Companies can succeed or fail based on brand awareness. A company can’t sell its product/service without first getting its name to circulate among consumers. Among awareness is its ability to help companies differentiate their product offerings from those of its competitors. Setting up an effective brand strategy isn’t always easy. Society is constantly evolving, and consumers’ attitudes are always changing. Many brands have been able to stand the test of time through implementing various strategies including, branching out through various branding methods.
To create and manage key brand assets, firms launch a variety of brand-related strategies. Knowing the options you have available is the first step in creating a winning brand strategy.
Brand OwnershipBrands can be owned by manufacturers, wholesalers, or retailers. Who owns the brand is a deciding factor in how to go about creating a branding strategy.
Manufacturer brands, which are the majority of brands marketed in America, own their brands and therefore have more control over their marketing strategy. Manufacturers can choose the appropriate market segments and position for the brands and can build the brand themselves, thereby creating their own brand equity.
Retail/Store brands develop the design and specifications for their brand and use to have to contract with manufacturers to produce the product. More so today though, retail firms are developing private-label merchandise and using this merchandise to establish a distinctive identity. Manufacturers are now more willing to accommodate the needs of retailers and develop co-brands for them.
Choosing whether to partner with a manufacturer or manufacture your own brand is a tough decision. Both sides have their perks. All we can say is do extensive research into different manufacturing companies to figure out which brand ownership strategy would be best for you.
Naming Brands and Product linesNaming a brand and product lines is one of the most crucial parts of the branding strategy. The name you chose should be readable and writable, unique, short, punchy, and memorable, and should evoke an emotion, feeling, or idea. That’s a lot to ask of a name, but they’re all essential factors.
Organizations must decide whether it wants its business name, brand name, and product name to all be the same or different. The rule we go by for brand and product names is, the more products vary in their usage or performance, the more likely it is that the firm should use individual brands. Organizations choose between family brands and individual brands.
Family Brands: Using a firm’s corporate name to brand all its product lines and products. When brands are sold under one family brand, the individual brands benefit from the overall brand awareness associated with the family name.
- Example: Kellogg’s uses its family brand name prominently on its breakfast brands (Kellogg’s Special K bars, Kellogg’s Froot Loops, Kellogg’s Pop Tarts, Kellogg’s Eggo Waffles).
Individual Brands: Using individual brand names for each of its products. This gives products individual identities that are not easily seen as being under one umbrella.
- Example: Kellogg’s also uses individual branding. Kellogg’s owns and markets Keebler, Cheese-It, Morningstar, and Famous Amos under separate names.
Tough decisions have to be made. You will never know exactly how a product will perform without first releasing it to the world. There are, once again, advantages to both sides. Through company, competitor, and consumer research, you can get a better idea of which strategy would be best for you.
Brand ExtensionCompanies often use the same brand name in a different product line. This strategy has several advantages.
- Colgate and Crest started out selling toothpaste but have since started selling toothpaste, toothbrushes, and other dental hygiene products.
- Kellogg’s has branched out from the cereal company. Its strategy of branding the corporate name into the product name has allowed it to introduce new products quicker and more easily.
- Trying Neutrogena’s brand extension, Neutrogena Wave power cleanser might encourage consumers to try Neutrogena’s core product lines of cleansers and moisturizing lotions, especially if their first experience with Neutrogena was positive.
Sometimes companies try too hard to stretch the limits of brand extension and end up creating a major fail. Fortunate for us, those companies fails are valuable lessons for us. Here are some examples of companies that were unsuccessful in their brand extension strategy:
- Cheetos Lip Balm was based on the idea that if you like Cheetos, you would want to wipe it all over your lips.
- Colgate Kitchen Entrees were microwavable frozen dinner entrees that shared the name with the famous toothpaste.
Companies must consider several factors when planning a brand extension strategy.
Co-BrandingA firm can choose to market two or more brands together on the same package, promotion, or store. Co-branding can enhance consumers’ perceptions of product quality through links between the firm’s brand and a well-known quality brand.
- Example: Yum! Brands combines two or more of its restaurant chains – A&W and Long John Silvers, Taco Bell and KFC, etc.
The co-branding strategy is designed to appeal to diverse market segments. Two companies’ markets can, however, be too different. Example: Burger King and Haagen-Dazs found their customers to be vastly different.
Brand LicensingCreating a contractual arrangement between firms whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for an agreed upon fee. This practice is common for toys, apparel, accessories, and entertainment products, such as video games. Licensing is an effective form of attracting visibility for the brand and thereby building brand equity while also generating additional revenue. One risk, however, is the dilution of a firm’s brand equity through overexposure of the brand.
RebrandingTo rebrand, companies will change their brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences. Companies often have to spend tremendous amounts of money to make tangible changes to the product and packages as well as intangible changes to the brand’s image through various forms of promotion. This strategy has high costs and risks, some of which can remake or break a brand.
Brands add value for both consumers and sellers to use to their advantage. Having a brand helps facilitate purchases, establish loyalty, protect from competition and price competition, and affect market value. Having a strong branding strategy, one that consumers will love gives a company a huge boost.
Information gathered from Grewal, Dhruv, and Michael Levy. Marketing. 5th ed., McGraw Hill Education, 2017.