Effective Brand Development and Management - Literature review Example

Literature Review – Effective Brand Development and Management Abstract Branding which started out a simple component in the marketing strategy with its focus in the advertising activities has now developed in to a process that integrates overall organizational effort in to delivering differentiated customer value which sets the product apart in the minds of the consumer. Branding today is responsible for creating favourable associations of the brand in the minds of the consumer, eliciting brand responses such as purchases and then establishing long term customer loyalty. Branding is therefore of critical importance not only to companies engaging in Business to Consumer (B2C) sector but also for those companies that are operating in Business to Business (B2B) sector. As branding is the vehicle which accomplishes the positioning strategy of the company, the corporate image of the firm also plays a key role as consumers tend to associate the corporate image with the products of the company. Role of brand management is therefore to be concerned not only with the advertising and imagery components of the branding but on the overall management of integrated effort of the organization in delivering the value promise being made by the branding massages. While many companies try to launch brands and make them work very few achieve this target. This paper presents an overview of above issues pertaining to branding and attempts to understand what entails effective branding. It also proposes essential components of good branding and steps recommended for building brand equity. 1. Introduction This Literature review paper will present its findings in two main sections. The initial section will cover branding, positioning and its roles and importance. In this section, the role of branding in the marketing process and the importance of branding to organizations will be reviewed first. The usefulness of branding for B2C and B2B sectors will also be reviewed. The paper will then assess how branding influence the positioning strategy and the role of corporate image and brand management in effective positioning. Finally the literature review will consider how to make branding process more effective. The second part of the paper will present essential components of branding strategy coupled with steps in creating brand equity. 2. Overview of Branding To differentiate the products from the heavy competition, an appropriate image has to be built and communicated to the consumer which are both appealing to them and which can be the basis upon which the customer loyalty is built upon in the long run. Cowley (1991) traces the origination of branding as a means by which firms created this desired differentiation. To ensure that consumer choose the company’s product from available alternatives, the first step it to gain a position in the consumer’s mind. This position in the mind of the consumer should be a favorable image of the product that would influence the consumer choice. Aker (1996) highlights this by stating the initial role branding played by “acting as a promise of consistence and quality for consumers”. Further developments in branding has now made it more than a mere promise and “offers consumes a unique set of perceived benefits not found in other products” (Randall, 1997) Czinkota et al. (1995) defined branding as “the image of a product or service. The good brand refers to a name, term, symbol, sign, or design used by a firm to differentiate its offering from those of its competitors” Levitt (1986), compared people’s choice of brands being similar to their choice of friends. He stated that a successful marketer must “surround his generic product with a cluster of value satisfactions” that make up the final and overall proposition being offered to t he consumer. These intangible elements which surround the tangible product will add value in such a way that the value delivered to the customer far exceeds the actual cost of the core product. Vrontis (1998) described a brand to be more than a product and that it adds meaning, value and personality through a combination of brand elements such as the product, brand name, packaging, symbols, themes which in combination conveys a single brand image (Vrontis 1998). 3. Importance of Branding Importance of branding in the marketing process is no longer doubted by any company. Brands have become not just a value addition to products and services today. They are influencing every aspect life from “production and consumption, food and clothing, personality and lifestyle; and from pop culture to politics” (Fan, 2005). Knox (2004) points the importance of branding increasingly being recognized in the asset valuation process of an organisation. Brand equity is sometimes awarded a value that far exceeds the actual tangible asset valuation of the organisation (Davidson, 1998). The large premiums being paid for the brand equity is evidence of how important is branding in terms of evaluating a product’s success. For instance, Nestlé paid £2.6 billion for Rowntree though the company's balance sheet value was only £0.4 billion. (Kotler et al., 1996) Branding is important because it acts as the means by which a company can differentiate itself and own a share of mind of the consumer. Knox (2004) points out brand as “an entity that offers customers added value based on factors over and above its functional performance”. The importance in branding lies in its ability to provide these added values, or