Branding and business strategy

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Expenditure on brand building may be percieved as costly especially when viewed against the backdrop of the recently economic downturn. However, to unlock the potential inherent in any strategic move, …

Expenditure on brand building may be percieved as costly especially when viewed against the backdrop of the recently economic downturn. However, to unlock the potential inherent in any strategic move, business managers need to elevate the proposition through the adoption of the concept of branding.

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  • 1. BRANDING &BUSINESS STRATEGYIN THE VALUEDELIVERY PROCESSBy Bolaji OkusagaManaging Director, The Quadrant Company
  • 2. WHAT IS A BRAND? A brand is an identifiable entity that makes specific promises of value. A brand is a mixture of attributes, tangible and intangible, which creates value and influence. Brands are created for the sole purpose of redirecting consumer preferences.
  • 3. WHAT IS BRANDING? Branding is the differentiation of an entity or product from other similar entities or products in the market place using a name, symbol or colours or a combination of any of them. It is a programme designed for the creation of a positive perception and pungent differentiation which will induce a preference for the branded product above that of competition.
  • 4. WHAT DO BRANDS DO? Brands produce intangible outputs which impact the bottom-line. Such outputs include : 1. greater customer satisfaction 2. reduced price sensitivity 3. fewer customer defection 4. a greater share of customer wallet 5. more referrals 6. higher percentage of repeat business.
  • 5. ATTRIBUTES OF A BRAND A COMPELLING IDEA: this captures customers attention and commands loyalty. A RESOLUTE CORE PURPOSE: this remains the platform on which the brand concept is built. A CENTRAL ORGANISATIONAL PRINCIPLE: this helps align the brand strategy with the corporate / business strategy.
  • 6. WHAT DO BRANDS THRIVE ON? Brands thrive on the ability to differentiate. Brands, most importantly, thrive on promises and the ability of customers to verify these promises. Brands communicate their promise to the market, soliciting customer patronage. Everything the customer experience in the process of evaluation, trial, purchase and adoption is a verification of the promise.
  • 7. THE PROMISES AND VERIFICATIONS OF A BRAND Promises Verifications Media Environ- ment Corporate Behaviour literature BRAND Product Signage Advertising Service Client decision
  • 8. HOW DO BRANDS EVOLVE? (1)n BRAND AS COMMODITY: this is characterized by an excess of demand over supply, products make little effort to differentiate, emphasis is on mass production, consumer’s perception is utilitarian.n BRAND AS REFERENCE: here competitive pressure stimulates a need for differentiation, differentiation is achieved through changes in products physical attributes, consumers memory expand beyond basic product category, product branding become a heuristic devise for decision making, consumers still value brands for their utilitarian value.
  • 9. HOW DO BRANDS EVOLVE? (2) BRAND AS PERSONALITY: here differentiation through emphasis on rational / functional attributes become difficult, brands are given a personality in order to draw on emotional attributes, the use of brands therefore become a medium of self expression. BRAND AS ICON: here branding becomes a participative process between producers and consumers, consumers draw associations from the brand to boost their self identity, the more the associations a brand has, the greater its network in the consumer’s memory.
  • 10. HOW DO BRANDS EVOLVE? (3) BRAND AS COMPANY: here brand equals the company and assumes a complex posture because there are many points of contact between the consumer and the brand, this is the beginning of post-modern marketing, here consumers become more active in the brand creation process, communication of the brands attribute is no longer unidirectional, rather it flows from producers and consumers alike, this interaction strengthens the relationship between the consumer and the producer. BRAND AS POLICY: here there is an alignment of the company’s ethical, social and political stance with the brand concept, this stage draws heavily on emotion.
  • 11. WHY BRAND? In a global economy, with changing market dynamics and heightened competition, the role of the brand has become larger than being just a medium of recognition Brands now serve for business success. Company’s must produce healthy brands to stay competitive.
  • 12. WHAT IS BUSINESSSTRATEGY? Business strategy is about giving order and consistency to complexities. It is about plotting and executing sustainable superior performance over competition. It answers the question, “what business should we be in, based on competence and available resources?” Business strategy is about building differentiation through the vehicle of people, technology and ambience. It is about delivering superior value above competition and gaining a higher market mileage.
