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Brand Building Strategies

Posted by Administrator On July - 10 - 2009

BrandingPRODUCT BRANDING: This is of the type one-brand one product. In terms of customer perception and information processing, the most effective way to designate a product is to give it an exclusive name, which would not be available to any other product. In the product branding strategy the brand is promoted exclusively so that it acquires its own identity and image. This way the brand is able to acquire a distinct position in the customer’s mind. The thrust is on making the brand acquire its ‘own’ set of associations and stand on its own. Product branding allows a brand achieve exclusivity and differentiation. 

It does not share other products and does not take on company associations. The company’s name takes a backseat and the product does not get benefits from the company name. The greatest advantage in this case is that a brand can be targeted accurately to a distinct target market or customers because its positioning can be precise unambiguous. Customers connect easily with product brands since what the brand represents tends to be clear.

P&G have been follower of the product branding strategy. P&G’ s into baby care, beauty care, feminine care, health care, fabric care, home care, food and beverages, etc. P&G has been an ardent follower of the product brand strategy. Its brands are stand alones; people don’t even know that they all share a common root in P&G. the company does not share a common identity. Thus, a company following product branding is better positioned to venture into unrelated areas of activity without being a subject of market scrutiny.

Another advantage is that with an identifiable brand uniquely positioned and directed at a segment, the firm is able to cover an entire market spectrum by making multiple brand entries.

The drawbacks of product brands are essentially cost based. Creating individual brand is costly exercise. Only the firms that have deep pockets and long staying power can adopt this strategy.

LINE BRANDING: This is of the type ‘One brand many products’. Sometimes a brand is launched with a distinct concept e.g. Lakme (“source of radiant beauty”) Winter Care lotion .The brand appeals to a distinct market segment who appreciate and like the brand concept. The core idea is that the brand connects with the consumer group. Now the customers do not tend to be content with the one product, which the brand offers. Rather they want additional product which go hand in hand with the brand concept or application; for example a Lakme user wants all the products which enhance beauty-beauty lotion, deep pore cleansing cream, lipsticks, nail enamel, eye make up etc.

Line branding strategy illustrates how well cultivated brand can be extended on to a host of related products under a common concept. This strategy seeks to penetrate the customer rather than penetrating the market. It seeks to fulfill all complementary needs that surround a basic need. Line brands start with a product but later extend too a whole range of complementary products. The products in the line draw their identity from the main brand. Marketing products as a line enhances the brand’s marketing power rather than selling them as an individual brand.

Colgate has a whole range of dental care products. Colgate Total, Colgate Gel, Colgate toothpowder, as well as the various toothbrushes.

BRAND EXTENSION: Brand extensions, which are a popular means of introducing new products to the marketplace, fall under the ‘One brand all products’ type of brand strategies. In a typical brand extension situation, an established brand name is applied to a new product in a category either related or unrelated, in order to capitalize on the equity of the core brand name. Consumer familiarity with the existing core brand name aids new product entry into the marketplace, and helps the brand extension to capture new market segments quickly.

Brand extensions come in two primary forms: horizontal and vertical. In a horizontal brand extension situation, an existing brand name is applied to a new product introduction in either a related product class, or in a product category completely new to the firm. A vertical brand extension, on the other hand, involves introducing a brand extension. In the same product category as the core brand, but at a different price point and quality level. In a vertical brand extension situation, a second brand name or descriptor is usually introduced alongside the core brand name, in order to demonstrate the link between the brand extension and the core brand name (e.g. Marriott Hotels, Courtyard Inn by Marriott). Although a brand extension aids in generating consumer acceptance for a new product by linking the new product with a known brand or company name, it also risks diluting the core brand image by depleting or harming the equity, which has been built up within the core brand name. An inappropriate brand extension could create damaging associations, which may be very difficult for a company to overcome. The different types of brand extensions are:

Product form extension: Product launched in a different form usually means line extension rather than brand extension. But if different product form constitutes entirely a different product category from customer behavior perspective, it would be called brand extension. For e.g. liquid milk and dried milk may not be perceived as the product category. Similarly chocolate bars and chocolate powder belong to different product categories.

