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Brand and Branding

Chapter · January 2015


DOI: 10.1002/9781118785317.weom120161

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Tanya Sammut-Bonnici
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brand and branding developed by differentiating product attributes
such as product features, quality, selection,
Tanya Sammut-Bonnici price, and availability. Competitive brand posi-
tioning can be developed by addressing each
DEFINITION stage in the value chain from production to the
point of sale.
A brand can be defined as a set of tangible and Value chain development is based primarily on
intangible attributes designed to create aware- product innovation and market development
ness and identity, and to build the reputation of a (see Figure 1). Product innovation includes
product, service, person, place, or organization. strategic initiatives on product design and the
The holistic perspective of branding as a long- ability to introduce new product categories and
term strategy includes a wide set of activities line extensions. Market development revolves
ranging from product innovation to marketing around pricing strategy, distribution strategy,
communications. and marketing communications. Communi-
The objective of branding strategy is to create cations are designed to create a consumer
brands that are differentiated from the competi- mindset where brand awareness, associations,
tion, thereby reducing the number of substitutes and attitudes are formed. Brand names, logos,
in the marketplace. When high brand equity advertising, and product packaging constitute
is achieved through brand differentiation, the the visual component of market development.
price elasticity of demand becomes low, allowing Major competitors in the food manufacturing
the company to increase price and improve industry include Nestlé, PepsiCo, Unilever,
profitability. and Kraft. The corporations strive to improve
Branding strategies are built on the inter- their product offering giving particular atten-
dependent frameworks of competitive brand tion to the freshness of the product, health,
positioning, value chain development, and nutrition, and cost considerations. Over and
brand equity management. above, they have to differentiate their brands
Competitive brand positioning requires the within their own categories and within the wider
identification of a distinct market space and a market space. Nestlé owns 17 brand categories,
cognitive location as perceived by consumers. with 23 separate brands in the cereal category
Effective brand positioning helps strategists alone. Each brand is developed with a sepa-
determine what the brand stands for, its unique rate identity created through distinct product
selling points, how it overlaps with competing content, packaging, and product line extensions.
brands, and the value derived from the usage Pricing scales add to the distinction of high
of the brand. A competitive position is attained value and low value brands in the same cereal
through strong brand recognition, which can be category.

Product design
Pricing Distribution Marketing Competitive
and product line
strategy strategy communications brand position
innovation

Figure 1 Strategic brand development and the value chain.

Wiley Encyclopedia of Management, edited by Professor Sir Cary L Cooper.


Copyright © 2014 John Wiley & Sons, Ltd.
2 brand and branding
The concerted efforts of product development successful brands or by differentiating
and market development secure a competitive it sufficiently to attract new customers.
position for the brand, resulting in higher Hotel chains such as Marriot, Radisson,
revenues and the increase of shareholder value. and Westin engage in this type of strategy
Brand equity is the set of assets and liabilities across their advertising, product promo-
associated with a brand, such as the positive tions, and loyalty programs. Differentiation
image of Coca Cola in terms of a recreational of the brand from competing products
beverage, or its negative image in terms of health through visual imagery and marketing
and the consumption of sugar. Brand equity communications allows companies to posi-
management is becoming an important compo- tion their products in a crowded market
nent of corporate strategy. Strategists would space.
need to capitalize on the positive aspects of the • Brand protection. Much time and effort
brand and minimize liabilities through: would be dedicated to protecting the brand
through copyright and trademarks. Google
• Association and differentiation. Brand equity alone has 293 trademarks under its corporate
is built by associating the brand with other umbrella.

Rank Brand Brand value Consumer Brand Company Industry


($bil) perception revenue advertizing
rank ($bil) ($mil)
1
Apple 87.1 11 108.2 933 Technology

2
Microsoft Microsoft 54.7 1 73.7 1600 Technology

3
Coca-Cola 50.2 29 22.8 3256 Beverages

4
IBM 48.5 20 106.9 1373 Technology

5
Google 37.6 7 36.5 1544 Technology

6
Intel 32.3 6 54 2100 Technology

7
McDonald’s 37.4 85 85.9 769 Restaurants

8
General electric 33.7 49 124.7 - Diversified

9
BMW 26.3 5 73.7 - Automative

10
Cisco 26.3 15 46.1 325 Technology
CISCO

Figure 2 The world’s most powerful brands (Badenhausen, 2012).


brand and branding 3
RANKING OF GLOBAL BRANDS Bibliography

The measurement of brand equity is a combi-


nation of financial value and positive consumer Ataman, M.B., Van Heerde, H.J. and Mela, C.F. (2010)
The long-term effect of marketing strategy on brand
affinity. Some brands are financially valuable
sales. Journal of Marketing Research, 47 (5), 866–882.
in terms of revenue and profitability while
Badenhausen, K. (2012) World’s Most Powerful Brands.
others resonate with consumers. The top 100 Forbes, 2 (10), 100–115.
global brands rank the best at both metrics (see Dahlen, M., Lange, F. and Smith, T. (2010) Marketing
Figure 2). Communications: A Brand Narrative Approach, JWA,
NYSE.
FUTURE DIRECTIONS Erdem, T. and Swait, J. (2004) Brand credibility, brand
Strategies for long-term brand loyalty are devel- consideration and choice. Journal of consumer research,
oped around hybrid initiatives addressing brand 31 (1), 191–198.
image and brand experience. The trend in Fill, C. (2009) Marketing Communications: Interac-
tivity, Communities and Content, Prentice Hall,
branding strategy is to permeate brand identity
USA.
through all the functions of the firm that address
Keller, K.L. and Lehmann, D.R. (2006) Brands and
the customer and to expand on the brand expe- branding: research findings and future priorities.
rience. The focus of the brand experience is Marketing Science, 25 (6), 740–759.
moving beyond the customer’s perception of a Morgan, N.A. and Rego, L.L. (2009) Brand portfolio
brand, to the measureable metrics of customer strategy and firm performance. Journal of Marketing,
satisfaction throughout the value chain and 73 (1), 59–74.
customer retention. Schmitt, B., Zarantonello, L. and Brakus, J. (2009)
Brand experience: what is it? How is it measured?
Does it affect loyalty? Journal of Marketing, 73 (3),
See also GE matrix (competitive position attrac- 52–68.
tiveness matrix); life cycle strategy; portfolio Wheeler, A. (2009) Designing Brand Identity: An Essential
management; segmentation Guide for the Whole Branding Team, JWA, NYSE.

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