Branding strategy

Importance of Brand Strategy

Let's now shift our attention to the importance of brand strategy. What role do brands play for customers and organizations? Here are three critical roles that brands play:

1. Intellectual property protection - the legal recognition of a trademark is important as it allows companies to differentiate their brands without the risk of competitors copying their logos, designs, etc.

2. Quality guarantee - brands take responsibility for guaranteeing the product quality and features marketed to customers.

3. Personal benefits - branding is essential as it helps create an emotional attachment to the product/brand in customers' eyes.

Brands can bring a variety of benefits to customers, including tangible, intangible, functional, and psychological benefits. Ultimately, a brand's objective is to foster an emotional attachment with customers - creating positive and high-value brand associations - as competitors can easily copy the other benefits they might offer.

Branding Strategy in Marketing

A branding strategy in marketing goes beyond having a recognizable logo and a positive brand image. It aims to create a relationship with customers and improve their perceptions and attitudes towards a product or service. To do so, companies have to follow three key principles:

• Brand vision - to develop a strong brand, the brand must establish and communicate its vision to its target audience. To this, the brand first has to establish:

  • Purpose: What does the brand bring to its target audience/society?

  • Future: Where do we see the brand going in the future?

  • Values: How does the brand behave? How should the brand behave?

• Brand authenticity - a brand must stay true to its vision and purpose to build authenticity in the eyes of consumers. Brands need to align external messages with their brand promise and internal capabilities. If a brand fails to deliver on its promise, it risks losing its authenticity.

• Brand connection - another vital aspect of brand success is portraying the emotional benefits the brand can provide. Customers may choose certain brands to covey their self-identity and project this identity onto others through their material possessions.

By focusing on these elements, a brand creates brand equity.

Brand equity is concerned with customer preference and loyalty. A well-known brand can generate more profit simply because customers know it. When a brand has positive brand equity, customers react to its product more favorably than to similar undifferentiated products.

Types of Branding Strategy

Let's now focus on the types of branding strategies. To form a brand strategy, marketers have to make various brand decisions.

Brand positioning strategy

Brand positioning is an essential element of the branding strategy.

Fig. 1 shows how organizations can position their brands based on three stages.

Fig. 1 - Brand Positioning, StudySmarter Originals

1. Positioning based on product attributes - product quality, features, design, etc.

2. Positioning based on benefits - the benefits it brings to customers/users.

3. Positioning based on beliefs and values - focusing on the emotional connection between the brand and consumer.

Brand name strategy

Building a solid brand name can be difficult, but it is crucial to business success. Robertson (1989) proposed that a brand name should be "simple, distinctive, meaningful, emotional, make use of morphemes, phonemes, alliteration, consonance, and should make a sound associate of product class, as well as being legally protectable".² To put it simply, a brand name should be:

• Easy to recognize and pronounce,

• Extendable,

• Translatable to different languages.

Brand sponsorship strategy

Another vital part of branding strategy includes making sponsorship decisions. Manufacturers can typically choose from four sponsorship options:

1. Manufacturer's brand - brands that the producer of a product owns. These brands are also referred to as national brands. For example, Apple produces, markets, and sells its products under its own brand name.
2. Store (private) brand - a brand that the product's reseller owns. These brands are sometimes referred to as 'generic', 'own brand', or 'no-name' products. For example, By Sainsbury's produces a variety of food and household products and Boots produces its own version of Boots Paracetamol.
3. Licensing - certain companies may want to license their trademarks, symbols, etc. The licensee gets instant access to a brand name and thus does not have to develop its own brand.
4. Co-Branding - using two brand names on the same product. Co-branding allows both brands to benefit from each other's strengths and reach a broader range of consumers.

Brand development strategy

When it comes to brand development strategy, a brand has four strategies to choose from (see Fig. 2 below):

1. Line extensions - extending the current brand name by introducing new flavors, sizes, etc., to the current product offering. For example, Coca-Cola introduced lemon-flavored Coca-Cola. It is a relatively low-risk strategy; however, marketers must ensure not to confuse customers by introducing too many new products. Overextension may also result in the cannibalization of existing products.
2. Brand extensions - extending the brand name to suit a new product. Brand extensions can generate high customer acceptance as customers are already familiar with the brand. It is also cheaper for organizations to extend a brand than to develop and market a new one.
3. Multi-brands - creating unique brand names for different products. A multi-branding strategy can be used to target various customer segments who like a product/brand for different reasons. For example, Coca-Cola has a variety of soft drink brands like Fanta or Sprite, in addition to mineral water (Smartwater) and flavored water (Vitaminwater) brands. This allows Coca-Cola to seize a more significant percentage of market share than if it was only to sell its original Coca-Cola soft drink.
4. New brands - creating a new brand name for a new product category. A new brand name may be needed when the existing brand name is weak or does not mesh well with new product developments.

Fig. 2 - Brand Development Strategies, StudySmarter Originals

Branding strategy examples

Let's finally take a look at some branding strategy examples.

1. Brand Positioning

2. Brand Development/Sponsorship Strategy

Before you head off, let's summarise this lesson with a few key takeaways: