Branding. concepts and practical use for creating sustainable competitive advantage. mario samuel camacho compressed

2017
BRANDING
CONCEPTS AND PRACTICAL USE
FOR CREATING SUSTAINABLE
COMPETITIVE ADVANTAGE

1. INTRODUCTION 6
PART ONE
2. CONCEPTS OF BRANDING 9
PART TWO
3. BRANDING FOR CREATING SUSTAINABLE
COMPETITIVE ADVANTAGE
12
3.1. BRAND EQUITY OR VALUE 13
3.2. BRAND POSITIONING 14
3.3. BRAND ARCHITECTURE 15
3.4. BRAND PERSONALITY 16
PART THREE
4. ANALYSIS OF TWO PUBLISHED MARKETING
ARTICLES
18
4.1. ARTICLE A. “CHINA'S HUAWEI 'GROWING UP'
TO BECOME THE WORLD'S NO. 1 SMARTPHONE
19
BRANDING: Concepts and practical use for creating sustainable competitive advantage III
LIST OF CONTENT

BRAND”
4.1.1. PRODUCT DIFFERENTIATION 19
4.1.2. ADVERTISING 20
4.1.3. BRANDING 20
4.2. ARTICLE B. “L’ORÉAL TARGETS MEN FOR THE FIRST
TIME AS IT EVOLVES STRAPLINE TO EMBRACE
DIVERSITY”
22
4.2.1. MARKET RESEARCH 22
4.2.2. SEGMENTATION 23
4.2.3. POSITIONING 23
4.2.4. TARGETING 24
5. CONCLUSIONS 25
6. REFERENCES 27
7. APPENDICES 31
BRANDING: Concepts and practical use for creating sustainable competitive advantage IV

FIGURE 1. Summary 1 19
FIGURE 2. Summary 2 23
BRANDING: Concepts and practical use for creating sustainable competitive advantage V
LIST OF FIGURES

The present report aims to critically discuss
the concepts of branding, reviewing the
principal perspectives and contrasting them
to synthesise branding understanding in just
one term to reach theoretical conclusions.
Secondly, it will be considered the use of
branding for creating sustainable
competitive advantage in firms, exploring the
definition of sustainable competitive
advantage and then, analysing diverse
marketing concepts to explain the role of
branding in creating sustainable competitive
advantage.
Later, the third part of the report focuses on
studying branding in practice by analysing
two marketing articles, one called “China's
Huawei 'Growing Up' To Become The
World's No. 1 Smartphone Brand” and the
second one is called “L’Oréal targets men for
the first time as it evolves strapline to
embrace diversity”.
In both articles, it will be analysed different
aspects of marketing that takes part of the
reading content.
Therefore, the report will divided in two parts,
examining first “China's Huawei 'Growing Up'
To Become The World's No. 1 Smartphone
Brand” and its content related to product
differentiation, advertising and branding.
BRANDING: Concepts and practical use for creating sustainable competitive advantage 6
INTRODUCTION1

In summary, branding will be discussed
under different perspectives to achieve solid
conclusions and show the theoretical
diversity in this subject and it will be shown
the practical application of branding for
creating sustainable competitive advantage
in firms.
Finally, it is noteworthy that the report
presents some limitations as the marketing
literature about branding is vast and the
reports only aim at developing the
aforementioned subjects in an exploratory
way.

Initially, a brand is the identity of a product or
service and it can take many forms such as
a sign, a name, a slogan or a symbol
(Walters and Jackson, 2014: 5).
Likewise, branding is promoting a brand to
make known its basic elements like the
name, the aesthetic factors (graphic
elements), and the value proposition
(slogans, logo, symbols, messages, etc.)
(Walters and Jackson, 2014: 7).
In effect, in companies everything is
branding because branding is “a fact of life:
once there is a brand there is branding”
(Salamed, 2010: 28).
Thus, the promotion of the brand is crucial
for firms, and as the report focuses on the
diversity of concepts of branding, it is
essential to review some of the most
important definitions of branding.
Hestad (2013:11) defines branding as the
image of the firm created to differentiate itself
from competitors, conveying a vision, a story
and a philosophy in order to be recognised by
customers.
Similar to Hestad, Dibb et al (2012: 317) state
that branding is the process of creating a
brand image with sufficient differentiation to
persuade customers to purchase the firm's
products.
As can be seen, branding from these
perspectives is perceived as a promotion of
the philosophy of the company and it
illustrates the fact that providing a remarkable
and differentiated image of the brand to
CONCEPTS OF BRANDING2