  • 13. ATTRIBUTES THAT MAKE FORSUPERIOR VALUE Functional Strategy: this focuses on such issue like functional fits such as manufacturing, engineering, marketing and finance. Institutional Strategy: this looks at the administrative fits such as organisational structure, information systems, incentive systems, strategic planning process, corporate culture and leadership style.
  • 14. WHY DEPLOY STRATEGY? Companies are expending enormous energies to reproduce the cost and quality advantages already enjoyed by market leaders. Gaining competitive advantage therefore requires thinking through a complex process. The adoption of a process which differentiates offerings and deliver superior value can only come through the deployment of strategy.
  • 15. IT’S ALL ABOUT VALUEDELIVERY Business Strategy is all about the delivery of superior value. Used Value Strategy Perceived Used Value Branding
  • 16. WHAT ARE VALUEDISCIPLINES? These are the strategic thrust for the delivery of value. These are: - Operational Excellence – Dell - Product Leadership - Nike, Nokia - Customer Intimacy - Starbucks, Body-Shop
  • 17. IT’S ALL ABOUT WINNING Companies that rose to global leadership over the years began with ambitions that were out of proportion to their resources and capabilities. But they created an obsession with winning. Strategic intent envisions a leadership position and establishes the criteria for charting the course. Honda set out to beat Ford, Canon set out to out pace Xerox in the market, Komatsu set out to encircle Caterpillar, Coca-cola set out to put Coke within arms reach of every consumer in the world. All are expressions of a strategic intent.
  • 18. BUSINESS IS WAR, STRATEGYIS THE ARSENAL? Building a competitive advantage in todays globalised market is like drawing a battle plan. - Ever wondered how the Japanese ascended in the auto-market while the European market leadership of the auto market waned?- Ever wondered how India became a force in the Software market causing American companies to out- source competence from the Indian market?- Ever wondered why China has become a major obstacle to America’s economic dominance of the world?
  • 19. THE OTHER SIDE OF THE COIN Companies that fail to innovate soon start to lose ground to innovators: e.g. IBM loss was Dells gain, Coca-Cola’s loss in the American market was Pepsi’s gain. Wal-Mart became a market leader in the U.S retail market beating competitors like K-Mart. In Business the failure of one is the gain of another.
  • 20. IF BUSINESS IS WAR ANDSTRATEGY IS THE ARSENAL THENBRANDING IS THE BULLETAccording to Shelly Lazarus , Chairman of Ogilvy & Mather: “Once the enterprise understands what the brand is all about, it gives direction to the whole enterprise. You know what products you are supposed to make and not make. You know how you are supposed to answer your telephone. You know how you’re going to package things. It gives a set of principles to an entire enterprise”.
  • 21. BRANDING AND MARKETING:WHERE DO THEY MEET? Brands and branding gives character to marketing. Competition dictates a need to create a perception in the mind of the target that there is no better product in the market than the one you are offering. Today, products are bought and not sold. Brands helps to pre-sell the product to the target. To stay competitive therefore, companies must deliver superior value by producing winning brands. If market leadership is a sign of business success, then branding is the key to sustainable growth and business consolidation.
  • 22. WHERE IS THE CONNECTION? Building a sustainable advantage in today’s globalised market, requires the linking of the brand and business strategy with the market planning and management framework of an organisation.
  • 23. HOW CAN THIS HAPPEN?
  • 24. Strategic Marketing Planning & Management FrameworkStrategicContext Environmental Marketing Mix Market Market or SituationalCompany Analysis Segmentation Targets Mission •Legal Market Market Product PromotionSWOT •Regulatory Segmentation Targets •Economic Price Place •Political Market MarketCompany •Social •Cultural Segmentation TargetsStrategy •TrendsOrg Structure Conditions & Triggers for LCMCapabilities Marketing Research Competition Industry Customers New Product Post Launch Execution Development Product Life Cycle Life Cycles Launch Outcomes Management Phase Gate Process Product Portfolio Mgmt Product Recycling Strategies
  • 25. FOOD FOR THOUGHT Of the twenty world leading brands in the Business-week brand rating, fifteen are American. Does this mean that Americans understand branding better than others? Business success is about risk-taking and innovation that produce the big idea from which big brands develop. Can a big idea ever translate to business success without its adoption of a brand concept?
  • 26. THANK YOU.