Brand Management Strategies: A Comprehensive Report

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BRAND MANAGEMENT
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Table of Contents
Introduction................................................................................................................................3
Task 1- Building and managing brand over time.......................................................................4
Task 2: Brand portfolio and hierarchy management..................................................................7
Task 3: Brand extension and leverage.....................................................................................11
Task 4: Measuring and Managing brand value........................................................................14
Conclusion................................................................................................................................17
References................................................................................................................................18
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Introduction
Globalization has led to a reduction in trade barriers. Apart from this, other key drivers of
globalization resulted in the companies having the opportunity to expand into numerous
markets overseas without many struggles. Competition has been increasing rapidly due to
which product or brand differentiation has become necessary. The concept of brand
management has been emerged for fulfilling this purpose by keeping the company different
from the rivalry firms. The whole report is divided into four tasks, where the first task will
focus on the development and management of the brand. The second task will emphasize on
brand portfolio and management of brand hierarchy using an organizational example. The
next task will showcase how the brand extension and leverage can be used for brand
management. It will include strengths, weaknesses and collaborations of the chosen brand.
The last task will help in gaining an understanding of the management and measurement of
brand value.
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Task 1- Building and managing brand over time
Introduction
Brand refers to the words, symbol, sign or the combination of these things marked on the
products for developing a differentiating image in the market. Brand equity implies the
marketing term explaining the value of a particular brand being created by the customer
perception of that brand name. For developing a successful brand name, it is necessary to
follow some steps. These steps are comprised of developing a target market, conducting
market research, formulating value propositions, developing the brand logo with other
elements, and promoting the brand. The marketing department plays a significant role in
enhancing brand equity. It helps in developing promotional materials, managing the brand,
managing social media, conducting market research, and conducting marketing campaigns.
Branding and its significance
Branding states as a marketing tactic using which an organization develops words, sign or
symbol that can be recognized by the customers. Using branding, an organization can create
an image differentiated from the other competitor products and services. Branding is
significant for an organization to deal with the challenges that occurred due to the intense
competition in the business world. Mainly, branding helps in increasing business, enhancing
brand awareness and changing customer perception (Malmelin, and Moisander, 2014).
Branding helps in generating new customers due to a positive impression within the business
market. Branding acts as a supporter for the advertising campaigns of an organization. Using
branding, an organization can place its image within the customer minds and enhance
organizational recognition (Kladou et al., 2017). New customer generation results in the
enhancement of the business in a particular market. It is significant for the internal
organization as well since it provides satisfaction and pride to the employees.
Branding has been utilized in business practice, mainly as a marketing tool. With the
increased competition, the organizations realized differentiating their products and services
from that of competitor firms. Earlier, the brands were used for selling products in bulk
quantity. Time has changed, and now it is used for the marketing purpose of the products and
services or organization. With the emergence of advertising media and social media, the
brands have been integrated firmly in business practice by organizations (Shen and Bissell,
2013). Technological advancements are also responsible for boosting the trends of branding.
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Globalization has led to the enhancement in the competitiveness of the business market due
to which they need for the organizations have realized branding.
Developing a successful strategy is a task of strategic marketing since it requires considering
different elements together. Looking at the case of Dunkin Donuts, the company failed to
reach the success heights due to high sugary products. The people of the UK have become
highly health-conscious, and this led to the failure of Dunkin Donuts in the UK (Alon et al.,
2015). However, after some time, the company recovered its brand image using a strategic
brand management practice. Considering this case, the successful strategy for strengthening
brand equity has been identified. The critical components of the successful strategy for brand
equity have been identified.
Target audience refers to the individuals who are likely to purchase particular products and
services. Brand positioning involves the position being held by a specific organization in the
market. Brand promise states the message given by the brand to the target audience. It
indicates what customers should expect from a particular product or service (Buil et al.,
2013). Brand values indicate the guidelines that led to the decision-making in the
organization. These are the core values that an organization integrates within the culture.
Brand perception deals with the perception being hold by customers in the past.
Different brand equity models are using which the organizations may reinvent their brand
equity or strengthen it. Application of the Aaker Brand equity model to Marks & Spencer
results in the brand equity management strategy of the company. This model was developed
by David Aaker, who viewed brand equity as the merger of different brand components such
as brand awareness, brand loyalty, brand associations, perceived quality and other proprietary
assets.
Brand awareness: M&S can enhance brand awareness by focusing on customer’s
considerations, familiarity, association anchors and substantiality (Kladou and Kehagias,
2014).
Brand loyalty: It will help M&S by considering the factors such as new customer generation,
response time to rivalry threats, trade leverage and decreased marketing expenses.