customers are the key to be successful.
Nevertheless, these concepts, even if they
do synthesise what branding is, do not show
the complete picture of branding as they
forget to highlight other characteristics of
branding like the uniqueness of service and
products.
Concerning this, Knox and Bickerton (2003:
1013) argue that branding is the verbal,
behavioural and visual expression of an
organization’s business model uniqueness.
Additionally, there are branding concepts
focused on the responsibility of the whole
organisation in branding to create the
preference for the firm's products in the
minds of customers, based on improving
products and service to differentiate from
rivals.
However, it is noteworthy that these
definitions are particularly focused on
precise features of branding and they lack
the general vision that the former concepts
showed.
Notably, Nilson (2000: 6) affirms that
branding is a process that includes all
departments of a company to impact the
products and services provided in order to
be considered by customers.
Analogous to Nilson's definition, Kapferer
(2008: 20) refers to branding as the process
whereby organisations transform products or
services such that they are preferred by
consumers.
Besides, Kotler and Pfoertsch (2006: 3)
remark that branding is taking a significant
feature of the company and improving that
feature to make it more valuable.
In contrast, there is a vision of branding as a
promotion tool of the organisational culture
and reputation.
On this subject, Hatch and Schultz (2008: 61,
as cited in Sheikh, 2012:13) define branding
as the process of keeping the brand's
corporate perceptions (especially, vision and
organizational culture) integrated for all
stakeholders, including customers.
Also, Maathuis (1999, as cited in Williams,
2012: 8) considers branding as a process
“being used to build reputation by sending
signals to stakeholders”.
Thus, there are multiple manners to define
branding as it is an evolving concept.
In fact, it was considered only the most
important concepts and there are many more
terms to explore in branding.
In any case, the conceptual foundation of
branding presented above, demonstrate that
the idea of branding keeps evolving to more
complex processes (Walters and Jackson,
2014: 5) and the points of view regarding this
subject are wide.
Therefore, based on the multiple terms of branding previously discussed, to summarise the
branding understanding and one solid term, it is concluded that branding is the process of
promoting differentiated organisational values to be clearly recognised by customers
(through visual, verbal and behavioural expressions), which, comprise the
organisation's vision, philosophy, stories, images, etc; in order to show the firm's
uniqueness, differentiate itself from rivals and gain a reputation based on high quality
service and products.

First of all, it is essential to explain what
sustainable means in the definition of
sustainable competitive advantage.
On this subject, Zwilling (2010) considers
that the word sustainable refers to the
capacity of being maintained in the long term
and not weaken by the actions of market
rivals.
Later, sustainable competitive advantage, for
authors like Gunther (2013), means “to
compete in a way that others can’t imitate”
and other authors, like Chekwa et al (2015:
61), point out that sustainable competitive
advantage is reaching a point, in which, a
company is capable of creating more
economic value than competitors.
In essence, these concepts, briefly, define
what sustainable competitive advantage is,
but there are definitions that discuss
sustainable competitive advantage in more
depth.
In this regard, Dibb et al (2012: 789) argue
that competitive advantage is “the
achievement of superior performance”
compared to rivals, through distinctive and
differentiated brand identity”, usually by
BRANDING FOR CREATING SUSTAINABLE
COMPETITIVE ADVANTAGE3