brand values which differentiate the offer and creates the basis for customer preference and loyalty (Lancaster and Reynolds, 1995). Branding is equally important for fighting competition especially during the difficult economic conditions by capitalizing on the long term consumer relationships established through the branding process. Importance of branding can be further highlighted by considering how it acts as the integrating process of the marketing activities. Traditionally the 4 Ps were executed on their own agenda’s and the results were sometimes contradictory, and confusing to the consumer. There was no intended image which was being positioned within the mind of the consumer. The product was offering some features which the production department felt was what the consumer wanted. The finance department priced the product not with a marketing orientation but with a financial perspective and did not take any image in to consideration. (Armstrong & Kotler 2000). With marketing managers increasingly recognizing the importance of branding companies are replacing the traditional 4Ps approach with a more integrated branding approach. Vrontis (1998) points out that successful branding is important for the success of the company as it opens up potential for new product introductions that can capitalize on the existing brand reputation. These brand extensions can expand business and allow for growth of the organisation. In some cases, “the potential credibility of a brand is so high that companies can launch brand extensions onto existing markets; a strategic option that is readily accepted” and capitalize on the positive attributed of the brand association (De Wit & Mayer 1995). Having reviewed the importance of branding for organizations, next section will explore the role of brand management and corporate image in the task of positioning. 4. Role of Brand Management in Positioning With the importance of branding in the rise, the role of brand management too has become increasingly important and a demanding task. As per Kotler and Armstrong (1997) brand managers role is to “plan long-term brand strategy and watch over their brand's profits” Kotler and Armstrong (1997, p. 62). Viau (2001) defines the role of brand management to include “cultivating intimate, credible and trusting stakeholder relationships for a corporation's products and services” which has to be combined with supporting marketing plans to influence purchasing decisions and ongoing loyalty levels (Viau , 2001). When evaluating the role of brand management and the brand manager in the positioning of product or organization, traditionally advertising activities were seen to be the key task. However it only plays a small role in creating and maintaining brand equity in the long run and only contributes “information to form informational beliefs and pre-consumption associations” within the brand building process (Boyle, 2007). The more enhanced role of brand management as per Boyle (2007) includes responsibilities such as “new product development, exploring alternative modes of marketing communications, building customer relationships and ensuring equity between brand price and consumer value” (Boyle 2007). Through such important and integrated roles, brand management contributes to the supporting the authenticity of the product positioning. The positioning messages can make promises of product features, image, need satisfaction and lifestyle claims but it is through price decisions, product development, customer relationships and various modes of innovative communication means that the authenticity of this claim is maintained. Furthermore, with the brand management role of customer relationship building, the insights gained in to how customers perceive the product, what satisfaction levels are being enjoyed and the gap between the pre consumption brand association and post consumption brand association can all be made used to modify the positioning strategy if the need exists. It is therefore a very significant role which brand management process has to play in the creation and establishment of a favorable product position in the minds of the consumer (Boyle 2007). 5. Role of Corporate Image in Positioning Corporate image of the organisation which is marketing a product or service also carries great implications on the positioning strategy. Branding at corporate level therefore can be leveraged to benefit the products and services it markets through the association with the corporate image. This is why there is an increasing trend towards corporate marketing to manage the corporate image of an organisation (Balmer and Greyser, 2003). (Fan 2005) states that “brands represent not only the products or services a company provides but the firm itself, the brand is the company and brands become a synonym of the company's policy” (Fan 2005). Therefore there is an essential interlink age between corporate image and the brand positioning process of a company. To assess what role the corporate image plays in influencing the positioning strategy, an evaluation of some of the essential elements that influence corporate image should be reviewed. Balmer & Grayser (2006) indicate that there 6Cs in managing corporate marketing process which in turn influence the corporate image. These are the character, culture, communication, conceptualization, constituencies and covenants. Character element of the organisation includes “key tangible and intangible assets of the organisation as well as organisational activities, markets