Brand associations: It involves customer attitude, the ability for information gaining, high
brand extensions, and driving consumer purchasing.
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Perceived quality: Price, quality, brand extensions, brand position, and huge product
availability comprise the perceived quality component of brand equity that should be
considered by M&S.
Other proprietary assets: This component involves mainly the trademarks, patents, trade
secrets and copyrights and others (Michaelidou et al., 2015). M&S should have several
proprietary assets for gaining high competency in the market.
Conclusion
Organizations use branding as a significant marketing strategy. Branding impacts the
shopping behaviour of customers by connecting them emotionally with the organization.
Using effective branding, an organization can survive in the business market temporarily. It
helps in establishing trust among the customers regarding the organization and sustaining
tough times. It not only helps in maintaining the existing customer base but also attracts new
customers. With new customer generation, it assists in growing the business through revenue
and market share expansion. Strong branding contributes to attaining competitive advantage
and protects the organization from new competitor firms. Branding directly connects with the
customers emotionally. Using branding, the organization can set high prices for the products
and services and enhance profitability. It is said that the more well-known the brand is, the
more the people will desire to work with. It means that branding, when done effectively, can
increase employee productivity.
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Task 2: Brand portfolio and hierarchy management
The brand portfolio of Adidas
Adidas is a Germany-based multinational company engaged in the production and selling of
sportswear accessories, clothes and shoes. It has successfully maintained its brand portfolio
across the globe. The brand portfolio of Adidas comprises of Adidas basketball, Adidas
football, Adidas training, Adidas running, Adidas SLVR, Y-3 and Adidas originals (Mahdi et
al., 2015). It would not be wrong to consider that maintenance of the company’s brand
portfolio has attained in grabbing the place among the top two most well-known producers of
sportswear.
Brand Portfolio Strategy of Adidas
The company has become one of the most active sportswear players in the global business
environment. The brand portfolio strategy of Adidas comprises of the following components:
(Figure 1: Components of Adidas brand portfolio strategy)
(Source: By Author, 2019)
The company follows a process of brand portfolio strategy. The process initiates with setting
the role for every brand being developed in the portfolio. Every brand is defined with a role
for the overall business performance. After setting up the roles, the brands are categorized
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into strategic brands, endorsed brands, sub-brands and others. The most profitable and
strategic brands are given more priority in terms of investment, and it undertakes balanced
investment among all the brands, whether struggling or successful (Wallina and Spry, 2016).
Awareness of customer perspectives is significant for the brand portfolio. The market
research involves the investigation into customer perceptions regarding the brands. This
strategy helps Adidas in developing brand architecture models for managing the brand
portfolio. Adidas possesses the endorsed brand architecture that results in the unified brand
portfolio.
Brand extension strategy of Adidas
The company has adopted a brand extension strategy for enhancing the brand portfolio and
managing brand equity. The brand extension strategy of Adidas is evident from the Adidas
shower gel and Adidas perfumes and deodorants. The company has done the brand extension
by integrating the common values such as originality, performance and passion. It has
resulted in the unified brand portfolio management by Adidas. Under the brand extension, the
company uses a product extension strategy (Ulrich, 2013). This strategy implies the creation
of different products unrelated to each other. In other words, it involves launching a new
product or service that is different from the existing products and services. In the case of
Adidas, the company initiated with the sportswear shoes and then extended to the completely
new range of products that are clothing.
It further extended to the sportswear accessories such as gloves, eyewear, bags and socks and
others. A few years ago, the company launched a new range of products including lotions,
deodorants, shower gels, aftershave and perfumes. The continuous launching of new product
range indicates that Adidas has been adopting product extension strategy that has helped in
gaining a robust worldwide presence (Ahn et al., 2018). Using a product extension strategy,
the company has attained a strong position in other product lines also. One of the most
significant benefits of different product lines states as high chances of profitability even when
some product lines fail to generate profits.
Hierarchy management of a brand portfolio of Adidas
Brand hierarchy refers to the brand structuring of the company's portfolio in a way that can
showcase their inter-relationship with each other. Brand hierarchy of Adidas shows the
branding strategy of the company involving the exhibition of different brand elements within
the products and services. Following is the brand hierarchy of Adidas:
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(Figure 2: Brand hierarchy of Adidas)
(Source: By Author, 2019)
Adidas has the corporate brand named Adidas Group under which there are four family
brands. These family brands are comprised of Adidas, Reebok, TaylorMade, and Rockport.
Under Adidas, there are three individual brands named Adidas Originals, Stella McCartney,
and Adidas Neo. Originals consider more classic brand including clothing, accessories and
shoes. Shoes and clothes of bright colours and advanced designs are offered under Adidas
Neo. The modifiers for Adidas Originals are Stan Smith and Superstar (Wildfeuer, 2018).
