Analysis of Brand Equity and Portfolio Management Strategies

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Brand Management
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Executive summary
Brand is the approach of using logo, symbol, designs and attractive name by the company to
establish its unique image in the market. On the other hand branding is the process of establish
that brand name over a period of time using various strategies like creating awareness among the
customers, maintaining good relationship with the customers etc. This report has used Keller’s
Brand Equity management model to establish brand equity in the market. A case study of Marks
& Spencer has been taken into account to conduct an effective study of strengths and weaknesses
of the company and suggest ways to improve its performance in the market.
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Table of Contents
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................5
Task 2...............................................................................................................................................8
Task 3.............................................................................................................................................11
Task 4.............................................................................................................................................14
Conclusion.....................................................................................................................................16
Reference list.................................................................................................................................17
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Introduction
Branding is the process of creating value for a brand over a period of time. Different
organisations use their own unique method for branding its products. There are mainly three
techniques for brand portfolio management namely House of Brand, Branding houses and
Hybrid branding. The report also highlights the importance of Customer Based Brand
Management model. It throws light on the significance of brand leveraging and the strength and
weaknesses of Marks & Spencer brand. The report includes various strategies for measuring and
managing brand value, brand awareness, customer’s attitude and purchasing intention of
customers.
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Task 1
a) Explain the importance of branding for an organisation
Branding is the process of creation of value for the company by using a name, symbol or a logo.
Branding helps customers to identify the products of the company and distinguish it from the
competitor’s products. It plays a crucial role in the success of the organisation:-
Recognition- Branding creates reputation of the company in the market, logo or name of the
company represents it the market.
Adds to business value - Branding helps, the company to enter into new market and facilitates
modification and diversification of products by giving it advantage in the market. A well-
established brand can easily expand its market as it gets the backing of loyal customer base
(Baumeister et al., 2015).
Creates trust- A well-planned branding strategy would help the company create trust among the
customers and potential clients. A well-known brand influences the choices of people, people
assumes it industry expert.
Increases productivity- An appropriate branding strategy would help the company attract more
customers, thereby increasing the demand of its products and services, thus adding to its
productivity.
Decreases the turnover of employees- Employees working for a valued brand has more job
satisfaction and takes pride in their work, they have a better sense of purpose and thus are
motivated (John and Park, 2016). Therefore, good branding decreases the rate of turnover in an
organisation.
b) How does organisation grow and develop brand equity
Brand equity may be defined as the commercial value that can be derived from a brand name. An
organisation can develop its brand equity by adopting the Keller’s brand equity model:-
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Figure 1: Keller’s Brand Equity Model
(Source: Mindtools.com, 2019)
Identity- The initial stage of building brand equity is to communicate the brand and the products
and services offered by the same to the customers. The company must attempt to assure that the
customers are well informed about its strategies and offerings. The company can create
awareness among the customers by engaging in active promotion activities (Keller, 2016).
Meaning- The next attempt in building value for brand is by creating meaning for the brand. An
organisation can do by adding social value to its brand or any other value that would differentiate
it from its competitors.
Response- After a company is successful in attracting customers for its brand; it must to strive to
ensure their retention by taking proper feedback from their customers and addressing their
problems and grievances. It must strive to deliver satisfaction to their customers by giving them
post sales services and other necessary assistances.
Relationship- In order to maintain the brand value created by the company, it must aim at
maintaining good relationship with its customers by understanding their needs and demands from
the company and trying to address the same (Nyadzay et al., 2016). The company must aim at
creating loyalty among the customer by giving them a sense of community by giving those
opportunities to engage actively in the operation of the brand, through online chats, market
rallies events etc.
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c) Provide suggestion of how the M&S brand can extended, reinforced and revitalised
Brand may be defined as the name, logo or sing associated with a company that makes its
distinguishable in the market. M&S needs to put emphasis on its customer satisfaction capacity
to undertake its plan of Brand reinforcement and revitalisation plans.