“providing customer value and achieving the
lowest delivered cost” or by concentrating on
scoped products for being viewed as a
specialist in a specific industry.
In short, sustainable competitive advantage
(as branding), have diverse perspectives to
be understood, but most of the concepts
remark that it is a long-term characteristic
that allows a firm to perform at a higher level
than its market rivals, caused by factors like
high volume production, strong research and
innovation, low pricing, superior product and
services, and especially, brand popularity or
reputation.
Regarding brand reputation, it can be a
sustained competitive advantage if the
company is able to position itself in the
customer's minds, through the association of
the firm's name with emotional benefits as
the relationship between customers and
brands is defined by how people respect and
love brands (Roberts, 2004, as cited in
Hestad, 2013:12).
To illustrate this point, Hello kitty is a brand
that possesses a strong emotional
connection with young people and this is the
basis of its strong position in the market
(Hestad, 2013:13).
Indeed, when a company creates an
emotional bond, they also create the
opportunity to exploit the brand and Hello
Kitty was the best communicator of the firm
Sanrio (Hestad, 2013:13).
To further illustrate this point, Tesla utilises
“technology to create emotional product
experiences that customers then want to
share with others” (Bech, 2015) and
customers link the brand with the emotional
sensations Tesla delivers.
As has been shown in these couple of exam-
ples, branding as a sustainable competitive
advantage is created by the firm's clear diffe-
rentiation from competitors, good reputation
(created with positive emotions) and the
emotional bond the firm is able to create in
customers.
Having considered this, branding for creating
sustainable competitive advantage can be
explained in further detail, analysing
concepts like brand value, brand positioning,
brand architecture and brand personality.
3.1. BRAND EQUITY OR VALUE
Generally speaking, “brand equity is the
value of the brand in the marketplace” and
the higher the brand equity, the better the
ability to be easily recognised (Pullig, 2008:
1).
In addition, it is “the added value endowed
on products and services” and it is reflected
in the way consumers act and feel about the
brand (Kotler and Keller, 2012: 243).
By the way, brand value may be also
reflected in the product´s prices (Kotler and
Keller, 2012: 243).
Indeed, a high value means that customers
would be willing to pay more for the brand’s
products because customers feel they are
receiving a high-quality service or product
from a trusted brand (Pullig, 2008: 1).
Therefore, having a high brand equity is the
most valuable intangible asset for a brand
and it is translated as an extraordinary
sustainable competitive advantage.
As an illustration, Ikea has a high sustainable
competitive advantage caused by the
differentiation of its brand and emotional

commitment to their “ready-to-assemble”
model creates on customers (Porter, 2012:
7).
In fact, Ikea business is founded on easy to
ship and innovative furniture designs, a wide
range of styles based on self-selection, do-
it-yourself videos and assembly instructions,
child care provided in the store, among other
differentiators that makes Ikea an easy to
recognise brand.
Likewise, Facebook also enjoys a
trustworthy brand with a sustainable
competitive advantage based on
“technological capabilities, economies of
scale in its infrastructure, and most
importantly, network effects” to connect
friends and families all over the world
(Dawar, 2014).
This network effect favours Facebook
because people who desire to socially
network, “it makes sense to congregate on
Facebook where everybody else is hanging
out” (Dawar, 2014).
Under these circumstances, the emotional
bond between customers and the brand is
critical for having a branding sustainable
competitive advantage.
So, the basis of a trustworthy brand is
remaining in customer's minds through high-
quality service and products that create
positive emotional responses.
As a matter of fact, “brands are emotionals”
(Hammond, 2011: 27) and creating an
emotional commitment is the basis of a
strong brand (Hammond, 2011: 32) as “brand
equity ultimately resides in the mind of the
consumer” (Pullig, 2008: 2).
3.2. BRAND POSITIONING
Brand positioning is the process of building
a company’s image and offering, to occupy
a noticeable place in the minds of the
targeted market to maximise the benefits,
showing what the company does and what
makes the company unique (Kotler and
Keller, 2012: 276).
Simultaneously, brand positioning can be
considered as the process of “establishing
key brand associations in the minds of
customers” to achieve brand differentiation
to establish “competitive superiority” (Keller
et al. 2002, as cited in Keller and Lehmann,
2005: 2).
Now, as brand value, brand positioning
relies on emotions. In this regard, marketing
experts affirm that brand positioning should
have rational and emotional elements
because “a good positioning should [...]
appeal both to the head and to the heart”
(Kotler and Keller, 2012: 290).
For instance, Whole Foods Markets created
a valuable and well-positioned brand in its
segment of healthy foods, based on
differentiation's elements such as the display
of extensive prepared foods, “café-style
seating areas with wireless internet for meals
and meetings”, nutrition information and
education provided to shoppers, strong
emphasis on environment's sustainability,
among others (Porter, 2012: 28).
Incidentally, it is positioned as one of the
favourite brands for millennials and young
shoppers (Ritson, 2015).
To further exemplify this point, Unilever’s
Bertolli, a line of Unilever specialised in
Italian food, has been experiencing “a steady
10% growth in sales” during the economic
recession, “due to its clever positioning” and

