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Branding strategy

Branding strategy

As consumers, we tend to prefer certain brands over others. Brand preferences may come from something simple like a chocolate tasting better or a service offering more benefits than its competitors. However, strong brands often stand out because of the emotional relationships they build with customers. For instance, we may be partial to Disney because it reminds us of our childhood. Thus, one of the most important business objectives is to build and maintain emotional connections with the target audience. But how can this be done? Through a solid, well-thought-out branding strategy.

Branding Strategy Meaning

To understand how to build strong brands, we must first look at the meaning of brand strategy.

A branding strategy is a plan that outlines how an organization will deliver value to consumers through its brand.

Branding strategy is concerned with building a strong brand. There are a variety of decisions marketers have to make when developing a brand strategy, including:

Through its branding strategy, an origination differentiates its product from competitors and creates positive customer perceptions and associations regarding the brand. The objective of branding is to develop long-term emotional connections with customers.

Importance of Brand Strategy

Let's now shift our attention to the importance of brand strategy. What role do brands play for customers and organizations? Here are three critical roles that brands play:

  1. Intellectual property protection - the legal recognition of a trademark is important as it allows companies to differentiate their brands without the risk of competitors copying their logos, designs, etc.

  2. Quality guarantee - brands take responsibility for guaranteeing the product quality and features marketed to customers.

  3. Personal benefits - branding is essential as it helps create an emotional attachment to the product/brand in customers' eyes.

Brands can bring a variety of benefits to customers, including tangible, intangible, functional, and psychological benefits. Ultimately, a brand's objective is to foster an emotional attachment with customers - creating positive and high-value brand associations - as competitors can easily copy the other benefits they might offer.

Many gym companies can manufacture high-quality stationary exercise bikes but the Peloton brand retains a special place in consumers' hearts as the brand successfully creates a community of like-minded users and instructors trying to stay healthy and fit.5

Branding Strategy in Marketing

A branding strategy in marketing goes beyond having a recognizable logo and a positive brand image. It aims to create a relationship with customers and improve their perceptions and attitudes towards a product or service. To do so, companies have to follow three key principles:

  • Brand vision - to develop a strong brand, the brand must establish and communicate its vision to its target audience. To this, the brand first has to establish:

    • Purpose: What does the brand bring to its target audience/society?

    • Future: Where do we see the brand going in the future?

    • Values: How does the brand behave? How should the brand behave?

  • Brand authenticity - a brand must stay true to its vision and purpose to build authenticity in the eyes of consumers. Brands need to align external messages with their brand promise and internal capabilities. If a brand fails to deliver on its promise, it risks losing its authenticity.

Chipotle claims to make all of its dishes with freshly sourced, real ingredients. In 2015-16, dozens of people in the US were infected with E. coli after eating Chipotle. A UBS Evidence Lab survey conducted in 2018 found that 26% of respondents claimed they were avoiding Chipotle due to food safety concerns, with 32% claiming that nothing would convince them to visit the restaurant chain more often.1 The Chipotle incident shows how easily brands can lose their authenticity for an extended period when they fail to deliver on a brand promise.

  • Brand connection - another vital aspect of brand success is portraying the emotional benefits the brand can provide. Customers may choose certain brands to covey their self-identity and project this identity onto others through their material possessions.

By focusing on these elements, a brand creates brand equity.

Brand equity is the social value derived from customer perceptions of the brand.

Brand equity is concerned with customer preference and loyalty. A well-known brand can generate more profit simply because customers know it. When a brand has positive brand equity, customers react to its product more favorably than to similar undifferentiated products.

It is easy to mistake brand equity for brand value. Brand value is the total financial worth of a brand, whereas brand equity is concerned with customers' perception of a brand.

Types of Branding Strategy

Let's now focus on the types of branding strategies. To form a brand strategy, marketers have to make various brand decisions.

Brand positioning strategy

Brand positioning is an essential element of the branding strategy.

Brand positioning includes deciding how to present the benefits offered by the brand relative to competitors' offerings.

Fig. 1 shows how organizations can position their brands based on three stages.

Branding strategy Brand positioning StudySmarterFig. 1 - Brand Positioning, StudySmarter Originals

  1. Positioning based on product attributes - product quality, features, design, etc.

  2. Positioning based on benefits - the benefits it brings to customers/users.

  3. Positioning based on beliefs and values - focusing on the emotional connection between the brand and consumer.

Check out our Brand Positioning explanation to learn more!