Marks & Spencer has faced a major downfall in the market in both its apparel and food and
beverage sector. However, it can strive to improve its position by adoption of proper brand
management strategy. It can adopt various strategies such as-
Sales strategies- Marks & Spencer must strive to improve its sales, by incorporating new
strategies such as offering discounts on its product. M&S has never offered its products on
discount even during recession, as it believed that its customers will value its strategy of quality
over money, however it has not proved effective for the company. Thus, it should attempt to
provide its products on sales; it would be a historical change for the company and would help the
company attract huge number of customers.
Improving the product and pricing strategy- M&S must aim at improving the price of its
product, it must devise strategy to lower its price so that low-end consumers can also afford its
products. At the same time, it must strive to improve the quality of its product so that it can
appeal to the taste of high-end consumers as well. M&S has been serving only the middle class
section of the society but the company must strive to position itself in such a way that it could
meet the needs of all the class of consumers.
Promotion strategy- M&S must focus on active promotion of its products, it must aim at
keeping its customers fully aware of its new strategies, techniques and products and services. It
will help the company attract more customers, retain the existing ones, and help it get over the
crisis.
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Task 2
Analyse different strategies of portfolio management, brand hierarchy and brand equity
management
Brand equity management is the process of maintaining and managing the brand value earned by
the company in the market. Different companies uses different technologies for managing its
brand portfolios, few of the techniques are as follows:-
a) House of brand- Majority of the brands serving consumer products uses this technique of
managing its portfolio. Under this approach of brand equity management, the product itself
serves as a brand rather than the parent company. Hierarchy within the business units adopting
this technique is more complex (Spry and Lukas, 2016) .Unilever is one major company that
uses this technique for managing its portfolio. Unilever serves a huge range of brand. It product
ranges from the beauty and personal care to home care and water purifiers. It offers various
brands like Clear, Cornetto, dove etc, all this sub brands are known as the primary brands.
Another major company using this technique is Proctor and Gamble. The company offers various
products ranging from beauty to necessities. It has various sub brands such as Pampers, Pantene
etc. All this sub-brands has their own-targeted customers and enjoys a major share of market as
an independent primary brand.
Figure 2: House of brand of P&G
(Source: Design By Day, 2019)
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b) Branded house- Under this technique of managing brand portfolio the main or the parent
company acts, as the dominant company in the market and all its products and sub-brands are
known by its parents company’s name (Hsu et al., 2016). Google uses this technique to manage
its portfolio; Google has launched various products such as Google drive, calendar and pay. The
extensions of brand are well known by its own name and acts as primary brand. However, the
name Google is attached to all its products. Another major company using this technique of
brand equity management is FedEx, the company offers various other services and has various
sub-brands like FedEx Express, FedEx Freights etc. All the sub brands have the extension of the
main brand FedEx clearly attached to its name and the parent company FedEx enjoy reputation
in the market.
Figure 3: Branded House of Google
(Source: Brown, 2019)
c) Hybrid brand - This technique is often adopted by companies heavily invested in merger and
acquisition. This is adopted by the company to avoid confusion in the future regarding the old
products of the main company and new products of the holding company. This method of
managing is adopted when two or more brand portfolios needs to be managed under the same
brand architecture. Microsoft uses this technique for managing its portfolios. It has various main
brands like Microsoft Internet Explorer, Microsoft Health etc. All this uses extension of
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Microsoft before its name. The company also endorses various brands like Xbox and Bing,
targeting few customers in the market. Microsoft has also acquired brands like Skype and Nokia.
Basis of distinction House of brand Branded house Hybrid
Nature All the sub brands act
as the main brands
and enjoy dominance
over the market.
The main company has
dominance over the
market. All the sub
brands are known by
the parent company’s
name
The company and
the sub-brands both
enjoy dominance
over the market.
