. Additionally, it covers different strategies of portfolio management, brand hierarchy, and brand equity management. The document focuses on the case of Tesco, an international company in the retail sector.

Brand Management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Importance of Branding as marketing tool, why and how it have been emerged in business
practices.......................................................................................................................................3
Key component of successful brand strategy for building and managing brand equity..............5
Different strategies of Portfolio management, brand hierarchy and brand equity management. 7
Evaluation of the way brands are managed collaboratively and in partnership both at Domestic
and global level............................................................................................................................9
Evaluate different types of techniques for measuring and managing brand value using specific
organisational examples.............................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Brand management is series of techniques that is used to enhance value of products or
services of company or its reputation in minds of people so that they are motivated to become
part of organisation for satisfaction of their respective requirements. Marketer is mainly
responsible for analysing existing brand image and find different method that can be used to
promote company and its products to maximum number of customers. This report is about one of
the international company named as Tesco that offers range of products starting from home care,
personal care to financial services. Company have strong market share and products portfolio
that helps in adding new and new customers to the organisation. The report has contained
information related to importance of branding as marketing tool and why, how it has evolved in
business practices. It has also covered detailed related to the way brand are collaboratively or in
partnership manage at both domestic and global level. At last it explained about different types
of techniques that are used for measuring managing brand value of organisation.
Importance of Branding as marketing tool, why and how it have been emerged in
business practices
Branding is a term that means recognition of company (in terms of its name, symbol or
design) by number of people that are living in society so that they are influence to make purchase
from specific firm to satisfy their respective requirements. Tesco have maintain strong brand
image in market that have contributed company in gaining differentiate or competitive
positioning in retail sector of United Kingdom. Importance of branding as a marketing tool for
Tesco can be illustrated as follows:
It contribute in enhancing value of business: Branding act as a marketing tool as it create
awareness of company in minds of thousand and millions of people thus lead in enhancement of
overall profitability and market share (King, 2017). Therefore, it is important marketing tool for
Tesco as it helped in increase value of business among wide range of customers.
Add new customers: Company always market its products and services with main objectives to
increase sales volume and profitability of firm. Branding as one of the marketing tool helps in
retaining existing users and adding new consumers within organisation. Thereby Tesco by
focusing more on building and maintaining strong brand image is able to contribute towards
future growth and success of enterprise in retail industry.
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Branding support advertisement: It is another point that state branding as important marketing
tool that induce large number of customers to prefer products or services of specific firm rather
than other competitors. Tesco have strong brand image thus it act as advertisement or promote
customers to buy its products as they are highly aware of quality, perceived value provided by
company (Prymon, 2016). Branding also appeal to people about company value, its products,
helps in building strong relationship with customers or their confidence and trust level to select
only Tesco for fulfilment of their respective requirements.
Improve employee’s pride and satisfaction level: Most of the people want to work with
enterprise that have strong image in market as they feed pride or more satisfied. Employees of
Tesco are happy and satisfied to work for growth and success of firm as it have maximum
market share in retail sector of United Kingdom. They are highly determined and dedicated to
offer qualitative products and services to customers thus it act as a sales promotions and
satisfaction of customers requirements beyond their expectancy level.
Contribute in increasing revenue: Branding also helps in increasing revenue and market share
of organisation overtime by making more and more individuals parts of organisation. Tesco have
strong brand image so it can easily diversify or enter into new market to add new customers and
enjoy higher profit margin for longer run (Bıçakcıoğlu, İpek and Bayraktaroğlu, 2018). So,
company by offering valuable products to end customers have built strong reputation of
organisation and increase overall sales and revenue.
How and when Brand has emerged
Branding have emerged since number of years, it was referred as piece of burning wood
or derived from word named as Norse which means “ to burn”. In AD 1500, brand is know as
burning mark on livestock or cattle, then in 1820, it was used to distinguish between goods that
are shipped through logo or special symbols. In 1870, brand was used as register trademark so
that no other enterprise can operate similar business in order to attract more customers within
organisation. On the other hand in early 1990, brand has become more valuable or act as
advertisement method by emotionally connecting with people. Then it can 1980 i.e.,
globalisation of brand in which companies started building brand image or reputation in order to
attract maximum number of customers in the organisation. Recently with innovative in
technology, branding has moved online as companies are making use of social sites to generate
awareness among people and enhance profitability of firm. There are many reasons which
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illustrated why branding has evolved in recent years as it helps in creating memorable logo,
increase in value and profitability of company. It have emerged as due to strong brand image
customers can easily trust and confidence particular brand thus make payment to purchase
products for satisfaction of their needs. Organisation through strong branding can easily
differentiate itself from other competitors in market thus enjoy more customers and sales. So, all
this are some of the factors that have contributed in emergence of branding as marketing tool in
recent circumstances.