a “high-quality Italian food restaurant that
customers can eat at home” (Kotler and
Keller, 2012: 278).
In the light of this subject, Unilever's Bertolli,
have targeted “men and women with
discerning palates” and it is positioned in the
preferences of this segment, which, is
looking for more status and innovative
dishes (Kotler and Keller, 2012: 278).
In summary, if the brand is the first choice of
the targeted segment, it is well-positioned in
customers' minds.
Therefore, brand positioning is taking the
brand value to a particular segment in order
to be positioned as the preferred choice of
the targeted customers.
3.3. BRAND ARCHITECTURE
Petromilli et al. (2002: 23) define brand
architecture as the way, in which, firms
manage and organise to enter the market
with their brands.
This concept helps to introduce brand
architecture, but it does not show the
particularities of brand architecture.
On the contrary, Aaker and Joachimsthaler
(2000, as cited in Salamed, 2010: 64) refer
to brand architecture as the way a brand is
promoted in relation to other brands by the
same firm.
Thus, brand architecture makes reference to
the division of a brand in sub-brands to
enter the market under different visions and
philosophies.
Consequently, it can be a tremendous
increase of the brand´s sustainable
competitive advantage if the sub-brands
gain a high reputation among the target
market (Salamed, 2010: 64), but, at the
same time, it can also be a disadvantage if
one of the co-brands receive a bad
reputation because the rest of the brands
may also suffer (Salamed, 2010: 64).
In effect, brand architecture permits the main
brand to enhance the differential advantage
in more ways, connecting with customers'
emotions under various names by positioning
the brand value in more than one segment.
For example, Toyota built a solid reputation
globally and gained a sustainable competitive
advantage, but Toyota has also offered
brands such as Scion or Lexus to expand to
specific segments and be respected under
different brand's names (Talay et al, 2015:
57).
Another example is the case of Procter and
Gamble, which, has important brands
associated to it, such as Gillette (which, has
a privileged position in the minds of razors'
buyers) or Head and Shoulders (which, is
also well-position as a known brand of
shampoo) and these “are examples of such
stand alone brands, each operating under a
single owner” (Aaker and Joachimsthaler,
2000, as cited in Salamed, 2010: 64).
To summarise, brand architecture makes
possible for firms to segment, increase and
diversify its sustainable competitive
advantage under different sub-brands.

