03.branding as a competitive advantage

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Brand as a Competitive advantage

Brand as a Competitive advantage

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  • 2. In strategic device, companies invest on brands considering Growth plans of organization Long term objectives Competitive advantage compared with rivals AOT - www.tharakadias.com 2
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  • 4.  Cost Driven brands thrives because actions are taken to curtail cost. Their total cost is always lower Profits could be always as equal as the average competitor. The cost leadership strategy a brand would adopt - Concentrates on features than added values E.g. 3M post it pad/Mazda/Mruti AOT - www.tharakadias.com 4
  • 5.  Economic of scale Reducing Quality More selective raw materials Introduction of new technology and streamlining the product range Dealing with only large orders Improve the production efficiency/system line the process – Garment industry Eliminating un-relevant add ups Maruti -800 AOT - www.tharakadias.com 5
  • 6.  Cost reduction in R & D (Low brands low competitive advantage) High dependency on technology advancement Marketers fails to foresee market changes, due to too much focus on cost reduction E.g. Ford and GM AOT - www.tharakadias.com 6
  • 7.  These brands offer more added benefits than the competitor at an extra cost. Companies follows total differentiation competitor strategy Value added brands successful due to functional, psychological and emotional stimulants it offers. E.g. Big Mac vs Bun AOT - www.tharakadias.com 7
  • 8. Cost leadership and value added brand leadership are two extremesscenarios on competitive advantage. There for many companies adopt middle path. (CDC – Cost driven characteristics) AOT - www.tharakadias.com 8
  • 9.  Dialog, Toyota, Maruti are few examples that adopt a value addition along with cost drive branding strategy When companies adopt this theory they can improve on following factors 01. Target segment 02. Competitive strength 03. Organization strength AOT - www.tharakadias.com 9
  • 10.  Porters value chain is a tool that managers could use to get out of dilemma by identifying the brands competitive advantage. This transforms the raw materials to profitable sale and divided in to following stages1. Inbound logistics2. Operations3. Outbound logistics4. Marketing and Sales5. Servicing AOT - www.tharakadias.com 10
  • 11. 1. Purchasing2. Technical Development3. HR4. Firms infrastructure AOT - www.tharakadias.com 11
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  • 13. Based on Porter, marketers are able to refine their strategies by considering Cost driven Value addition competitive advantagePorters 4 brand generic model explains in following ways Competitive scope – Broad or Narrow Competitive advantage – Low cost or value added AOT - www.tharakadias.com 13
  • 14.  Focus Cost – Significantly lower cost targeted at small narrow markets .(Hutch) Broad Cost – Lower price to a broader market achieved through economic of scale.(signal/sunlight) Broad differentiation – Value added to larger market/ concentrated market. Where cost and value adding strategy both implement to serve a larger segment.IBM/Voda/Dialog/Toyota) Focus differentiation – Niche market/ products, which are very much focused on a particular segment at a greater profits. (BMW/ Mercedes) AOT - www.tharakadias.com 14
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  • 19.  The core for successful brand is it offers more benefits which others cant offer E.G. Toyota/Lux A winning successful brand has characteristics other than offering benefits that competitors cant offer. AOT - www.tharakadias.com 19
  • 20.  Pretax return on investment is high Gains economies of scale Leading brands attracts quality people E.g. HSBC/Unilever Instills confidence in risk aversive consumers Profitable brands are committed to high quality AOT - www.tharakadias.com 20
  • 21.  Successful brands instill high perceived quality, invest more on R&D (Mercedes/3M) - As a result marketers can charge premium price Winning brands are memorable - Communication and branding attributes, makes brands to be memorable - Cross pen/Hilton Winning brands capitalize on environment - these brands grab the opportunity in the environment faster than the others – proactive - Toyota-Hybrid/ Philips energy saving bulbs. AOT - www.tharakadias.com 21
  • 22.  Cost of building brands- to build a brand organizations have to go through a long process. The level of good will undisclosed in balance sheet – it is so much difficult to find this How fast the organization needs to enter the market- if the company could think of a potential opportunity in the future then they could think of investing in building bards E.g. Confify group hotels were bought by LOLC Wyeth was bought over by Pfizer AOT - www.tharakadias.com 22
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  • 26.  Same product in different form- Coke-Diet coke Companion product – Eveready torches with Eveready battery Same customer franchise- Ceylinco life/VIP Expertise brands – Bajaj bikes/Three wheelers Unique benefits , attributes or features owned by the brand - Panadol tabs-syrup Distinctive taste, ingredient or component –Kraft cheese – Cheese spread AOT - www.tharakadias.com 26
  • 27. Kodak Picture Maker AdExploiting a positive deviation? AOT - www.tharakadias.com 27
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  • 31.  Brand stretching refers to the use of an established brand name for products in unrelated markets. E.g. Yamaha AOT - www.tharakadias.com 31
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