China's Luxury Brand Management

This assignment delves into the intricate landscape of luxury brand management in China, with a specific focus on the Zhejiang private sector. It draws from key academic sources such as 'Rethinking Place Branding' by Kavaratzis et al., 'Luxury Fashion Brand Consumers in China' by Li and Kambele, and 'Destination Brands' by Morgan et al. to provide a comprehensive understanding of the subject matter. The assignment aims to explore the perceived value, fashion lifestyle, willingness to pay, brand love, WOM outcomes, and service firm competitiveness within this context.

Brand Management

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
P1 Significance of branding as a marketing tool........................................................................2
P2 Major components of a successful brand strategy.................................................................4
TASK 2............................................................................................................................................6
P3 Various strategies of portfolio management..........................................................................6
TASK 3............................................................................................................................................9
P4 Management of brand in collaboratively and in partnership.................................................9
TASK 4..........................................................................................................................................10
P5 Different types of techniques for measuring and managing brand value............................10
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1
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INTRODUCTION
Brand management can be defined as one of the most important process which is required
to be conducted ins the companies. It helps in analysing the position and performance of
companies in the marketplace. The main element that is considered here is about creating and
maintaining good relationships with the customers so that they can get connected with the
brands. A brand is considered as a combination of factors which are both tangible and intangible
(Ashworth and Kavaratzis, 2010). The factors that are included in tangible element are the look,
packaging and price of the product and those included in intangible elements is the experience
gained by the customers. If a brand is having good reputation and likings of the customers, then
it will be able to gain huge market share as well which will help them in increasing the profits of
the firm. The company that has been referred here is Audi and Ford. These are very famous
automotive companies that are having good market position as well. This report will discuss
about building a brand and then managing it in the market, construction and managing brand
hierarchies, leverage and extension of brands domestically and at international level. Along with
this, several tools and techniques that can be used to manage the brand value will also be
considered.
TASK 1
P1 Significance of branding as a marketing tool
A brand can be defined as a sign or a symbol of a company that helps the companies
differentiating themselves from other products available in market. It also helps in creating an
image of company in market as well in minds of the customers. It is very essential for the
company to manage the brand in a proper manner so that their business operations are carried out
in an effective manner.
Every company is having an aim to increase their brand value in the market as it helps
them in gaining more and more customers and maintaining them for a long time as well. But not
every company is successful in this endeavour (Brodie and et. al., 2013). After doing lots of
struggle and facing so many failures in market, companies are able to make their brand
successful in market. The companies that are referred here i.e. Audi and Ford is giving
competition to another firms in the market because they both are producing high quality products
that are loved by customers. Audi is an automotive company that is famous for its stylish and
highly engineered vehicles. Since they are being designed with high quality products so their

prices is also high as compared to other brands. On the other hand, Ford is a company which is
also making good quality vehicles that are long lasting as well. They are making their products
for not only high society but for the middle class people as well which Audi is not supplying.
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Branding can also be termed as an important marketing tool that helps the company in
increasing their target market and sales as well (Buil, De Chernatony and Martínez, 2013). It is
believed that strong brands are very important for the companies as it helps them in increasing
their sales and increasing their customer’s base as well. So, importance of branding as a
marketing tool for Ford and Audi are as follows:-
 Improve Recognition – If a brand is effective and is having good performance and
quality, then they will be able to make a good image in the market and thus, it will help in
increasing their sales. Audi is easily recognised in the market through its symbol which is
four circles and similarly, Ford is also having their own symbol which is recognised by
people easily.
 Brands helps in creating trust – If a customer likes a brand then it will connect them
with the brand and a kind of trust is also built. For gaining this trust, companies should
also produce goods which satisfy the customer's demands and needs.
 Brands support in advertising – In order to create a brand, it is very necessary to
manage them and for this, advertising is very useful. But once the brand is established in
market, then they there is no need for company to advertise each of its products in the
market. This is the case with Audi and Ford as they do not need to advertise their product
in the market.
 Helps in creating financial value – It is considered as a very important factor that is
associated with creating a brand. Since brands creates trust so this trust only help the
company in getting financial help from the market in case of any kind of need. Both Audi
and Ford is having good brand image in the market so it will help them in creating
financial value for the company in market (Christiaans, 2012).
All these factors are important but apart from this, it has been observed that there is a
difference between products and brands of the company. The difference between products and
brands is classified as:-
PRODUCTS BRANDS
 products are basically manufactured by
companies which are bought by
customers later on from the market.
 It is created by customer's perceptions
and expectations. This is like an
umbrella having so many products
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under them.
 They are not having uniqueness in their
nature and can be easily copied by
other competitors.
 It is having uniqueness in their nature
and it cannot be copied or replaced
from any other company.
 It is having a nature to become obsolete
with respect to time.