Brand name strategy

Building a solid brand name can be difficult, but it is crucial to business success. Robertson (1989) proposed that a brand name should be "simple, distinctive, meaningful, emotional, make use of morphemes, phonemes, alliteration, consonance, and should make a sound associate of product class, as well as being legally protectable".2 To put it simply, a brand name should be:

  • Easy to recognize and pronounce,

  • Extendable,

  • Translatable to different languages.

Specific brand names like Hoover, Chapstick, Bubble Wrap, or Jacuzzi have become synonymous with the product. We often use these brand names as generic, household terms.

Brand sponsorship strategy

Another vital part of branding strategy includes making sponsorship decisions. Manufacturers can typically choose from four sponsorship options:

  1. Manufacturer's brand - brands that the producer of a product owns. These brands are also referred to as national brands. For example, Apple produces, markets, and sells its products under its own brand name.
  2. Store (private) brand - a brand that the product's reseller owns. These brands are sometimes referred to as 'generic', 'own brand', or 'no-name' products. For example, By Sainsbury's produces a variety of food and household products and Boots produces its own version of Boots Paracetamol.
  3. Licensing - certain companies may want to license their trademarks, symbols, etc. The licensee gets instant access to a brand name and thus does not have to develop its own brand.
  4. Co-Branding - using two brand names on the same product. Co-branding allows both brands to benefit from each other's strengths and reach a broader range of consumers.

Brand development strategy

When it comes to brand development strategy, a brand has four strategies to choose from (see Fig. 2 below):

  1. Line extensions - extending the current brand name by introducing new flavors, sizes, etc., to the current product offering. For example, Coca-Cola introduced lemon-flavored Coca-Cola. It is a relatively low-risk strategy; however, marketers must ensure not to confuse customers by introducing too many new products. Overextension may also result in the cannibalization of existing products.
  2. Brand extensions - extending the brand name to suit a new product. Brand extensions can generate high customer acceptance as customers are already familiar with the brand. It is also cheaper for organizations to extend a brand than to develop and market a new one.
  3. Multi-brands - creating unique brand names for different products. A multi-branding strategy can be used to target various customer segments who like a product/brand for different reasons. For example, Coca-Cola has a variety of soft drink brands like Fanta or Sprite, in addition to mineral water (Smartwater) and flavored water (Vitaminwater) brands. This allows Coca-Cola to seize a more significant percentage of market share than if it was only to sell its original Coca-Cola soft drink.
  4. New brands - creating a new brand name for a new product category. A new brand name may be needed when the existing brand name is weak or does not mesh well with new product developments.

Branding strategy Brand development strategy StudySmarterFig. 2 - Brand Development Strategies, StudySmarter Originals

Branding strategy examples

Let's finally take a look at some branding strategy examples.

1. Brand Positioning

Ben & Jerry's positions its brand as one that is founded on a social and environmental mission. Ben & Jerry's brand values are centered on human rights and dignity; social and economic justice; and environmental protection, restoration, and regeneration.3 Thus, the brand positions itself using the third level of positioning - based on beliefs and values. This may evoke a positive emotion in customers as the brand is associated with something more significant than simply ice cream. The brand positioning strategy also helps build long-standing relationships with customers.

2. Brand Development/Sponsorship Strategy

Retailer John Lewis introduced its ANYDAY brand, which is positioned as a sustainable and affordable alternative to its premium products.

Our budget-conscious ANYDAY brand holds true to the John Lewis promise of quality and sustainability. 4

ANYDAY is a private brand owned by John Lewis, ranging from apparel to home goods and appliances. The company created a new brand name for the new product category (brand development). John Lewis implemented the brand development strategy to target new customer segments who look for stylish yet affordable clothing.

Before you head off, let's summarise this lesson with a few key takeaways:

Branding Strategy - Key takeaways

  • A branding strategy is a plan that outlines how an organization will deliver value to consumers through its brand.
  • Brands play a role in protecting intellectual property, guaranteeing quality, and personal/emotional benefits.
  • A brand's objective is to foster an emotional attachment with customers.
  • Brand equity is the social value derived from customer perceptions of the brand.
  • Brand positioning, name, sponsorships, and extensions make up a branding strategy.
  • Brand positioning includes deciding how to present the benefits offered by the brand relative to competitors' offerings.
  • The four key brand development strategies are line extensions, brand extensions, multi-brands, and new brands.