Cloudfoam and Raleigh are the modifiers of Adidas Neo, and Stella McCartney has modifiers
named Stella sport and Tennis. Stella McCartney offers fashion clothing, accessories and
shoe lines exclusively for women only. The brand hierarchy of Adidas has been formulated
based on different elements of the brand consist of all the products of the company.
Brand equity management by Adidas
The necessity for effectively managing brand equity has been increased with the enhancing
competitiveness in the business world. Brand equity management has become a priority for
Adidas due to which the company maintains its top position in the sportswear industry on a
global scale. The company does not follow the trends of competitors but develops its fashion
trends and enhances competition. Adidas follows the proactive management strategy of brand
equity by integrating the key elements of consistency and quality (Schivinski and Dabrowski,
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2015). The proactive management strategy defines as developing new platforms of
positioning to integrate brand equity with the strategy and refresh positioning and brand
identity. Under this strategy, the marketing campaigns are targeted at strengthening brand
equity.
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Task 3: Brand extension and leverage
Adidas considers as one of the most influential sportswear brands of the global business
environment. Adidas is a well-known brand for sportswear shoes, accessories and clothing. It
has substantial brand leverage that involves the strategy for utilizing the strengths of the
current brand name to make a successful entry into new product categories. Looking at
Adidas's current position, it has become highly challenging for other companies to grab a
high market share in the sportswear industry (Hsu et al., 2016). Brand leverage helps in brand
extension using which Adidas entered into clothing, accessories and toiletries after launching
in the shoe industry.
Strengths of the Adidas brand:
 The company owns an excellent distribution network that is well-developed. It
exports millions of products to distributors all over the world within a reasonable
time. Apart from this, the company ships products to the bricks and mortar stores
within the global business market.
 Adidas is indeed the dominant brand that sells premium sportswear products having
brand recognition in every corner of the globe. It possesses a positive and strong
brand image in every country where it operates. It is because it produces fashionable
and premium quality products (Aubert et al., 2016).
 Adidas has a widespread presence over the globe since it has more than 2400 stores
that strengthen the financial position of the company. It generates millions of dollars
every year.
 The marketing plans of the company have helped in gaining a large customer base as
well as enhancing brand awareness (Giese, 2016). The critical marketing tactics of
Adidas involve sponsoring the major sports events such as Olympics, FIFA and NBA;
and celebrity endorsements.
 Adidas owns a diversified product portfolio including clothing, shoes and accessories
under the brand names Adidas and Reebok. Diversification assisted the company in
gaining a positive brand image.
Weaknesses of Adidas brand
 Adidas undertakes more than 90% of the production from outsourcing to majorly Asia
due to easy resource availability and reduced labour costs. It has adversely impacted
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the company by developing a risk of over-dependency on Asia for production
outsourcing.
 Although Adidas integrates celebrity endorsements in the marketing plans, it has been
seen that it invests little on celebrity endorsements (Ranjan, 2016). Other competitors
leverage mostly on celebrity endorsements that develop challenges for Adidas.
 The product portfolio of Adidas is narrow, that has become a weakness for the
company in the intense competition of the business market. It has diversification in
prices and global markets, but there is an absence of diversification of product line.
 The company offers products with premium quality but at high prices. High prices are
set due to production methods and the adoption of innovative technology. It makes the
company successful among numerous customers in developed countries but limits the
customer base in developing countries (Bhasin, 2019).
Collaboration in brand management in Adidas
Collaboration has become a vital element for strong brands. Collaboration with celebrities or
organizations is used for leveraging brand management by the brands, including Adidas.
Collaboration is not a new concept, but companies traditionally use it for strengthening brand
equity and effective brand management. Following are the collaborations or partnerships are
undertaken by Adidas in recent years:
Adidas and Beyonce
Recently, Adidas announced a partnership with a renowned celebrity singer Beyonce for
commitment towards the creativity and the power for life-changing. This partnership aims at
using sports for driving changes in the world, along with the recognition of new opportunities
in the global business world. This collaboration has integrated certain core principles of both
the partners such as the significance of women in empowerment, leadership, collaboration
and shared ownership (Shenje, 2017).
Music collaborations
Adidas Originals has recently collaborated with Donald Glover who is a musician and an
actor. Under this collaboration, three Adidas styles have been launched named the Lacombe,
the Nizza and the Continental 80. These styles shared a common characteristic of white
canvas shoes developed tone-on-tone. Apart from this, the company launched short films in
association with Donald and comedian actress Mo’Nique.
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