 Once a brand is created, then it does not
loose its charm and remains the same
forever.
It is considered as very crucial for every companies to develop their brands within the
time because it will help them in setting in the market more easily (Dempsey and Gruver, 2012).
In case of Audi, management of company is required to know that which companies are there
who can give tough competition to them in market like Ford, Hyundai etc. This will help them in
designing their strategies in a more effective manner. These steps are considered as very
essential and are required to be used by every company. These are the steps that help in building
and managing the brand in the market.
P2 Major components of a successful brand strategy
It is important for every organisation to design suitable and effective strategy for the
company for managing the work operations and correcting it in an appropriate manner. These
strategies are designed by the top level managers with the help of marketing department because
they understand the market in a better manner. These strategies are created for long term purpose
so that it bring growth and development in the company. So, the mangers are required to ensure
that all the plans are being applied in an appropriate manner so that it provides benefit to the
organisation and simultaneously satisfies the needs of customers as well.
In order to execute a successful strategies of brand management, few components are
required to be addressed (Esch and et. al., 2014). These factors will help them in making the
customers loyal towards the company as it will help them in achieving long term objectives of
the company. These components are described as under:
 TARGET AUDIENCE – These are the people for whom company is designing their
goods and services. The target audience is selected by company by doing lots if research
so as to launch the product in the correct market (Gratwohl and et. al., 2011). It is an
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important element in the Brand strategies and is required to be chosen wisely. The target
market of Audi and Ford is different because the market set for Audi is of luxury group
but Ford is supplying their products for all sorts of group of people.
 BRAND POSITIONING – It defines the position that the company is having in the
market. It is the factor that is required to be present in every strategy which the
management is preparing for the brand.
 BRAND VIOCE - If a brand is having their own voice then they will be able to reach to
all the customers. It will increase their market share as well as increase their profits as
well as productivity of the company as well. For this the management must be able to
apply their branding strategies in an effective manner.
 BRAND PROMISE – It is a commitment which the companies do with their target
customers that they will supply the products as per their choice and demand only. The
promise done by Audi and Ford is that they will provide goods and services of a very
good quality and will handle all the issues related to it as well.
So, if Audi and Ford wants that their management startegy should be effective then they
will have to consider all these factors in an appropriate manner so that effective results can be
achieved. Also, here the management has to make sure that they are evaluating every aspect of
brand equity so that they are able to fulfil the needs of the customers in an effective manner.
Brand Equity can be defined as value of the brand which is judged by the company
through evaluating the views of customers who have bought the products and services of the
company from the market. It is very important for each and every company to create their own
brand equity and also makes sure that they are of good quality and recognisable as well (Hanna
and Rowley, 2011). So, Audi and Ford are required to consider all the key strategies which are
necessary for building and managing brand equity. For creating a good brand equity, it is very
important for the companies to create a brand promise as well. The key components of creating a
successful Brand are as follows:-
 BRAND AWARENESS – This is the first step that is required to be considered in order
to make the brand successful. It is very important to create awareness about the brand so
that it is known to each and every person (Hollebeek, 2011). The awareness should be
spread in such a manner that people is able to recall about the brand even from a image or
a symbol. Audi is a brand that is having very high brand equity in the market and people
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are able to recognise the brand just by seeing its symbol which is 4 circles attached
together. Ford is not having any such logo of themselves but still people recognise its cars
by its name.
 PERCEIVED QUALITY – This factors is connected with the quality of goods and
services that is provided by the company to its customers or target audience. Therefore, if
the companies wants that customers should visit them again then they should be provide
good quality products to them along with appropriate services as well. This will satisfy
the customers and a trust will also be developed in the customers towards the company.
 BRAND EXPERIENCE – It shows the experience that is gained by the customers after
using the products and services of the company. It is very important for the management
of Audi and Ford to know the reaction of customers after using theur cars as it will help
them in knowing their reviews and if they are facing any kind of issues then it will b
known as well.
 BRAND PREFERENCE – It is very important for the company to deliver good quality
products to the customers so that the customers prefer them again. In case of Audi, once a
person has bought Audi then that person will become a loyal customer of the company
because the services provided by the company is as good as its quality of products.
 BRAND LOYALTY – If any brand is having loyal customers then no none can stop the
brand to become successful in market (Hwang and Kandampully, 2012). For gaining
loyalty of customers person has to work very hard and do proper research so that goods
and services can be made accordingly. Brand loyalty will help them in gaining more
customer base and increasing sales as well.
TASK 2
P3 Various strategies of portfolio management
Strategies are considered as a very important part of business that is required to be
implemented by the managers so as to conduct all the operations in an effective manner (Jiang
and Iles, 2011). Whether a company is an MNC or a national company, strategy formulation and
implementation is necessary for everyone as this will help them in maximising their productivity
and performance.