References

  1. Kate Taylor. People are still terrified to eat at Chipotle — and it's the chain's biggest problem. Business Insider. https://www.businessinsider.com/chipotle-hasnt-overcome-e-coli-fears-2018-3
  2. Kim Robertson. Strategically Desirable Brand Name Characteristics. Journal of Consumer Marketing. 1989.
  3. Ben & Jerry's. We believe that ice cream can change the world. 2022. https://www.benjerry.co.uk/values
  4. Helen Stone. About Anyday. John Lewis. 2022. https://www.johnlewis.com/content/home/about-anyday
  5. Jono Bacon. The Five Ways Peloton Weave Community and Content Beautifully. Forbes. 2018. https://www.forbes.com/sites/jonobacon/2018/12/06/the-five-ways-peloton-weave-community-and-content-beautifully/

Frequently Asked Questions about Branding strategy

A branding strategy is a plan that outlines how an organization will deliver value to consumers through its brand. Through its branding strategy, an origination differentiates its product from competitors and creates positive customer perceptions and associations regarding the brand.

Part of a branding strategy includes the brand name strategy. A brand name should be easy to recognize and pronounce, extendable, and translatable to different languages. For example, brand names like Hoover, Chapstick, Bubble Wrap, or Jacuzzi have become synonymous with the product. We often use these brand names as generic household terms. 

Branding strategy is concerned with building a strong brand. There are a variety of decisions marketers have to make when developing a brand strategy, including: 


  • Brand name selection/protection,  

  • Brand identity decisions, 

  • Brand positioning, 

  • Brand sponsorship, 

  • Brand development.

The benefits of a branding strategy include the fact that it is a method of intellectual property protection, it guarantees quality, and helps create an emotional attachment to the product/brand in customers' eyes.

For a successful branding strategy, marketers must establish the brand vision, convey brand authenticity, and emphasize brand connection. By focusing on these elements, a brand creates brand equity which helps shape customer preference and loyalty.

Final Branding strategy Quiz

Question

What is brand equity?

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Answer

Brand equity refers to the value consumer derive from the brand's name. It is based on consumer perceptions and experiences with the brand.

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What is customer loyalty?

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Customer loyalty refers to the extent to which customers are content with the product, have a favourable opinion of the brand, and are willing to make repeat purchases.

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What are some of the practices companies may use to increase their customer loyalty?


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Offering high-quality products, loyalty programmes, discounts, etc.

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Explain brand awareness.

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The extent to which consumers are familiar with a brand and its products.

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How can we measure brand equity?

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Brand awareness is one of the key metrics that can be used to measure brand equity. Valuable brand equity would mean that the brand is recognized by most people. 

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Question

Brands always have positive brand equity.

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Answer

True

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What happens when a company has negative brand equity?

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The brand loses customer trust, which brings the brand's value down.

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What is the importance of brand equity?

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Answer

The importance of brand equity in marketing is as follows; when consumers associate a certain degree of quality or prestige with a brand, they see the items produced by that brand as having more value than those produced by rivals. As a result, they are prepared to pay a higher price for them. This makes brand equity very important in marketing. 

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Who developed Brand Equity Model?

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Answer

Brand Equity Model was established by Kevin Lane Keller, a professor of marketing.

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What is the main idea behind Keller's Brand Equity Model?

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The reasoning that Keller used to develop this model is straightforward: to have a powerful brand, one has to generate the appropriate brand image. A positive brand image can be achieved by engineering perfect brand encounters or experiences for customers or potential customers.

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What are the four main stages of the brand equity pyramid?

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Brand Identity, Brand Meaning, Brand Response, and Brand Resonance.

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What happens during the brand identity phase of the brand equity pyramid?

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During this phase, companies pursue brand identification and awareness. Additionally, they work on guaranteeing that crucial phases of the purchasing process are characterised by positive impressions of the brand.

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Explain brand meaning.

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This step involves identifying what the brand stands for and what it means to customers.

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Explain brand response.

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Brand response is concerned with consumers' reactions to a brand, including their judgements and feelings.


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Explain brand resonance.

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Brand resonance refers to consumers' emotional connection with a particular brand.

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What is the definition of brand value?

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Brand value is defined as the monetary worth of a brand. 

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If another firm wants to utilise a company's name, logo, and brand identity to sell goods or services, what would the brand value be worth?

