CHAPTER 8- BRAND

BASED STRATEGIES
A summary on the chapter titled Brand based
strategies, Presented by:
Ivene Daniel
PGPB Class of 2016-2018
By definition, brand strategy is a long-term plan for the development of a successful brand in order
to achieve specific goals. A well-defined and executed brand strategy affects all aspects of a business
and is directly connected to consumer needs, emotions, and competitive environments.

A brand is an intangible asset of the company which enables the company to earn super profits on its
tangible assets.

Every brand makes a promise. But in a marketplace in which consumer confidence is low and
budgetary vigilance is high, its not just making a promise that separates one brand from
another, but having a defining purpose," explains Allen Adamson, chairman of the North America
region of brand consulting and design firm Landor Associates.

Brands can be based on either products or consumers.

An example of product based brand strategy mentioned in the chapter is of Coca Cola and Marlboro
wherein these companies focus on creating value for their shareholders. Such companies do not spend
much on research and development for developing new product lines but focus more on their existing
products. A product based brand strategy focuses on building the current streghth of a particular brand
with its existing customers by looking out for new customers for the existing products sold under the
brand. On the other hand, a customer based brand strategy is when companies focus on creating value
for its shareholders by developing new product lines and focus on selling it to their existing customers.
Keller's Brand Equity Model, also known as the Customer-Based Brand Equity (CBBE) Model is a model
which describes the value of having a well-known brand name, based on the idea that the owner of a
well-known brand name can generate more revenue simply from brand recognition; that is from
products with that brand name than from products with a less well-known name, as consumers believe
that a product with a well-known name is better than products with less well-known names

In both the cases, the barnd increases the financial return theat can be generated from the product but a
strong brand can also reduce the volatility of cash flows produced by the underlying product. Many
stages are involved in creating brand value which is a process of converting brand into a long term asset.
The development process requires considerable financial investment by the owner of the brand. Here
comes the role of Marketing Finance which converts the pure marketing measures into financially
relevant measures that can ensure that the brand provide substantial value to the shareholders.

Case Example of Marks and Spencer

In the UK, Marks and Spencers is a perfect example where existing customer loyalty has
enabled retailers to expand significantly the range of products sold under the retailers own
bramd to the customers.
Since the first retail investment rpoducts received a very high level of customer up take,
investors became very keen to place their money with someone they aldready knew who could
help them achieve good value for money.
Marks and spencer had to invest in its core brand to modify or alter the key element in its
original marketing strategy(current premium products that do not contain the St. Michael
branding).
A brand's equity contributes to the overall valuation of the company's assets as a whole. A brand is a
product with a unique and distinctive iodentity and proposition that is consistently delivered through
time and place. The marketing expenditure required to develop and maintain must be rigorously
financed and controlled. One if the key financial justificstsion for developiong brand based stratey is that
the brand will yield significant value to the shareholders. This also means that if the if the companys
branding startegies are financially successful,the brand will be earning profits over and above the
compsnies assets. However before considering how to financially evaluate, control and manage such a
potential valuable asset, its is important to understand the origin oif the brand.

With the volume of competition that businesses face in most industries, its never been more important
to stand out and develop a unique identity and value proposition through strategic branding. While its
obviously important to offer a quality product or service, effective branding is often at the heart of the
companies that thrive. Brand building is the deliberate and skillful application of effort to create a
desired perception in someone elses mind.

The common characteristics of successful brands, so you can build your brand accordingly are Audience
Knowledge, uniquenesss, pasision and consistency. In case a company fails to achieve these, the financial
evaluation mustb ensure that proper allowance is made for required rate of return on the additional
tangible assets that re useful to produce brand value.

A brand asset enables a level of super profit to be earned. Many ccompnies go about exploting or taking
for granted the brand image by procong their products at a premium or associating status with the
products of the company(Example: Apple, Royal Enfiled). Another way if achieveing super profits would
be by enabling agreater volume of sales to be achieved than with an unbranded equivalent product. In
other words, the branded product si sold at the same proce as the unbranded product. As the brands are
sold at the same price as the other products its is iften referred to as value for monry.

Brand development is the process of creating and strengthening your professional services brand. As we
help firms develop their brands, we divide the process into three phases.

The first phase is getting your brand strategy right and aligned with your business objectives.
Second is developing all the tools you will need to communicate the brand, such as your logo,
tagline and website.
Finally, there is the phase of strengthening your newly developed or updated brand.

There are many stages involved in the development of a brand:

Create awareness of the brand among consumers

Create in the minds of the customers an interest and desire to purchase the product
=Check the ability of the consumer to purchase the product
Enables different levels of trial as it influences the subsequent purchase of the oproducrt
Repurchse
Level of usage through repurchase
Brand attributes are the functional and emotional associations which are assigned to a brand by its
customers and prospects. They are the basic elements for establishing a brand identity. There are 4
primary elements that make up the Brand Attributes. The importance of brand attributes is that the
marketing coomunications should emphasize the critoical success factors whether the company
brand is image related or product related. Comopanies use the concept of corporatye or umbrella
branding in order to reduce the cost of marketing for developing a range of sepertae stand alone
brands. Branding is designed to create some form of customer loyalkty as a lot of research
demonsatres that loyal customers are more profitable tha new customers.

Cae Example of Philip Morris versus BAT plc:

The case is an example of how companies cannot take over their market competitors by
implementing same branding and marketing satregies as the competitor compoany.
Philip Morris had a very successful product based branding strategy built around its brand
Marlboro. BAT plc which is a totally fpcused tobacco group has a vision to achieve leadership of
the tobacco imdustry. However gor Bat plc, the company does not have any brand under that
comes close to Marlboro. However the company can adopt alternative branding startegies based
around a ine size fits all philosophy. It is also looking to devlop superior products that enhances
the unqie customer positioning of the differentiated brand portfolio. Therefore, product
diferntiaon is being allied with customer segmentation which is to be made available with world
class customer service.