served, corporate ownership and structure, organisational type, corporate philosophy and corporate history” (Balmer & Grayson 2006). Similarly corporate culture also plays a key role in the positioning since it affects the beliefs, values and heritage of the organisation. The communications in the form of public relations which the company undertakes will be another key aspect of corporate image that will play a key role in the product positioning. This is because if a company’s corporate image is well supported by public relations communications then there is a better authenticity and positive association between corporate image and the positioning message intended to be conveyed to the customer. Balmer (2005) finally cites covenant as an important contributor to corporate image which in turn supports the positioning strategy. “A corporate brand is underpinned by a powerful (albeit informal) contract, which can be compared to a covenant in that customers and other stakeholder groups often have a religious-like loyalty to the corporate brand” (Balmer & Grayser 2006). Such bonding with the corporate brand contributes to a high corporate image and this will support any product level branding and positioning strategies which makes association to the overall corporate image. 6. Business to Consumer and Business to Business Branding Importance of branding in the Business to Consumer market has reached very sophisticated levels. It is no longer a process of communicating a unique selling point or a pay off line through a mass media campaign. Neither it is putting a logo on the product packaging. Marketing and branding process today creates value by integrating the company's suppliers and manufacturing processes to create value-adding business systems (Prahalad and Ranaswamy, 2000). Within this process, successful branding gives the company a competitive edge in the minds of the consumer. On the other hand, if a company does not create and manage “a focused, meaningful branding expression, relationships and loyalty levels” with consumers there is greater chance of brand switching and vulnerability to competition. As per Viau (2001) branding is essential to convey to potential customer of the company's products or services in a focused and customer oriented manner so that they feel an affinity with the organisation. In this light, branding is essential for both survival and success in the Business to consumer markets. Branding is no longer a practice undertaken solely by business to consumer segment. It is firmly embraced by the business to business and service organisations as well. The rise of this trend started off during the late 1980s to early 1990s was prompted by the success of those B2B firms that applied the principles of branding in to their business models such as Dell Computer Corporation (Abrahams, 2001). Firms such as Accenture which is a B2B business consultancy firm is an example of moving towards fully fledged branding through repositioning itself in the “IT led Change management market place” with a combination of branding activities supported by a largest ever national level TV advertising campaign which is not usually the route undertaken by B2B firms. Branding described by Viau (2001) “cultivates intimate, credible and trusting stakeholder relationships for a corporation's products and services, and combines with supporting marketing plans to influence purchasing decisions and ongoing loyalty levels” (Viau 2001). Thus it is obvious that such branding can play a key role in the marketing process of B2B business sector as well and with equal benefits as in the case of B2C sector. Even in the B2B sector, the branding helps create differentiation, added value and customer relationships and loyalty through the brand associations. These associations no doubt elicit a brand response and establish brand relationships which may be mainly at corporate branding level that supports the penetration, expansion and sustenance of market share in competitive B2B segments. The importance of branding in B2B sector may have come to fore with role of branding developing in to customer relationship building through value addition and thus marrying well with the B2B marketing concept which firmly hinges upon long term customer relationships. Combined with other aspects of branding such as imagery, brand awareness supports etc. the B2B sector stands to benefit equally so as B2C sector from branding strategies of an organisation. 7. How to Develop and Sustain Effective Branding As per available data, an estimated 75 – 85% of attempts at creating new brands end in failure (Murphy, 1998). Murphy further elaborates that it is often the case that no possible causes for failure can be ascertained (Murphy, 1998). This goes on to point out how important it is to understand but often misunderstood might be the concepts of what entails effective branding. As per Brown et al. (2003) effective brands are created in collaboration with the consumer and organization than merely by the businesses itself. It is not a “a passive or reactive result of marketing intervention by brand managers on consumers” (Brown et al., 2003, p. 30). Number of scholars on the subject reiterates the important involvement of the consumer in the brand creation process (Sherry, 1998; Brown et al., 2003, Coupland et al., 2005). As per the findings of Coupland et al. (2005) studies indicate that “the consumer is an active partner with the marketer in brand-meaning formation” ( Coupland et al. (2005, p. 107) Unless this is accepted and