The paper "Building Strong Brands" Is a perfect example of a Marketing Assignment. The profitability of an organization is dependent on its brand image. A poor brand image may affect sales leading to losses for the organization. Over the years, several brands have disappeared due to poor performance in the market. Building the brand image as well as putting in place marketing strategies is useful in ensuring that the brand is able to attract more customers in the market. In the current market environment, the level of competition is too high.
New innovative brands are also coming up in the market which has led to an increase in competition (Aaker, 2002). Some of the brands that were earlier performing well are currently facing challenges as a result of competition and changes in customer demands. Volvo is one of the brands that had a huge market share in the 1990s. However, the brand is currently facing problems in the market. The brand may end up disappearing if urgent measures are not put in place. Volvo is known for the production, distribution, and sale of construction equipment, buses, and trucks.
The brand has been in the market for about 100 years as it was established in 1915. The paper is, therefore, a two-year brand plan for Volvo which is intended to improve on its performance in the market. Overview of the problem The company has been facing some challenges which have contributed to its declining performance in the market. Volvo has been facing declining sales and losses in the past five years. In the first quarter of 2014, Volvo sold 19,571 vehicles in the US market which was a decline of 8% from the previous year (Borjesson, et al, 2014).
The decline in sales and profitability has the potential of affecting the performance of a company in the market. The brand image of the company in the market is poor as a result of some unethical activities carried out by the company. The company has been accused of inflating the sales figures in order to obtain cash incentives. The dealers of the company have also been accused of fraud which has affected its brand image.
The market share of the company in the USA is greatly reducing as a result of competition from other brands such as Toyota (Borjesson, et al, 2014). A reduction in the market share usually affects the sales and profitability of the company. The company has also been losing its customers to its competitors in the market. Any business organization is dependent on the customers for its survival. Losing customers has negative impacts on the brand. The rising cost of production is affecting the profitability of the organization. Some of the raw materials that the company has been using over the years have been facing a steady price increase.
The prices of the brand are not competitive in the market and this has affected its sales. Repositioning strategy In order for the brand to improve on its performance, it should embrace a repositioning strategy. The company will have to change its relationship with the customers by exploring the needs of the customers. The marketing strategy of the company will have to be changed completely in order to ensure that the brand is repositioned.
The company will have to utilize the social media and the internet for the promotional purposes. The use of social media is intended to attract the new customer segment. Currently, the majority of customers in the industry are youths who are conversant with the social media (Elliott & Percy, 2011). This strategy will also play an important role in terms of attracting new customers. The brand has been losing the customers and failing to attract new ones. The repositioning strategy will therefore play an important in solving the problems that it is facing.
Laying a foundation for the market repositioning strategy will be carried out so as to ensure that the process is successful. This will be carried out through investing in the research and development. Research will be carried out for the purposes of identifying the needs of the customers. The profile of the company will also be changed in order for it to be associated with the customers. This is considering that the repositioning strategy will target the new customers who are youthful. The outlook of the company will mainly be associated with the youthful customers.
This is opposed to the current brand which is mainly associated with the elderly.
List of References
Aaker, D, 2002, Building Strong Brands, London: Simon & Schuster.
Elliott, R, & Percy L, 2011, Strategic Brand Management, 2nd Edition. Oxford: Oxford University Press.
Beverland, M, 2009, 7 Habits of Iconic Brands, Basingstoke: Palgrave Macmillan.
Wallace, E, et al, 2010, Creating Powerful Brands, Oxford: Elsevier.
Hatch, M, & Schultz, M, 2008, Taking Brand Initiative, San Francisco: Jossey-Bass.
Helding, T, et al, 2009, Brand Management, Research, Theory and Practice, London: Routledge.
Keller, D, 2008, Strategic Brand Management, New Jersey: Prentice Hall.
Kapferer, J, N, 2012, The New Strategic Brand Management, 5th Ed. London: Kogan Page.
Lopes, T, & Duguid, P, 2010, Trademarks, Brands and Competitiveness, London: Routledge.
Borjesson, S, et al, 2014, The challenges of innovation capability building: Learning from longitudinal studies of innovation efforts at Renault and Volvo Cars. Journal of Engineering Technology Manangement, 31, 120-140.