Key component of successful brand strategy for building and managing brand equity
Marketing manager is responsible for formulating effective strategies or plans key
actions that can be taken for building and managing brand equity of Tesco in international and
domestic market. Strong brand helps firm to gain competitive advantages therefore manager of
company have put its maximum amount of time, efforts and money in developing strategy that
can contribute in effective management of brand equity of Tesco. There are numerous
component of successful brand strategy such as Brand promise, target audience, brand voice,
positioning and values that are use by marketing manager of Tesco to promote grow and
expansion of enterprise (Mogaji, 2019). Therefore some of the key components of successful
brand strategy for building and maintaining brand equity are discussed below:
Target audience: There are different types of business in external environment like B2B, B2C
so respective the target audience also differ. Such as in B2B, company like to sell products
directly to consumers while in B2B, products are offered to another business for future sells. So,
Tesco is B2C organisation thereby it have formulated several strategies to influence customers
i.e., offer qualitative products and services at minimum rates. Tesco marketing manager as per
target audience have decide particular strategy so that maximum outcome can be gained within
minimum inputs.
Brand promise: It can be stated as message that each brand convey to its target audiences so
that they are influenced to select particular products of organisation for satisfaction of their
requirements. For example: “ Serving shoppers a little better every day” is statement that
illustrate that company have promised to provide quality, more better product ever day so that
people can enjoy better lifestyles. It promise to offer products or services that provide good
experienced to them thus all such strategy of firm have lead in adding new customers within
organisation over period of time.
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Brand perception: Most of the customers of Tesco are happy and satisfied with price and value
offered by company. They always prefer Tesco products as compared to other competitors in
retail sectors as it offer more value at lower rates (Piehler and et.al., 2016). People belonging to
age group of 31-45 and over 60 are more satisfied while 16-30 age groups are less so marketing
manager needs to set strategy to enhance value of company in minds of several individuals.
Core value: It is another key component of successful brand strategy that contribute in retaining
satisfaction of customers for longer time frame. Tesco marketing manager have make use of this
strategy by deciding value and ethics that company will follow while operating its key functions.
“Like no one tries harder for customers” it is first core value that is set by manager which state
that company spend lot of time to understand customers requirements so that it can be first to
meet them. “ We treat people how they want to be treated” it is another core value that is abide
by Tesco as it have ensure that all employees or people are offer equal respect, recognition and
chance to share their knowledge and experienced. “ every little help makes a big difference” this
value stated that company have taken crucial steps for sustainable management, maintain quality
of products and enhance lifestyles of people (Xi . and Hamari, 2019). So, core value strategy of
Tesco has helped in gaining maximum market share in retail sector.
Public relation: Now - a -days, people wants to have more personalised services or unique
method to get products and services. Public relationship has become one of the most crucial and
successful brand strategies that help in maintaining brand equity of firm. Tesco through fulfilling
its promise by offering products or services as per expectancy of customers have built strong
relationship with number of customers (France and et.al., 2018). It has tried to adapt to external
changes, trends or innovation so that qualitative and effective services can be offered to them.
Digital media have also contributed in building public relationship or generating more awareness
of firm in minds of customers. Tesco marketing manager can easily collect and gathered data
related to experience and feedback of customers thus take steps to improve overall process so
that overall goals of firm can be achieved.
So, all these are several component of successful brand strategy that are used by Tesco
for managing and building brand equity.
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Different strategies of Portfolio management, brand hierarchy and brand equity
management
Portfolio management strategies are approaches or methods that are used by organisation
for effective brand management or portfolio so that maximum return can be generated at lower
cost possible. There are two most common approaches that are used by marketing manager of
firm to minimise associated expense or cost like passive portfolio management and active
portfolio management. Therefore, different portfolio used by companies for effective brand
management and success of organisation are stated as follows:
Active portfolio strategy: It focus or emphasis more on specific style of management that is
used by firm in past can contribute in generating more return or have capacity to beat market
situation within less cost. Active portfolio strategy contributes in taking advantages of market
inefficiencies as advice from expert, manager and analyst are taken for better outcome.
Passive portfolio management strategy: It is just opposite strategy of active portfolio as it
work appropriately in effective market condition and unable to beat market or generate regular
return. Thus, company make use of low cost investment strategy in order to enjoy return or
outcome for longer time frame (Junior, 2018).
So, out of this two portfolio management strategies Tesco have make use of active
portfolio strategy that helps in taking benefits even in ineffective market situation. It has high
qualified manager and expert that regularly evaluates and analysis market condition thus take
correct decision about the way company can grow and succeed in competitive environment.
Therefore, active portfolio strategy of firm has contributed in yielding more profit margin ore
return on total investment. Like Management of Tesco known that people of UK are highly
price sensitive so it have make use of cost leadership strategy to create brand image or gained
maximum outcome. Thus low pricing has helped in brand identity and growth of firm.
Brand hierarchy
Brand Hierarchy can also be termed as structure in which the brand is arranged within
organisation so that people can easily distinguished and select products or services as per their
choice and preferences. There are different strategies of brand hierarchy that are used by
organisation in order to increase overall profitability of organisation. Like:
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Umbrella or Branded house: It is also known as master brand as all products and services of
firm are directly linked with main brand of organisation. It is adopted by most of the organisation
in order to promote several products and services with single name or corporate brand name of
enterprise. The biggest disadvantages of Umbrella brand house is that it has associated high
reputation risk that means failure of single products can spoil whole brand image of enterprise
(Viktoriia, 2020). This type of strategy is mostly used by small business because it is most ease
and simple method of management of structure of brand.
Products or house of brand: It is another second most used brand hierarchy strategies by large
number of organisation as it emphasis on creating independent sub products and their brands.
Thus, there is no relationship between main brand and sub brand of company thus it save from
reputation risk that is present in branded house.
Endorsed: It is combination of both branded house and house of brand as in it individual or
single brand of company is directly connected or linked with parent brand. In another words,
parent brand is neither centre nor stay in background so it is most beneficial for enterprise that
have weak sub brand but strong parent brand (Paul, 2019). For examples: Facebook have strong
brand image so it have make use of endorsed brand hierarchy to gain competitive advantages.
Hybrid: It is also brand hierarchy strategies that combine features of all the above mentioned
structure and it is most suitable for enterprise that is planning to acquire new brand. It is best
suitable for large and complex organisation therefore Tesco is huge enterprise with numerous
function so it have make use of Hybrid brand hierarchy strategy to attain its respective
objectives.
Different strategies of brand equity management
Brand equity management can be defined as value added to products or company so that
people are influenced or attracted to be part of firm for satisfaction of their respective needs.
There are four dimensions on which brand equity emphasis that is brand loyalty, brand
awareness, brand association and perceived value. Keller customers based brand equity Model is
used to understand the way Tesco have managed brand equity:
Brand Identity: Tesco have effectively built its brand identity in minds of customers by
delivering valuable products and services to customers. People of United Kingdom are aware
that Tesco deals in better qualitative products at reasonable rates thus it helped in developing
strong brand identity of company (Von Wallpach and et.al., 2017).
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Brand meaning: Tesco by promising people “Serving shoppers a little better every day” is able
to create meaningful image in minds and hearts of customers. Tesco by delivering innovative
products and services or better performance have create what does brand means to customers.
Brand response: Customers or people living in society have positively response to Tesco brand
as they always tries to intake or consumer its products rather that other competitors in market.
Brand resonance: Tesco by changing or adapting its operation as per external change and trends
is able to retained customers loyalty and satisfaction level for longer time frame. 24 hours
customer’s services and feedback through digital media have contributed in improvement and
fulfilment of customers requirements (Dung, 2019).
Evaluation of the way brands are managed collaboratively and in partnership both at
Domestic and global level
There are different method that are used by Brand such as Tesco to manage collaborative
or partnership at both global and domestic level so that desired goals can be achieved in best
possible manner. Brand leveraging is strategy that is use of existing brand name to support new
products to enter into new market or communicate crucial information of products to customers.
The way Tesco can make use of collaborative and partnership practices for brand management at
both domestic and global level are discussed below:
Brand extension: It is strategy in which firm make use of existing brand name of company for
new products category so that it sales volume can be increased in limited time frame. Brand
extension strategy cannot be fruitful in unrelated market or even cause loss of credibility in case
it is extended too far. Thus, Tesco marketing manager in order to manage its brand image have to
analysis and find out which product categories in which it can be associated so that maximum
benefits can be enjoyed by firm (Karanges and et.al., 2018). Advantages of brand extension is
that it reduce amount of risk and associated cost as company can easily attract customers through
existing brand image of firm. It also contribute in enhancing brand image of enterprise,
consumers have more options of products to select for fulfilment of their respective
requirements. So, company is able to earn higher profit margin by reducing overall promotional
expenditure that it have to incurred to attract new customers for growth and success of firm in
global environment.
Line extension: This is most effective strategy to approach new range or segment of customers
of organisation as company have planned to launch new products or make some variation in its
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design like in flavours, size, colour and models. Tesco while planning to expand or enter into
new market in partnership or collaborative can effectively managed brand through line
extension. It will help company in attracting or inducing new prospect customers to use products
or services of Tesco for fulfilment of their respective requirements.
Brand stretching or vertical extension: In this method or strategy firm plans to enter into
value segment market instead of existing market in order to earn more profit margin and market
share. There are several reasons for which brand stretching or vertical extension strategy is used
by firm like existing market is saturated, more opportunities in premium segment or increase in
competition level in existing market. Tesco has limited presence in global environment so
company in order to make optimum utilisation of opportunities can make use of branding
stretching strategy to manage brand in partnership. Up- scaling and down-scaling and mother
brand are some of the ways in which vertical extension can be done by company to attain its
objectives (Popp and Woratschek, 2017).
Therefore, these are some of the ways brand can managed partnership and collaborative
practices in both domestic and global market.
Evaluate different types of techniques for measuring and managing brand value using specific
organisational examples
There are different approach of brand value which can be illustrated as follows like market
based, cost, income, research and interbrand approaches that could be useful in measuring brand
value of enterprise. Such as in market based: manager evaluated actual value of assets and
liabilities or market value of firm, its awareness in minds and hearts of customers. Turnover and
price to earning method can be used by company to measure their existing value in market.
Cost based brand valuation method is sum of development cost, advertisement, marketing etc
that are incurred in order to build strong brand image of enterprise in minds of customers.
Income based: It is method that focus on present value that company is enjoying due to strong
brand image in market thus it evaluated actual profit company can gain in future due to existing
brand name of firm.
Brand awareness: It is the first technique which can be adopted by organization to
measure the brand value of the company in the market Brand awareness is generally define as
customer knowledge about the product or services of the company in the market. Measuring
brand awareness generally means understanding the amount of time name of the brand generally
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used to arises in a conversation. For example Apple inc, generally used to come at all the tome in
conversation when there is conversation in regards of mobile phone. Some of methodology
through which brand awareness can be understand is Survey, Web traffic, search volume of the
brand and social media mention review. This technique will ultimately help the company in
understanding how much customer are aware about their product, as customer awareness used to
play a very crucial role in building good brand value (Winzar, Baumann and Chu, 2018). Brand
value can be maintain with the help of this technique by making sure that company is properly
active on different platform to provide all the customer information about the offering of the
company.
Preference Metric: It is another technique which can be used by the organization to
measure the brand value of the company in the market. This measurement technique generally
looks at understanding the amount of the preference which is given by the consumer at the time
of making any sort of purchase decision in an organization. Preference of consumer can be
understand by evaluating different aspect of preference with the help of sales data and survey.
Some of the relevant aspect which need to consider or reviewed are as follows:
 Brand Relevance: This is generally a degree of of customer agreement in regards of the
point that Tesco used to offer the unique of specific value product in the organization.
 Accessibility: This is related to the ability of the company in regards of providing product
to the targeted market of the company (Tajvidi and et.al., 2017).
 Emotional connection: Strength of Tesco in forming good emotional connection with
customers
Competitive metrics: It is another technique or method through which value of brand
can be measure. As Tesco used to operate in highly competitive market, it is very important for
organization to understand whether competitor are able to satisfy their customer need or their
brand is able to provide satisfaction to their customer or not. If they are not able to provide and
you are able to it will definitely means that there is good brand value of company. As customer
are willing to pay a sum of money in the market to have Tesco product in the market (Troiville
Hair and Cliquet, 2019). Competitive metric or technique will help the company in
understanding the area where competitor are not providing the value to the customer. Tesco can
look to fill that gap by their product in the market which will help the company in building good
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brand value and also find it easy to attract the customer towards company product in the market.
Some aspects of competitor metrics are customer acquisition rate, Market Share, Sales lift and
distribution channel of competitor.
Social media and search engines are some other sources which could also be used to
measure awareness of brand in minds and hearts of customers. The easily customers are able to
find Tesco name and products it can be stated that it have good reputation or brand image in
retail industry.
CONCLUSION
It can be concluded from above analysis that Tesco have effective manage its brand
image and market share by brining innovation within organisation. There are different techniques
and tools that are used to measure and monitor brand value of firm so that correct actions can be
taken for growth of enterprise. It can also be understood that several components of successful
brand strategy contributed in building and managing equity. Two different methods that are used
to manage brand in partnership and collaborative are Brand leverage and extension. At last it can
be concluded from above analysis that company have strong presence in domestic market but
limited in global so it needs to find key strategies that could helps in expansion of firm.
Therefore, it can be stated that branding is most essential tool of marketing that contribute in
retaining customer’s loyalty and enhancement of overall profitability and market share of
organisation.
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