incorporated in to the branding process, it is likely that the efforts of brand creation and development will lag behind or end in failure (Boyle 2007). Secondly for branding to be effective, there has to be cohesion and integration between the various processes within the organization. Mitchell (1999) state that for delivering superior customer value which is what branding aims to do today, organisations need to “touch customers in a myriad of ways, which go far beyond marketing communications about products and services” (Mitchell, 1999). From customer contact points in the front line, to web interactions, handling customer complaints to delivering what the product features claim, all needs to become a combined force of catering to customer, reinforcing the brand promise, making a positive brand association within the customer’s mind in the post consumption brand response phase. As per Doyle (1998) this is because, “each experience provides a context for customers to evaluate and test the organisation's image and reputation and its ability to deliver against expectations”(Knox 2007). Doyle (1998) further states that to achieve such an integrated approach, “the context of the brand has to change to embrace culture, know-how and organisational systems and processes, as well as products” in order to build and sustain effective brands (Doyle, 1998). Finally, to support such organizational wide integration, the marketing communications which are one of the key vehicles of the branding message needs to take an integrated approach. The concept of Integrated Marketing Communications (IMC) addresses the need for organizations to deliver clear, compelling, cohesive and consistent marketing message about the company and its product through carefully integrated and coordinated communication activities utilizing many marketing mix elements (Fitzgerald 1988, Armstrong & Kotler 2000). The aim of such coordinated and integrated communication activities is to achieve a synergy through the unified massage delivered by synthesizing the “bundle of massages” the customer receives (Belch & Belch 2004). By integrating the marketing communications, a company avoids confusion by different messages as well as duplication. It takes advantage of synergy among various promotional tools and uses it as a reiteration of different medium’s messages so that each element reinforces the other. Such an integrated approach will facilitate the creation of a strong brand image in the mind of the customers and sustaining it over time. As discussed, for effective branding, a combination of organizational wide integrated effort towards delivering unparallel customer value that is differentiated in every sense has to be achieved. This process has to also recognize the customer involvement and level of control the consumer has on the brand success. A combination of all these factors can help organizations effective develop and manage their branding process for the success and expansion of their business. Next section will explore what are the essential components of effective branding. 8. Essential Components of Effective Branding Strategy Developing an effective brand is the focus of most businesses today but getting the correct and effective strategy in place is not something that has been mastered by many. Following are some of the essential components of an effective branding strategy which should be considered for successful brand development and management. A brief review of these components is as follows: 8.1 Brand essence Brand essence or the core promise of the brand is an important component in the branding strategy. It should be differentiable, sustainable, communicable, superior, important, affordable and profitable (Armstrong & Kotler 2001). An effective branding strategy should identify a core brand feature that complies with above key requirements and promote it as the essence of the brand (Macrae & Uncles, 1997). 8.2 Brand Identity Identity is another major component which contributes to an effective and successful branding strategy. Macrae & Uncles (1997) cites the importance of signs and symbols which are unique and striking that can attract and remain at the top of consumers mind. These imagery should prompt the consumer to recognize the brand easily and differentiate it from the rest. Effective branding strategies will not only develop and manage such identities but also leverage them to expand marketing presence while taking in to consideration the appropriateness and relevance form different market to market especially in the global sense. 8.3 Brand Heritage Brand heritage too is a component of effective branding strategy which can be leveraged to enhance the consumer relationship. For some, the heritage signifies familiarity, trustworthiness and sense of belonging. However, this component of branding strategy must be handled carefully to avoid brand obsolesce as longevity is no assurance of brand success (Macrae & Uncles, 1997) 8.4 Future Innovations Keeping the brand fresh and dynamic is essential element of the branding strategy. This is often done with innovative new changes that allows for fresh brand news and face lifts to imagery and symbols. The branding strategy has to therefore take these necessary changes in to account and plan ahead for creating brand news. 8.5 Media Choices With the changes in media options, and the shift in prominence from mass media to other options such as web based interactive media choices, this component is an essential element in effective branding strategy. Making the