Brand Management Strategies: Building and Leveraging Brand Equity

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Brand management
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Table of Contents
Introduction...........................................................................................................................................3
LO1 Demonstrate an understanding of how a brand is built and managed over time............................4
P1 Explain the importance of branding as a marketing tool and why and how it has emerged in
business practice............................................................................................................................4
P2 Analyse the key components of a successful brand strategy for building and managing brand
equity.............................................................................................................................................6
LO2 Analyse how brands are organised in portfolios; how brand hierarchies are built and managed...8
P3 Analyse different strategies of portfolio management, brand hierarchy and brand equity
management...................................................................................................................................8
LO3 Evaluate how brands are leveraged/extended over time domestically and internationally...........11
P4 Evaluate how brands are managed collaboratively and in partnership both at a domestic and
global level..................................................................................................................................11
LO4 Evaluate techniques for measuring and managing brand value over time...................................14
P5 Evaluate different types of techniques for measuring and managing brand value using specific
organisational examples...............................................................................................................14
Conclusion...........................................................................................................................................15
References...........................................................................................................................................16
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Introduction
For the organisation, it is very important that its customers could be aware of the products
and services that the company is offering so that the marketing objectives of the company
could be achieved. For that purpose, the different strategies are used by the company
especially to enhance the knowledge of product and services that the company is offering.
Here, the company take the help of the brand management that includes the strategies about
how the awareness of the products could be raised in the mind of the customers. The current
assignment is based on the concepts of the brand management. There are total four parts of
the assignment. In the first part, the key component of the brand strategy and also how the
brand is managed would be discussed. In the second part of the assignment, brand equity
management and brand hierarchy etc would be discussed. At the third part, how the brand is
managed would be discussed and the fourth part of the assignment discusses about the
techniques that could help the company in measuring the brand value of the organisation.
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LO1 Demonstrate an understanding of how a brand is built and managed
over time
P1 Explain the importance of branding as a marketing tool and why and how it has
emerged in business practice.
A branding could be considered as a term that helps the company in differentiating its
products and services from the competitors and basically this could be represented through an
item or family of all items or a seller. Basically, the term branding is used by the organisation
so that a positive image could be created in the mind of the customers and the customers
could find the products at first place when they want to buy the products to satisfy their needs
(Chowudhury, 2012). Many scholars consider the branding as a tool of the marketing that
helps the managers in creating an image of product in the customers’ mind. Here, the
importance of branding as a marketing tool for the organisation is explained:
 Clearly deliver a message: For the success of the company, it is very important for
the company to deliver the message to the customers so that the customers could be
attracted towards the products and services of the company. Here, banding could be
considered as a marketing tool which could be used by the organisation to deliver the
message from the side of organisation to its customers. With the help of branding, the
right message could be delivered to the right customers as this describes various
branding and promotional activities.
 Emotionally connect target prospects with a product or service: The main motive
of the marketing is to attract he customers so that the sales figures of the company
could be enhanced. Here, the branding strategies like are used by the marketing where
it makes the customers emotionally attached to the products and services that the
company is offering (Congxin, 2014).
 Motivate the buyer to make a purchase: With the help of the branding, the
organisation is able to convert the query of the customers into purchase and this also
motivates the customers to buy the products and services of the company as this helps
the company in strengthening the image of the products offered in the mind of
customers.
 Create user loyalty: Today’s the market is very competitive and here it is very
important for the company to create the loyalty among the customers so that the
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business objectives and goals could be fulfilled. Here, branding could be used a
marketing tool that helps the company to keep the customers stick to the brand that
may includes strategies like maintaining relations or providing discounts or creating
an image.
 Increase the value of business: The branding is used by the companies because of
this only as each and every organisation come to gain the profit in the company and
the market is very volatile and also very competitive. Here, the company needs to
create a value of the organisation into the mind of the customers so that it also could
gain the competitive advantage and also the profit. So here it could be said that
branding as a marketing tool helps the company in creating the value of the business.
Emergence of branding in business practice
The concept of “brand” is no new for the companies, it has been using by company through
many years. At the beginning of the modern consumerism (in early 19 centaury), the global
distribution was seen in the products like wine spirits and ale first. Here the producer started
to create the different designs and mark on the bottle so that the customers could easily
identify the company among the competitors. Over the time, the mark or the design of the
products evolved and represented the quality and the company. Later the factories established
at the time of industrial revolution, and they started the mass production of the products with
some unique packaging against the local products (Chao, 2010). At that, the companies had
to convince the customers about the unique packaging of the products so that they could find
it a perfect competition with the local products. Here, the companies like Pears, Coca-Cola
Quaker etc became the companies whose products become “branded” through putting the
efforts in convincing the customers. Later when the television and radio introduced, the
company get the new medium through which they could target the people who are not
physically present in their surrounding but still the company managed to convince the
customers about the products that it is offering. After that, the advertising agencies and
corporate took the charge to enhance the brand of the company and here they introduced the
various strategies to create an image into the mind of the customers. With the help of these
agencies, he companies has managed to build a brand identity among the competitors such as
luxury brand, fun and entertainment etc. Nowadays, the branding has become the integral part
of the marketing management where the company cannot even imagine the successful launch
of the products and service without branding.