Hierarchy Complex Simple Very complex
Examples Unilever and P&G Google and FedEX Microsoft
Figure 4: Differentiation between House of Brand, Branded House and Hybrid Branding
(Source: Created by learner)
For brand equity, management, the company uses CBBE model in its structure. P&G uses strong
promotional strategies to make its products known to its customers; it ensures that its customers
are well aware of its new strategies related to sales and expansion. P&G has built its equity by
attaching a social cause to its operation. For instance, it contributes money for charity for each
purchase of each product. The company uses a strong team for providing satisfactions to its
customers through availing feedbacks from them. P&G has a strong team devoted for conducting
market research, which helps the company understand the needs and preference of the customers
and bring changes to address the same. Similarly, Google makes its products known to its
customers through advertising using existing products. It adds value to its products by catering to
the daily needs of the user. It attempts to bring changes in its structure by availing instant
feedback from its customers through online surveys. The dedicated team of market researcher
helps the company innovate its existing products and introduce revolutionary technological
products in the market for maintaining its brand image.
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Task 3
Explain the meaning of brand leverage
Brand leveraging is the process of using the existing brand name by the company to enter into a
new market related to the existing product category. M&S has used brand leveraging to expand
its operation around the globe and undertake online sales enabling its customer to reach its
products within a click. Brand leveraging assists the company while diversification of its
products or expansion of its market. The term brand leverage implies the strong value attached to
a brand (Brexendorf and Keller, 2017).
Importance of brand leveraging:-
 Brand leveraging helps to provide customers with the sense of familiarity
 It helps the company expand its range of product thereby creating more opportunities for
sale, adding to its profitability.
 It helps to create a well-known name for a brand and thereby makes extension of product
line easier for a company
 It helps the new products and services of the company enjoy the reputation of the already
existing brand.
 It helps the company make efficient utilisation of its already existing brand image for
segmenting new market.
Evaluate the strength and weakness of the M&S brand
Strengths of M&S brand are -
 High recognition in the market- Marks & Spencer is well known brand in the UK. The
company enjoys a strong brand value due to its offering of good quality products at
reasonable rate. Shoppers visiting high street prefer shopping at M&S as it facilitates
them to get all the products under one roof.
 Huge range of products- M&S offers a wide variety of products to its customers. It
takes special care while launching products to the market to ensure customer satisfaction.
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For instance, the company maintains a close relationship with the farmers to ensure wide
variety of food products to the customers.
 Diversity-M&S supports diversity in its operation. It has more than 80 thousand
employees, belonging from different background, caste and religion serving at more than
900 stores. The company promotes equality in its structure ensuring that its employees
understand the culture of its customer’s better thereby facilitating better customer service.
 Multiple presence- The Company operates on a global scale having its presence in more
than 40 countries. The company offers its products to customers through both online and
offline mode.
 Innovations – The Company’s brand image revolves around unique designs and styles.
M&S supports innovation in its structure.
Weaknesses of M&S brand are-
 Scalability of supply chain- One of the major issues faced by M&S in its operation is
the scalability of its inventory. The company fails to manage and modify its inventory
with the change in the market trend. Though the company has been trying to offer its
product through online platform to its customers, it has significantly failed to deliver
products to all its outlets around the globe.
 Satisfaction of customers- M&S fails to provide satisfaction to its customers, as most of
the customers face difficulty while returning the goods purchased from the store, which is
again associated with its poor supply chain. Customers also find their in-store experience
unpleasant due to bad customer service offered by the company.
 Bad publicity- M&S is often considered as the non-trendy brand catering to the basic
fashion needs. This affects the brand image of the company. The company must devise
strategies to improve its image in the market.
Evaluate some options for collaboration and partnership to help grow the M&S brand
local and international.
M&S has decided to collaborate with Oxfam in order to address the problem of inappropriate
supply chain around the world. Both the companies believe that the there is an urgent need to
bring amendments in the global food system, but the issue gives rise to several other issues such
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