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Brand value would be the amount of money they would pay for the right to do so.

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Explain how replacement cost is used to estimate brand value.

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In this context, the value of a brand refers to the amount of money required to create, implement, market, and magnify a whole new brand to the same level as the existing one. 

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Is brand value an intangible asset?

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Yes, brand value is considered to be an intangible asset.

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Why is brand value considered to be an intangible asset?

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Because it has monetary value but is not a physical good. 

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What is the benefit of having a positive brand value?

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Having a positive brand reputation will increase the monetary value of a firm.

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How is brand value measured? 


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The most basic means of determining the value of a brand are still rather straightforward. One of the simplest strategies is inquiring other businesses about how much they would be willing to pay for the rights to use your brand. 

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What are some of the factors that influence brand value?

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  • High product quality, 
  • Convenience (lots of locations, easy to purchase) 
  • Compatibility with many complementary goods (the brand offers a wide range of products that can work together).

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Give an example of brand value.

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Apple's range of computer products, from the iPhone to the Macbook laptops, are intended to sync with each other easily, but not with substitutes. 

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What is brand value proposition?

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Brand value proposition refers to the value a brand offers its target consumers.

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Give an example of brand value proposition.

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A common example of a value proposition is a warranty, whereby the manufacturer promises to fix - at no charge - any problems that occur with the product for a certain length of time or amount of use. 

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What is the difference between brand equity and brand value?

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While brand value refers to the monetary worth of a brand, brand equity refers to the brand's ability to capture customer attention and preference. Brand equity also refers to consumers' impressions of the brand.

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Why is brand value important?

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Brand value is important for businesses as it aligns their values with their target customers. This helps the brand build and expand its customer base.

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Why is brand value important during a financial crisis?

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It can become a firm's most valuable asset in a financial crisis. Iconic brands with high levels of customer loyalty can maintain profitability (or simply survival) during an economic crisis.

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Explain how society may benefit from brand value.

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Producers will focus on product quality and customer service because they know it enhances brand value, improving the output produced. By focusing on brand value, firms also improve society by delivering better goods and services. 

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What is a branding strategy?

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Answer

A branding strategy is a plan that outlines how an organisation will deliver value to consumers through its brand.

Show question

Question

The objective of branding is to develop long-term _______ connections with customers.


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Answer

emotional

Show question

Question

Through its branding strategy, an origination differentiates its product from competitors and creates certain associations with the brand.

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Answer

True

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Question

What role do brands play for customers and organisations? 


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Answer

Personal benefits, quality guarantee, protecting intellectual property.

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Question

Brands do not take responsibility for guaranteeing the product quality and features marketed to customers.


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False

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Brands can bring a variety of benefits to customers, including tangible, intangible, ________, and ________ benefits.

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Answer

Brands can bring a variety of benefits to customers, including tangible, intangible, functional, and psychological benefits.

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Why do brands try to foster emotional connections with customers?

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Answer

Competitors can easily copy the other benefits they might offer. 

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A branding strategy in marketing goes beyond having a recognisable logo and a positive brand image.


Show answer

Answer

True

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To communicate its brand vision, a brand has to establish its:

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Answer

Purpose

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Brands need to align external messages with their ________ and _________.

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Answer

Brands need to align external messages with their brand promise and internal capabilities.

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If a brand fails to deliver on its promise, it risks losing its authenticity. 


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Answer

True

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What is brand equity?

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Answer

Brand equity is the social value derived from customer perceptions of the brand.

Show question

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Brand equity is concerned with brand image and value.


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Answer

False

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What is brand positioning?

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Answer

Brand positioning includes deciding how to present the benefits offered by the brand relative to competitors' offerings. 

Show question

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Brand positioning can be based on:

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Answer

Attributes

Show question

Question

These brands are sometimes referred to as 'generic', 'own brand', or 'no-name'.


Show answer

Answer

Private brands

Show question

Question

Co-branding allows both brands to benefit from each other's strategies and finances.


Show answer

Answer

False

Show question

Question

Extending the current brand name by introducing new flavours, sizes, etc., is known as:


Show answer

Answer

Line extension

Show question

Question

A _________ strategy can be used to target various customer segments who like a product/brand for different reasons. 


Show answer

Answer

multi-branding

Show question

Question

___________ involves extending the brand name to suit a new product. 

Show answer

Answer

A brand extension strategy

Show question

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