Companion Product: Brand extension is in the form of companion products is perhaps the most common. The idea perhaps is to capitalize on product complementarily. The consumer may view both products jointly and hence, provide scope for launching brand extension.

Customer franchise: A marketer may extend a product range in order to meet the needs of a specific customer group. For instance, a company may launch a variety of products meant for e.g. nursery going school children. The focus here is not customer base but their diverse needs.

Company expertise: Brand extensions often come in the forms of different product category introductions using a common name but emanating from a common expertise pool. This strategy is particularly true in Japanese countries.

Brand distinction: Many brands achieve distinction in the form of a unique attribute, benefit or feature, which gets uniquely associated with the brand. In such situations the company can work backwards to launch different products, which essentially cash in on this distinction. For example, Parachute may have the expertise of coconut nourishment in customers mind over time. This would give the company Marico the opportunity to launch a variety of products exploiting this distinction.

Brand image or prestige: A brand extension may involve a foray in to unrelated product categories based on a brand’s exclusive image or prestige. Brand exclusivity or prestige bestows great extension opportunities. This is particularly true of designers and artist brands.

UMBRELLA BRANDING: This again is of the type ‘One brand all products’. An umbrella brand is a parent brand that appears on a number of products that may each have separate brand images. Firms have a short-run incentive to reduce quality and save costs, as consumers can only observe quality ex post.

Videocon’s range of home appliances – air conditioners, refrigerators, televisions, washing machines, etc. Phillips also has a whole range of home appliances under the brand name Phillips-the mixers, irons, televisions, etc.

Umbrella branding scored well on the dimension of economics. Investing in a single brand is less costly than trying to build a number of brands. By leveraging a common name across a variety of products, the brand distributes its investment. Hence umbrella branding works out to be an economical strategy. Using an umbrella brand to enter into new markets (Tata making a foray into the automobile car market) allows considerable savings. The brand bestows the new product advantages of brand awareness, associations and instant goodwill.

One first explanation for brand extensions is that umbrella branding is a form of economies of scope, as it economizes on the costs of creating a new brand. Brands have an intrinsic value (status or otherwise) and are therefore like a “public good” in the sense that the more products are sold under the same brand the greater the total value created. A different perspective on brand extensions is that, in a world where consumers are uncertain about product characteristics (due to horizontal or vertical differentiation), brands may play an informational role. Umbrella branding may reduce uncertainty about a new product’s attributes, a fact that increases value if consumers are risk averse. Considering these factors it can be said that umbrella branding is a superior strategy when there is a significant overlap between the set of buyers of each of the firm’s products. This result extends the well-known notion that brand extensions and umbrella branding are only successful if there is a good fit between the different products under the same umbrella.

The main danger associated with umbrella branding is that since many products share the common name, a debacle in one product category may influence the products because of shared identity.

ENDORSEMENT BRANDING: Endorsement branding strategy is a modified version of double branding. It makes the product brand name more significant and corporate brand name is relegated to a lesser status. The umbrella brand is made to play an indirect role of passing on certain common generic associations. It is only mentioned as an endorsement to the product brand. By and large, the brand seeks to stand on its own.

The brand gets the endorsement that it belongs to specified company.

Kit Kat gives the signal that it belongs to Nestle and Dairy Milk conveys that it belongs to Cadburys. Cinthol’s communication stresses that it is a Godrej product.

Though these brands enjoy their unique image, somewhere in the image the makers association is also a part. Endorsement branding strikes a balance between umbrella and product branding.

In case of Cadbury’s and Nestle, the brands mentioned above have their own unique position and image. Cadbury’s or Nestle support the brands to the extent that they transfer certain qualities or associations, which enhance customer’s trust. Brands are identified by their own name.

5 Responses to “Brand Building Strategies”

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