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P2 Analyse the key components of a successful brand strategy for building and
managing brand equity.
The brand equity could be explained as a term where the consumer perception is determined
against the particular brand name of the products and services rather than products itself. The
brand equity of the company decides the worth of brand and also the popularity of the brand
among the customers. The concept of the brand equity came in existence with the choices of
the customers where they choose the products and services of the particular brand for which
they are familiar and already have used some other services of the company. The brand
equity of the company could be measured through:
 Brand awareness,
 Brand recognition and
 Brand loyalty
Here, it could be said that for the success of the organisation, it is very important for the
company to formulate the strategies so that the brand equity in the market could be developed
and the company could gain huge profit (Atarodian, 2013). Here, the brand strategy plays a
very important role where it brings all the customers together and communicates the real
message of the company to the customers so that a positive image could be created in the
mind of the customers. For the purpose of developing the brand equality, the company needs
to develop the brand strategy that must include following components:
 Target audience: While formulating the brand strategy for developing the brand
equity, the company must be sure about whom it wants to sell the products or who are
the customers of the company? Here, the relationship with the customers could be
B2B and B2C. Here, the company needs to formulate different strategies for B2B and
B2C. It would be good for the company to select the audience after examining what
needs and wants of the customers could be fulfilled by the company and what
resources are available to the company to fulfil the demand.
 Brand promise: The main component of the brand strategy for developing the brand
equity is the brand promise that explains the message of the company to the customers
or that tells the customers about what expectation of them have been fulfilled by the
company.
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Figure 1: Component of brand positioning (Aaker, 2016)
 Brand perception: The brand perception also must be included in the brand strategy.
This represents the perception of the customers towards the company. Knowing or
anticipating the perception of the customers is very important for the organisations
which are entering in new business.
 Brand positioning: This refers the position of the brand that it holds in the mind of
the customers and also in market (Eloyan, 2015). For the purpose of developing the
brand equity, it is very important for the organisation to set the brand positioning as
per the target market of the company and make the brand promise accordingly.
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LO2 Analyse how brands are organised in portfolios; how brand
hierarchies are built and managed
P3 Analyse different strategies of portfolio management, brand hierarchy and brand
equity management.
There is no doubt that the branding brings the various benefits to the company. Here, the
companies tries to formulate the strategies that could help the company in using the concept
of branding so that maximum profit gained through developing the image of the organisation
into the mind of the customers. Here some strategies are explained described in the concepts
of branding and could help in strengthening the position of the company into the mind of the
customers.
Portfolio management
Brand portfolio strategies: the brand portfolio is a term where the company produces more
and more products under the brands without considering the effects of these additions on the
overall brands (Paul and Bhakar, 2018). For the brands and big companies it is very
important to include the brand portfolio strategies so that it could be able to make the
decisions on what products needs to be included and how he sub brands could be introduced
in the market. Here some brand portfolio strategies are explained:
- House of brand: this is the strategy which is followed by many companies in the
market. In this strategy, the company introduces the products into the market as an
individual brand and here the company also inform the customers about the parent
brand through putting a logo or address of the company in the packages. In the other
words it could be said all the products that the company has introduced would have
their separate brands and only a logo of the parent company would be carry of their
packages.
- Branded Model: In this brand portfolio strategy, the company use the corporate
brand in all the products and services it offers to the customers. The main benefit of
using this strategy is that its launched products could be easily identified by the
customers due to enhanced brand awareness into the market. Here, the low marketing
and promotional is done by the company in the comparison of other strategies.
Branded house is also known as mono brand portfolio strategy.
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Brand hierarchy:
Brand hierarchy is a graphical portray of firm business strategy where numbers and the nature
of the common brand element is displayed. Here, the company wants to make the customers
realisation that the company could brand a product in the different ways depending on new
and existing brand and also how the company could combine them as a whole product. For
example: Dell Inspiron 17R computer notebook is basically consist three brands Dell,
Inspiron and 17R which offer a single product to customers through combining. The different
level of the hierarchy could be explained through following ways:
 Corporate branding: This is also name as company brand and this is the highest
level of the hierarchy. It is almost present in the packaging or on products.
Sometimes the name of company subsidiary also presents on the packaging and
product (Mwangi, 2014).
 Family branding: the family branding also knows as range brand and umbrella
branding. It is used in many products but not necessary that the name of the brand
would be noticed. For example: ConAgra healthy choice family brand offers the
different range of the foods such as frozen foods, meat, soups, pasta sauce etc.
