Brand Equity Management Strategies: A L'Oreal Perspective

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Brand management

TABLE OF CONTENTS
Introduction......................................................................................................................................1
Task 1...............................................................................................................................................2
Brand is power.............................................................................................................................2
Task 2 – Brand portfolio and hierarchy management.....................................................................7
Analyze the organization’s brand portfolio strategy...................................................................7
Provide an illustration of the hierarchy management of brands within organizations portfolio. 8
Analyze strategies used for managing the equity of the brands within the organizations
portfolio.......................................................................................................................................9
Task 3 – Brand extension and leverage.........................................................................................11
Strengths of the brand that can be leveraged.............................................................................11
Weaknesses that may need attention providing some possible suggestions..............................12
Collaborative and partnership agreements.................................................................................12
Task 4 – Measuring and managing brand value............................................................................14
Evaluation of various techniques used for measuring and managing branding components....14
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

LIST OF FIGURES
Figure 1: L'Oreal Paris logo.............................................................................................................1
Figure 2: Major steps to build a successful brand...........................................................................3
Figure 3: Aakar's brand equity model..............................................................................................4
Figure 4: Keller's brand equity model.............................................................................................4
Figure 5: House of brand view in L’Oreal.......................................................................................7
Figure 6: L'Oreal branded house......................................................................................................8
Figure 7: Product branding on Garnier Fructis products.................................................................9

