A brand is created by a company to represent what consumers should expect or perceive about that specific product or organization. If a company’s brand cannot live up to the expectations set by the organization itself, then the brand will lose its brand equity, and consumers will see that particular brand as undesirable. Conversely, if a brand exceeds the normal expectations of the company that owns it, that organization as a whole may gain more favor with consumers than it had previously. Although brands are primarily constructed and fabricated by the large corporations that own them, it has been shown time and again that the perception of a brand is entirely up to the market.
As you can see below in figure 6.A, Kotler & Armstrong have identified four key steps to a proper branding strategy. These key branding strategy decisions can be found on page 245 of Principles of Marketing (2012).
Figure 6.A
Image Source: (Kotler & Armstrong, 2012)
- Brand Positioning – Brand positioning is the first and most important strategy because it sets the market placement for the brand; all other steps cannot fall into place until positioning is complete. There are three different ways to position a brand, each with increasing difficulty and higher potential for noticeable returns. The first form of positioning is attribute-based, in which a company identifies its brand by a particular product feature. Using the iBrick as an example, a water-proof and damage-resistant iPhone that was created by my team and I during our market planning assignment, an apt attribute-based positioning would be one that emphasizes the water-proof coating or shock absorbing features. Attribute-based positioning is the most basic and simplified because it only identifies the product by its physical features. A better form of brand positioning is benefit-based, in which a company positions its brand based on the desirable benefits. A benefit-based positioning for the iBrick would be one that emphasizes not the physical features of the phone, but the perks that come with owning an unbreakable smartphone. Finally, a company can position its brand based on beliefs and values. In this form of brand positioning, a company associates its brand with a particular belief of value that it wants its customers to share. Belief-based positioning for the iBrick would advertise that the product seeks to reduce preventable spending on newer phone models by offering a phone that can endure anything, and that iBrick consumers are individuals who prefer durability to attractiveness or flashiness.
- Brand Name Selection – Selecting the proper brand name is an incredibly difficult process that requires consideration of many different aspects. A brand name should, of course, be identifiable, unique, and easy to pronounce, however there are several more factors to consider. For one, a brand name should be extendable, and allow the brand to grow into new markets should the opportunity arise. As mentioned in Principles of Marketing, Amazon is a great example of an extendable brand name. While the company was once an online book retailer, the name Amazon allowed for growth into any number of markets (Kotler & Armstrong, 2012). If Amazon had, for example, chosen to go with the name FindSomeBooks.com, then the company would have had tremendous difficulty in expanding its brand into new online markets. The other important aspect to brand naming, other than the name itself, is protecting the name once it has been chosen. There are a number of legal requirements for a brand name to become registered and protected, and some companies with well-established brands can still lose these licenses after years of operating.
- Brand Sponsorship – Brand sponsorship is a series of major brand decision making processes in which a company selects how it will distribute its brand. The most common choice in brand sponsorship is to establish the brand as a national brand, in which the manufacturer of the product has full control of the brand. There are, however, an increasing amount of private store brands reaching the market; these private brands are owned by resellers and retailers and usually compete directly with manufacturing (national) brands. Should a company choose to share its brand, it could employ one of two different methods. If a company chooses to license its brand, it will allow other manufacturers to produce and distribute its brands for a royalty fee. The other method, co-branding, involves two companies combining their brands to be placed on a single product. The iBrick has future potential as a co-branded product. If Apple chooses to work with Corning Gorilla Glass, the company could advertise the strength of Corning Gorilla’s indestructible glass while simultaneously displaying the crack-resistance of the iBrick product. This form of advertisement would benefit both companies and could potentially create a profitable future business relationship.
- Brand Development – The final step in the brand strategy decision making process is the future development of a brand. Because most brands are unsuccessful if left stagnant in the market, there must be a constant stream of product and brand extensions in order to keep consumers interested. During the brand development stage, a company must make two decisions. The first decision is whether to extend its brand into a new product category, or to keep it in its existing category. The second decision is whether to use the existing brand name for this product extension, or to re-use the old brand name. Each outcome for these decisions has its own benefits. While change may be good in some markets at certain times, a company must be sure that its brand development does not jeopardize the existing success of the brand.
References
Kotler, P. & Armstrong, G. (2012). Principles of Marketing. Upper Saddle River, NJ: Pearson Education, Inc.
Chad Sorensen - Marketing Portfolio 