Devising a Branding Strategy

The branding strategy for a firm reflecis iben timber and nam re of common and distinctive brand elements applied 40 the different products sold by the firm. In oilier words,, devising a branding strategy involves deciding the nature of new and existing brand elements to be applied to new and Existing products.

The decision as to how to brand new products, 'is especially critical. When a firm introduces a n(jw product, it lias three main choices:

I, It can develop new bland elements for the new product. '¿. It can apply some of Us existing brand elemeuis. 1 11 can use a combination of new and existing brand elements.

When a firlit uses all estaldished brand to introduce a new product, it is called a brand e.\len sion. When a ttew brand is combined with an existing brand, the bland extension can also be called a sub-brand, as with llersbcy Kisses candy. Adobe Acrobat software, Toyota C'amry automobiles, and American Express Hlue cards. An existing brand that gives birth lo a brand extension is referred to as the parent brand. If the parent brand i1-, already associated with rnuliiple products til rough brand extensions^ then it may also be called a family brand.

Brand extensions can be broadly classified into two general categories:1'1 In a line ex I elision. the parent hrand used to brand a new product that targets a new market segment within a product category currently served by the parent brand, such as through new flavors, Forms, colors, added ingredients, and package si/.es. Dannon has introduced several types of I mi on yogurt Jjne extensions through the years—1: rut t on the Hot nun, Natural Idavors. J-'ruit Blerkls. and Whipped, In a category e^icnslon, the parent brand is used to enter a different product category from that currently served by l he parent brand, such as Suiss Arrm Wiitehes. Honda has used its company name to cover such different products as automobiles:, motorcycles. snowbioVfers, hnvnmowers. marine engines. <md snowmobiles. This allows 1 londa iq advertise that j[ can Ijt "sis Hondas in a two-car garage."

A brand line consists of all products original as well as line and category extensions- ■ sold under ;l particular brand. A brand mix (or brand assort nflpitl is the set of all brand lines that a particular seller makes available lo buyers. Many companies are now introducing branded valiants, which are specific brand lines supplied lu specific retailers or distribution channel, they result from the pressure retailers put nil manufacturers lo provide distinctive offerings. A camera company may supply ils low-end cameras to mass merchandisers while limiting its higher-priced items to specialty camera shops. Valentino may design and supply different Sines of suits and jackets to different department stores.'"

A licensed product is one whose brand nil mo has been licensed Lo other manufacturers wlit)actually make the product. Corporations have seined on licensing to push the company name and image across a wide range of products—from bedding to shoos—making it a S35 billion business.11 Jeep's licensing program added up to $400 million in global sales in 2002 and included everything from strollers (built for a father's longer amis) to apparel (ivith teflon in the denim)—as long they fit the brand's positioning of "Life-Without I imits,"'^

Branding Decision: To Brand or Not to Brand?

The first branding strategy decision is whether tn developabrand name lor a product. Today, branding Is such a strong force that hardly anything noes unbratided. So-called commodities do not have to remain commodities. A cammdrffQ'ltra product presumably !»basic that it cannot be physicalk1 differentiated in the minds of consumers. Over flic years, a number of prod Licts that at one time were seen as essentially com moth tics have become lughlv differentiated as strong brands have emerged in the category/'1 Some notable examples (with brand pioneers in parentheses) are: coffee (Mijovell House), bnth soap (Ivory], flntir (Gold Medal], beer (Bydweiser), oattneal (Quaker), pickles (Misic), bananas (Chicpiita), pineapples (l>ote), a ltd even salt (Morion),

Assuming a firtn tleeides to brand its products or services, it must then Choose which brand names to use. l-our general strategies are often used;

Individual names. I his policy is folltmied by General Mills (liisquiek. Gold Medal flour. Nature Valley granola barsj Old El l^so Mexican Tootls, Pop Secret popcorn, Whea ties cereal, and lop I ail yogurt). A major advantage of an individual -names strategy is that the company does not tie its reputation to the product's, if the product fails or appears to have low quality, the company's name or image is not hup. Companies often use different brand names for different quality lines within the same product class. Delta branded Its low-fare air carrier Song in pan to protect lhe equity of its Delta Airlines biand.SJ

a Blanket family names. This policy is followed by lleinz and General Elcctric. A blanket family name also has advantages* Development cost is less because there is no need for "name" research or heavy advertising expenditures to create brand-name recognition. Furthermore, sales of the new product are likely to be strong if (he niaiiufacttirer's name is good. Campbell's Introduces new sou;is under its brand name with extreme simplicity and achieves instant recognition.

a Separate family names for ali products- I his |H)ticy is followed t>y Sears [VcnmotC for appliances, Craftsman for tools, and Ho mart lor major home in si ¡illations). If a Company produces quite different products, il is not desirable to use one blanket family name. Swift and Company developed separate family names for its hams (Premium) and fertilizers (Vigoro).

u Corporate name cnndiim'd u<itli individual product names. Ill is sub-branding policy is followed by Kellogg (Kellogg's Rice fcrispies, Kellogg's flaisin Bran, and KcHogg's Corn Flakes), ii^ well as 1 tonda, Sony, and 11 ewlcn-Packard, t he company name legitimizes, and the individual Uame individualizes, the new product.

The first two Strategies arc sometimes referred to as a "house of brands" and a "bratitled house," respectively, and ran he seen as representing two ends of a brand relationship continuum, with the latter two strategies as being in between and com hi nations of the two. Although firms rarely adopt a pine example of any of the four strategics, dec id it ig which general strategy to emphasize depends on several factors, as evidenced by T^blc 9,3,

Two key eomponetils nf virtually imy branding strategy are brand extensions and brand portfolios.

Brand Extensions

Recognizing that one of their most valuable assets is their brands, many firms have decided to leverage that ass el by introducing a host of new products under some of their si rongest brand names* Most new products are in fati lino extensions typically ft() to Ht>% in any one year. Moreover, many of the most successful new products, as rated by various sources, are extensions (e.g., Microsoft fihox video gantc system, Apple iPod digital music player, and \"okia 6800 Ciill phone). Nevertheless, many new products are introduced each vearas new brands (e.g., Zyprexa mood stabilizer drug, TiVo digital video recorders, and Mini automobile).

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  • dana
    How does a company devise a brand strategy?
    8 years ago

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