Introduction
Uniqueness of the business and product is presented through the branding and it is the major
source of the revenue, sales and customer retention in the business. The report will discuss the
power of branding. Various equity models and strategies for the branding extension and
reinforcing will be discussed. Later, the report will discuss the brand portfolio and hierarchy
management approaches. Brand expansion and leveraging will be discussed with consideration
of the strengths and weaknesses of the brand. The report will also highlight the brand value
measurement and managing techniques. L’Oreal is considered as major example for various
definitions and realistic implementation of the concepts.
Figure 1: L'Oreal Paris logo
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Task 1
Brand is power
Introduction
The business and marketing function has use of the term brand which is still in a big confusion
for small businesses. In marketing practices, brand means to create a name, design or symbol
which can help the business to achieve the unique identification among the other products in the
market. For business context, brand is a product of the organization under a particular name
(Rosenbaum-Elliott et al., 2015). For example, L’Oreal is a brand because of the unique values
among the customers. Therefore, the brand equity is a term which is used to present the
commercial or financial values of the brand associated with the customer perception and there is
no involvement of the products and service itself (Aaker and Biel, 2013). It can be said that the
customer awareness and perception for price, quality and availability defines the brand equity.
Branding has benefits for the business and consumers. Branding can increase the awareness for
the products and services and so that it directly impacts the sales, customer engagement and
customer-based marketing. Also, customer loyalty is improved because a good branding attracts
for the purchase whereas quality products retain them for future purchases with business.
Through branding, the organizations can move toward product differentiation and can introduce
the new products and services effectively to the customers (Kapferer, 2012). A strong image of
quality can be created and so that investors as well as talented candidates can be attracted in the
business. The consumers can know the products and services within effective time and get
strengths in purchase decisions.
Main discussion
The goal to build the successful brand is mare a dream without the systematic planning.
Therefore, branding starts with the determination of the target audience of the business. It
becomes essential to determine target market with their potential needs. Later, the business has to
define the vision and mission to guide the capabilities (Rosenbaum-Elliott et al., 2015). Research
for the competition in the market with effective understanding on the trends and challenges helps
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to differentiate the products and services and to convince the customers. Value prepositions are
also required in the form of unique, valuable and beneficial products. Brand guidance is also
required to start marketing of the brand.
Figure 2: Major steps to build a successful brand
Brand equity is required to strengthen to achieve the stable operations and higher profitability.
For example, Apple is a giant technology leader for smart devices such as laptop, mobile and
tablets. Aakar’s equity model states that brand identification has mainly four elements. A brand
might be product, organization, people or a symbol. Brand equity also has five components those
are significantly used in Apple to achieve the competitive growth (Chattopadhyay et al., 2008).
Apple has significant brand awareness because of strengths in the marketing to the potential
customers whereas the quality and branding is high enough to conquer the loyalty of customers.
Quality of individual product is unmatched from the contemporary market products. Besides to
it, brand associations and other proprietary such as relations with trade partners and intellectual
property rights.
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Figure 3: Aakar's brand equity model
Keller’s equity model is also significantly used in brand equity management. The organization
such as L’Oreal uses the model reach resonance in the business. Brand identity stage helps the
organization to segment the market and to understand their requirements. Branding meaning
stage helps L’Oreal to identify the potential goals and objectives with the branding practices.
Also, brand response on quality, superiority, considerations and creditability helps to achieve the
effective outcomes (Keller, 2001). The organization also can consider the implementation of
brand resonance to achieve the active participation of the customers, behavioral loyalty, sense of
community and attitudinal attachment of customers with customers can help to improve the
brand equity.
Figure 4: Keller's brand equity model
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Therefore, L’Oreal can use the brand development strategies to achieve the competitive
advantages. Brand extension is one of the brand development strategy in which the organization
uses the established reputation with a same brand to introduce new products. L’Oreal can
measure the brand equity so that changes in the successful launch can be identified on time
whereas it is also significant to understand the potential risks and impacts. Also, core
competencies can be leveraged to achieve brand extension (Chailan, 2008). The organization is
also recommended to connect effectively with existing customers and to invest in market
research so that the brand extension can be made successful.
The organization also needs to ensure that the brand is live among the customers. Brand
reinforcement can be achieved through brand awareness and brand image. Therefore, the
organization reinforces the branding through advertising of the products, exhibition, events and
sponsorship, promotional content and offers and showroom layout (Chang, 2009). Such
strategies can help the organization to keep the branding equity live in existing and new
customers.
However, the branding might face the challenges and issues because of the rapid changes in the
market. The organization might face to define clear sub-category of the product and to achieve
the integrated marketing communication. The brand crisis also might occur due to the improper
responses to the challenges. Therefore, the organization is recommended to build the brand
values through customer engagement and focus on brand value leverage to achieve the
competitive goals and objectives.
Conclusion
Branding is directly associated with the marketing function of the organization. L’Oreal has to
focus on the marketing so that the advertisements and promotional contents can be aligned to the
branding vision. Also, branding helps to improve the marketing and considered as marketing
tool. For example, branding helps to aware the customers for the products and services and
engages them into purchase whereas branding also ensures higher success of the business
practices to attain the competitive goals (Yin Wong and Merrilees, 2007). Therefore, it is
determined that the branding is the fundamental requirement of the organization to establish the
loyalty among the customers and to ensure that the products and services are reaching and
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meeting the customer expectations and demands. The application of the suitable brand equity
management also can help the organization to respond to the challenges and to reduce the risks
of the branding failure.
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Task 2 – Brand portfolio and hierarchy management
Analyze the organization’s brand portfolio strategy
The collection of brands under the organizational control defines brand portfolio (Petromilli et
al., 2002). However, the organization can use the different brand names to group the products but
the brand portfolio strategy is the competitive approach of the organization to create commercial
values from the product perceptions.
House of brands: The name implies that the sub-brands of the corporate are promoted rather
than the corporate or parental brand (Morgan and Rego, 2009). For example, L’Oreal has several
beauty products for the women such as Matrix, Essie and Red-ken. Lancôme, Vichy and L’Oreal
Paris are some of the major brands to categories the products and they are used to drive the sales.
Figure 5: House of brand view in L’Oreal
Branded houses: it means that the parental brand is used to improve the awareness of the
products or brands. In some of the products, those are also not well-established in market; the
organization uses the branded house portfolio (Petromilli et al., 2002). For example, The Body
Shop and Maybelline are mainly promoted through the name of the parent brand.
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Figure 6: L'Oreal branded house
Mixed approach: It is the mixed approach as L’Oreal uses the approach to categories the
products and to define the brand portfolio. For example, Maybelline and Body Shop are under
the branded house products whereas Matrix, Essie and Red-ken are defined under the house f
brands. The mixed portfolio is also significant to achieve flexibility for the market response and
to reduce the impact of the failure of the brand equity.
Provide an illustration of the hierarchy management of brands within organizations portfolio
The brands are required to manage in a hierarchy to achieve effectiveness in the brand equity
management. For example, L’Oreal provides skin care, make-up, hair care, hair color, perfume
and other products. There are mainly three approaches to manage the hierarchy under the
portfolio:
Endorsement: The unique features of the products are promoted in comparison of the brand. It
means to endorse the values of the product in market and to enhance the sales. For example, the
women empowerment is at core of the advertising in the L’Oreal advertising whereas beauty
products are also promoted with highlight on the innovative design and improved quality. It
helps to endorse the sales (Douglas et al., 2001).
Umbrella branding: it means to keep the brands under a same parental brand. For example, the
top brand is L’Oreal which is further divided into L’Oreal Paris, Lancôme, L’Oreal professionals
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Paris, and Vichy. Under the umbrella, several other products exist. Therefore, the umbrellas are
not used only to manage the hierarchy but also to protect the brand image during the failures.
Product branding: The name of the particular product also can be used to attract the market. For
example, Garnier is the product of the L’Oreal Paris but it is widely promoted through the
product name because of the popularity and demands in the market (Shahri, 2011). It helps the
organization to introduce more variants of the products effectively and to manage a brand as
isolated control.
Figure 7: Product branding on Garnier Fructis products
Analyze strategies used for managing the equity of the brands within the organizations portfolio.
The organization can manage brand equity within the organizational portfolio through the
consideration of the various factors on the branding. For example, collaboration among the
resources, values of the products in customer perception, emotional capital, brand reputation,
accuracy and reliability of the legal and ethical issues, awareness and communication can be
considered as major factors during the building of brand equity management strategy (Wood,
2000). The organization also can consider the consistency strategy so that the products and
services are consistent in the market to attract the customers and to empower the profitability and
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