 Individuals branding: These are restricted to one product only. However it is
possible that the company could create different products under this. The main
advantage of this is that the company could modify the individuals products as per
their needs and requirements.
Brand equity management
For brands, the brand equity plays a very important role and this make the organisation
confronting of what is the status of the company into the market. Here, the market research
helps the company very much in the analysing the brand equity of the company in the market.
With the help of the customers based brand equity model, the company could be able to how
important the customers attitude towards the organisation is. Customers based brand equity
model explained by Keller includes four levels of pyramid. This is explained below:
- First level: Salience: This could be explained through “Who are we?” Here, the
customers point of views towards the brand is examined like when they first hear the
brand and how long they have remembered that.
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Figure 2: Customer based brand equity model (Keller, 2013)
- Second level: Performance and imaginary: Here the brand reputation is examined
through performance and imagination of the customers.
- Third level: Judgemental and feeling: This could be categorised in:
Actual or perceived
Customers decisions on where brand exists.
Measured through customers trust on brand
- Fourth level: Resonance: the relationship and interaction of the brand with the
customers decides that the brand is above all other brands from the view of customers.
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LO3 Evaluate how brands are leveraged/extended over time domestically
and internationally
P4 Evaluate how brands are managed collaboratively and in partnership both at a
domestic and global level.
Brand Management is a difficult task in the tough competitive world that exists today. Hence,
organisations need to develop some brand development strategies that would help them in
standing out in the domestic and international market. Brand extension is one such strategy
which is being adopted by organisations that includes the use of an existing brand in the
extension of the company product line and business segment (Kagai, 2014). In the brand
extension strategy, organisations use the image of a well-established brand name into some
other category. In other words, organisation develops some products which are related to the
existing brand name and then market them under the same brand value. In this manner,
organisation develops an umbrella of the products under a name which is already popular in
the market. The most important benefit of the brand extension strategy is that it helps the
organisation to increase and leverage brand equity.
There are two important approaches to the brand extension – Product Adjustment and
Promotion. The aim of these two approaches is to make sure that the life of the brand is
prolonged before it goes towards the path of decline. In product adjustment approach, the
same version of the existing products are launched in the market while in the Promotion
approach, the extensive marketing campaigns for the existing products are launched under the
existing brand name.
McDonald is an example of the Brand Extension which has helped the company in increasing
its brand value over time. Instead of just focusing on the fast food products, McDonald
lunched Gourmet Coffee Products under the same brand name of McDonald. This move has
helped the McDonald in competing with established brands in the beverage industry such as
Starbucks. In this manner, McDonald has effectively used the “Fit and Leverage” approach
for the purpose of Brand Extension. On the other hand, if an organisation tries to use the
brand extension approach by launching a product under an existing brand name but the
product category is entirely different, the strategy could backfire as it would not attract the
customers towards the new product. For example, if Apple launches Smart Watches under the
Brand Name of “iPhone” it would provide a leverage to the brand as Smart Watches could be
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connected with a Smartphone. However, launching a Smart Car under the brand name of
“iPhone” could be a disastrous move for the brand management of the company.
Brand Management using the partnerships and collaboration is another strategy which is
being used by the organisations to create a market space and generate more business. Brand
collaboration and partnerships are used at domestic as well as at the international level.
However, Brand Partnership and Collaborations seems an interesting option for brand
management, increasing leverage and brand equity, sometimes, it might not be a great move
if partner organisations are not able to come up with effective product combinations. An
example of successful brand partnership and collaboration is the Bundled Services offered by
Spotify and Hulu where the price of the bundled services is $5 cheaper than their separate
prices. In this venture, Spotify and Hulu both agreed to reduce their profits on the sale of the
individual services to make sure that their partnership goes step ahead and generate more
revenue in the future for both companies than their individual sale of the services would have
generated.
Brand Collaboration and partnership has proved to be very effective at the domestic level
where two local organisations have come up with a combined product or service. This
success at the domestic level got organisations thinking about the brand partnership and
collaboration at the international level. One of the main benefits of the brand partnership at
the international level is that it provides a huge Cross-Promotional exposure to the partner
organisations (Hellenius, 2018). Because of this, an organisation could enter a new market
easily as it has a local organisation as its partner who would help the foreign organisation in
connecting with its existing users. Brand Collaboration help the organisations use new
audiences and make an impact with the new bundled product. Another benefit of the brand
partnership at international level is that collaboration allows organisations to create highly
engaging and creative promotional campaigns.
Brand Collaboration at international level allows the companies to bring values to the
customers. In this manner, one partner organisation would fill in the gaps in the shortcomings
of the product or services of another partner. Together, both partners could build something
unique for the customers and create a new brand altogether. Digging the customer data is
essential for the brand partnership at the international level. Both organisations need to have a
better understanding of the existing customers of the partner organisation so that they could
assess the opportunities of their own product and services for the partner customers. An
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