Branding Strategy: Building Strong Brands

Some analysts see brands as the enduring asset of a company, outlasting the company’s products and facilities. Brands are powerful assets that must be carefully developed and managed. Here are some key strategies for building and managing brands.

Brand Equity:

Brand equity is the differential effect that knowing the brand name has on customer response to the product and its marketing. It’s a measure of the brand’s ability to capture consumer preference and loyalty.

A brand has positive brand equity when consumers react more favorably to it than to a generic or unbranded version of the same product. It has negative brand equity if consumers react less favorably than to an unbranded version.

High brand equity provides a company with many competitive advantages. A powerful brand enjoys a high level of consumer brand awareness and loyalty. Because the brand name carries high credibility, the company can more easily launch line and brand extensions. A powerful brand offers the company some defense against fierce price competition.

Building Strong Brands:

Branding poses challenging decisions to the marketer. The major brand strategy decisions involve brand positioning, brand name selection, brand sponsorship, and brand development.

• Brand Positioning:

Marketers need to position their brands clearly in target customers’ minds. Positioning refers to the act of designing the company’s offering and image in such a way that it occupies a distinctive place in the minds of the target customers.

A brand can be better positioned by associating its name with a desirable benefit. Some successful brands positioned on benefits are Volvo (safety), FedEx (guaranteed on-time delivery), Nike (performance), and Mercedes Benz (quality).

[pic]

Figure 1 Major Brand Strategy Decisions

The strongest