PORTFOLIO MANAGEMENT – It is considered as a roadmap in which all the activities that
are to be performed inside the management is included so that it can be managed in am proper
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manner and helps in meeting all the financial as well as non-financial objectives of the company
(Kavaratzis, Warnaby and Ashworth, 2014). So for managing the portfolio, some strategies are
required to be prepared so that all the activities can be performed in a better manner and
company is able to get the best possible outcome from it. Normally, there are two types of
Portfolio management strategies which can be used by the companies for managing their
operations in a better manner. They are:-
 Active Portfolio management strategy:- This strategy is applied in those types of
companies that are having potential to take any risk so as to improve the work operations
of the company. Managers of the companies are given the responsibility to choose the
management strategy. But one condition that is require to be fulfilled by his strategy is
that only those companies who are having good market share can use this strategy. Thus
portfolio management strategy helps in understanding the market in a better manner so
that effective returns can be estimated. It will be helpful in maximising returns and
increasing the brand value as well.
 Passive Portfolio management Strategy :- Companies who likes ton maintain a low
profile and does not like to take huge risks use this kind of strategy. In this strategy, the
main focus is on increasing the return of the company. Here basically financial factors
are considered like mutual fund investment of the company etc. so, if any company is
having less market demand then they can make use of this passive portfolio management
strategy.
As per the scenario, Audi can make use of Active portfolio management strategy as they are
having very high market demand and they are having enough resources for taking the risk as well
(Li and Kambele, 2012).
It is very essential for the management of Audi and Ford to understand their hierarchy in
a better manner so that they can do differentiation between the products and services. A
management hierarchy can be defined as a structure which helps in describing the products in a
better manner. This will help them in managing each and every brand in a proper manner. So,
differentiation between Audi and Ford is done below:-
BASIS UMBRELLA BRAND PRODUCTS
AUDI It means selling so many
products under one brand
Products can be defined as the
objects that are produced by
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name. For ex. Audi is having
a big brand name and they are
having so many series of their
cars that are being sold in this
brand name.
the companies so as to to
satisfy the needs and demands
of customers in market. There
are various products of Audi
that are available in market
like Audi Q1,Q2, and the
latest one is Audi Q8.
FORD The umbrella brands are
considered as part of such
companies who are having
large market share as well as
good market value. Ford is
also an umbrella brand of a
company.
It is the core requirement of a
every big company to have so
many products as then only
they will be able to gather
attention of customers again
and again. Some of the
products of Ford are Ford
Endeavour, figo, fiesta,
ecosport etc.
All these products are produced by company for there customers only which help the
company by buying these products in the market. It is also mentioned that if the company wants
to create value of their brand then they will have to develop brand equity of products and
services (Morgan, Pritchard and Pride, 2011). For this, managers can use Keller Brand Equity
model which is also known as CBBE Model.
CBBE model (Consumer based brand equity)
This model will help them in managing the brand equity of the company in an
appropriate manner. According to keller, brand is something that is associated with the feelings
and perceptions of the people who are using the brand. It helps the company in shaping the
products in a better manner so that it satisfies the customers. While applying the CBBE model,
following factors is required to be considered : Brand identity: It includes identifying those features of a brand that is making them
different from its competitors.
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 Brand meaning: It explains clear significance of brand and it is very effective in
reducing the confusion form customer's mind and help company in increasing their
customer base in the market.
 Brand response: This consists response of customers towards company's product and
understanding of this enhance profits of company (Santos-Vijande and et. al., 2013).
All these factors are a very important part of the model and makes it more effective. Audi
can apply this strategy in the market and gain competitive advantage in the market as well. It will
also help the company in maintaining their customer base for longer period of time.
TASK 3
P4 Management of brand in collaboratively and in partnership
For making any company successful, it is very necessary for them that customers
recognise their products in the market. So, it is very necessary for them to advertise their
products and services so that customers buy it in the market. It contain such elements that it
satisfies the needs and demands of the customers because then only the customers will choose
them. Both Audi and Ford are having good market value but still they are trying to add more
value to their brand so that they can be preferred by more types of customers rather than just by
high class people.
BRAND EXTENSION :
Those companies who are having more no products ideas do brand extension. It helps
them in gaining trust and loyalty of customers. It is generally preferred by large sized companies
only. Brand extension generally means adding something new to their brand so as to again enter
the market. It is very necessary because it helps in making the brand active and in the minds of
the customers (Som and Blanckaert, 2015).
Both Audi and Ford are large sized organisations that are having loyal customers as well.
Extension approaches for brand management are:
 LINE EXTENSION – It is a factor that focuses n targetting a new customer base with
the help of parent brand. It is an extension that is related with the expansion of market so
as to gain more customer base and increase the profit amount of company as well. This
technique can be used by AUDI so as to reach another set of customers and make a place
over there also.