correct choices include selecting appropriate channels as well as the correct media mix that can convey the brand massage effectively and memorably 8.6 Other Considerations In addition to above components of effective branding strategy following are some of the critical questions which marketers should prompt themselves if effective branding strategy is to be developed and executed. Is there departmental integration and contribution towards the overall success of the brand? Is there cohesion and collaboration across departments to deliver brand value promised to the consumer? Is the brand benefits fully leveraged through connections of umbrella and banner brands? Are we essentially managing a variety of product brands or a portfolio that aggregates into a coherent corporate brand? What role does the brand plays within the overall brand architecture? Is it suitable or need to be revised? Is the brand operating as a corporate brand, umbrella brand or a sub-brand Is the branding strategies backed by the right core competences? Is it making use of the overall corporate competences? Is the management support and involvement in the branding process at its optimum level? By considering these questions, organisations can develop and execute effective branding strategies that can add value to its customers and create lasting relationships based on differentiated customer value that results in customer loyalty. 9. Steps for Building Brand Equity Successful development and management of branding activities will lead to a high level of favorable brand equity. As per Keller (1998) brand equity is unique from customer loyalty, and can be defined as the “differential effect that brand knowledge has on consumer response to the marketing of that brand” (Keller, 1998, p. 45). Having reviewed existing literature and recommended models and theories on brand equity, following steps are recommended for organizations interested in developing effective brand equity and sustaining them successfully. 9.1 Brand Identity – The fist step of creating a proper brand identity included establishing breadth and depth of brand awareness. This is to be done through appropriate brand imagery and message being conveyed in proper dose and at right time and place. Taylor et al (2004) points out that it is essential to “ensure identification of the brand with customers and an association of the brand in customers’ minds with a specific product class or customer need.” The resulting brand salience includes not only the top of mind awareness of the brand and a high mind share but these two to be present at the right time and right place. 9.2 Brand Meaning – This is the second step of creating brand equity. It involves “creating the appropriate brand meaning in the mind of the consumer through strategic linking of a host of tangible and intangible brand associations. As per Tylor et.al 2004, “creating brand meaning involves establishing a brand image—what the brand is characterized by and should stand for in the minds of customers”. Such brand meaning can be a combination of both functional performance related considerations and abstract imagery. The brand meaning is a combination of what the organization promotes and what the consumer himself creates in the mind after experiencing the brand performance. 9.3 Brand Response – The third step in the process is to elicit a positive, accessible brand response. This includes what the customer thinks or feels about the brand and its activities. Depending on the subjectivity and objectivity of the response they can be either brand judgments or brand feelings. Brand judgments can be on quality, credibility, considerations and superiority of the brand. Brand feelings on the other hand are customer’s emotional responses evoked by the brand. 9.4 Brand Relationships – Forging brand relationships is the final step of the equity building process in which the resulting customers will be loyal and intensely involved with the brand. Once the branding reaches this stage, the customer identifies with the brand and finds that they are “in synch” with what the brand represents (Taylor et.al. 2004). Such loyalty can be in the form of behavioral loyalty that results in repeat purchases; attitudinal attachment in which the customer has a strong personal attachment to the brand. Thirdly the brand relationship can reach a stage of sense of community and affinity with other brand users and finally a stage of active engagement with the brand by seeking information, sharing inputs and ideas and actively promoting the brand. 10. Conclusion In conclusion, it can be noted that branding can indeed support the success of a company in a major fashion provided that role of branding and what entails effective branding is understood and applied to the development and implementation process. Further, through understanding how branding contributes to the business success through its delivery of differentiated customer value and forging of customer relationships, it can be utilized in not only B2C sector but in B2B sector as well. The role which corporate image plays in the positioning strategy is a key consideration and this is why corporate marketing has earned its own priority in the marketing agenda today. There are essential components of a successful branding strategy and by taking in to consideration these elements, the branding can save itself of the common and high rate of failure present in launching new brands or maintaining and sustaining existing brands. 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