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 CATEGORY EXTENSION – It is connected with the expansion of categorises of
products and services. It can be used by companies who wants to enter into market once
again and for this they take help of their parent brand (Wallace, Buil and de Chernatony,
2014). Audi can also enter into new market phase so that they can increase their
categories and enter new segments as well.
Ford and AUDI are having great market share but Ford need to maximise their collection
of luxury vehicles so that they can become capable to compete against organisations like AUDI .
On the other hand, AUDI can try to enter into product segment like bikes, scooty's etc.
BRAND REINFORCEMENT – It includes checking the products at regular intervals
during the whole product cycle so as to know the changes that are happening in the taste and
preferences of the customers. This strategy is adopted by the companies to remind the customers
about the brand as well its benefits. So, techniques that can be used by Audi for doing brand
awareness are :-
 They should increase the advertisement of the brand so that it again comes into highlight
and people forgot about the brand can recall it again.
 They should consistently products goods that are of high quality so that it does not loose
its loyal customer base and gain more and more profits.
TASK 4
P5 Different types of techniques for measuring and managing brand value
Every company who is working in the business environment has to face lots of issues and
challenges so that they can maintain their position in the market. For this they will have to take
care of its customer's needs and demands so that their interest in the company does not get
reduced. It is an issue that is faced by every type of companies. It does not matter that it is small
company or a big company. In case of Audi and Ford, these companies are well established but
with the addition of new companies in the market they may face some issues as well (Zaglia,
2013). Therefore, it is very necessary for all the companies to measure their brand value so that
they can come to know that what is there current position in the market.
It is estimated that needs for measuring brand value arise when:
 The company has to prepare their financial reports,
 They are required to assign purchasing price of the product.
The various brand management techniques that are used by Audi and Ford are :
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Qualitative Techniques – In this approach, the customers who has used the branded products
are being called for taking the reviews so that the company can know the value of their brand in
the market (Ashworth and Kavaratzis, 2010). This process is conducted by marketing department
of the company as they are regularly dealing with the people in the market. The methods that are
used here are like Free Association, Projective Techniques, Experimental Methods etc.
Quantitative Techniques – In this several types of scale questions and numbers are used so as to
make the summary.
Comparative Techniques – The reaction and behaviour of users of brand is learned so that
company can introduce changes so as to make their brand more strong. The techniques involved
here includes; Brand based comparative approach, Marketing based comparative approach.
Audi Ford
Audi is considered as one of the most
luxurious automotive company that is
designing goods and services for class people
only. They are using so many technologies
while designing their cars that is why they are
loved by the customers also.
The techniques that are used by them are:
 Free Awareness – From this,
companies tries to know the companies
that are running into customer's mind
while buying a particular car.
 Brand Awareness – here, the company
tries to set their image in the minds of
customers so that the customers can
identify them anywhere.
Ford is the top most running company in the
market and they are also producing their cars
for all segments of people. They are facing
tough competiti9on from companies like
TATA, Hyundai etc.
Techniques used by them are:-
 Brand based comparative approach – In
this, it will be assessed that how a
consumer will show the reaction
towards the product. Their products in
market is like Ford Mustang, Ford
Aspire.
Brand Equity Audit and Tracking Techniques :
It is considered as legal responsibility of every company to conduct its audit. The
following steps are included in this :-
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 Market Context – here both Audi and Ford check the factors that are having impact on
brand equity. It can be both positive or negative (Brodie and et. al., 2013).
 Brand Equity strength and Weakness – here, the communication is about the market share
of Audi and Ford,their Brand Sensitivity, image attributes and brand loyalty of customers
etc.
 Brand Equity Description – From this, it can be reviewed that how customers can review
the brand and how much they are attached with it.
The various approaches that can be used by them are :
 RESEARCH BASED APPROACH – In this, the main focus is on analysing the
performance of Audi and Ford in market. In this, financial value of company is not much
considered (Buil, De Chernatony and Martínez, 2013).
 FINANCIALLY DRIVEN APPROACH – In this the financial performance of Audi
and Ford is being considered. Here the finance department can consider its historic cost
that are bared by companies so as to bring it in the current state. Also they can make use
of comparative approach in which they will compare the prices of competitors.
CONCLUSION
From the above report, it can be concluded that brand management is a very important
part of the company as it is helps them in gaining more market share and increasing their sales as
well. It is the basic requirement of every company to develop their brand so that they can
compete with their competitors in an effective manner. So, for this they will have to create brand
awareness and do positioning of their brand as well so that it can be recognised by the customers
in the market. Also, few methods which assists in measuring brand equity are:- quantitative,
qualitative and comparative methods in addition to full competitors edge in a short time.
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