3.4. BRAND PERSONALITY
As noted above, brands may be divided into
several sub-brands and gain a sustainable
competitive advantage in several segments.
Moreover, brands can have a tangible re-
presentation that shapes the uniqueness of
the firm humanising the brand.
In particular, it is defined as "the set of hu-
man characteristics associated with a
brand" (Aaker, 1997: 347).
Following this, Salamed (2010: 59) states
that brand personality is the brand's endow-
ment with human qualities, in other words,
anthropomorphising the brand to make it
more likeable in the targeted segment.
In practical terms, brand personality is a
strategy, in which, the main objective is
matching the humanised brand personality
with the customers' personality and tastes to
reinforce the sustainable competitive
advantage in a specific segment.
For instance, Ronald McDonald's is a human
version of the McDonald's brand and it is a
tailored character made to be “children
friendly" and attract families with children
(Salamed, 2010: 59).
Thus, brand personality is an interesting
manner to reinforce the sustainable
competitive advantage of the diverse brand
strategies (brand value, brand positioning and
brand architecture).
Indeed, it allows the brand to match their
customers like if the “brand were to come
alive as a person” to deliver a “picture of the
human qualities of the brand” (Kotler and
Keller, 2012: 107).

SUMMARY
Since Huawei changed its business model of selling cheap smartphones to a more
diversified marketing strategy of selling smartphones for diverse economic
segments (low income. medium income and high-income customers), it has become
a globally recognised brand. Now, Huawei is a serious contender for Apple and
Samsung as it currently has 8.3% of the smartphone market share and it is rapidly
increasing, while Samsung and Apple market share is flat or even, decreasing in the
case of Apple.
This increase Huawei's market share is caused by the quality growth in Huawei's
products and the recognition gained by the B2B associations, like the business
partnership with Leica, the German photography company, which, significantly
improved the camera design and quality.
On the other hand, the sponsorship of popular football teams like Arsenal, AC Milan,
and Paris Saint-Germain has positioned this brand in Europe and it is now
associated with high-quality products.
SUMMARY
Since Huawei changed its business model of selling cheap smartphones to a more
diversified marketing strategy of selling smartphones for diverse economic
segments (low income. medium income and high-income customers), it has become
a globally recognised brand. Now, Huawei is a serious contender for Apple and
Samsung as it currently has 8.3% of the smartphone market share and it is rapidly
increasing, while Samsung and Apple market share is flat or even, decreasing in the
case of Apple.
This increase Huawei's market share is caused by the quality growth in Huawei's
products and the recognition gained by the B2B associations, like the business
partnership with Leica, the German photography company, which, significantly
improved the camera design and quality.
On the other hand, the sponsorship of popular football teams like Arsenal, AC Milan,
and Paris Saint-Germain has positioned this brand in Europe and it is now
associated with high-quality products.
ANALYSIS OF TWO PUBLISHED
MARKETING ARTICLES
4

4.1. Article A. “China's Huawei 'Growing Up' To Become The World's No. 1
Smartphone Brand”
4.1.1. PRODUCT DIFFERENTIATION
Product differentiation is conceptualised as
the distinguishing factors of services and
goods of one seller from its competitors with
the purpose of leading buyers to a
preference for the brand (Chamberlin, 1965,
as cited in Dickson and Ginter, 1987: 2).
To contrast concepts, Dickson and Ginter
(1987: 2) remark that product differentiation
is made by the unique qualities of a product,
which, makes it more attractive or superior to
the competitor´s products in an attempt to
adapt them to the taste and needs of diverse
buyers.
As a consequence, both perspectives
emphasise that the brand should alter the
physical and non physical aspect (like the
stories related to the product) of the product
to make it unique in the market to facilitate
its recognition and differentiation by
customers.
Then, in the article, it mentions that Huawei
produces affordable smartphone of high
quality, associated with successful celebrities
like Messi or Lewandowski and it possesses
the same functions of Apple or Samsung's
smartphones, but what makes it unique is
that it is less expensive than competitors and
this is the cause it is gaining a bigger share
in the smartphone market, especially, in
Europe.
Indeed, “Huawei once found their niche
selling handsets cheaper than the big brands
of the world”, but now the competitive prices
are also combined with high-quality products
(Shepard, 2016) and it makes it different to
its competitors Apple and Samsung.
To further illustrate this point, the reading
points out that Huawei is now a “serious
contender for Apple and Samsung” with an
8.3 percent market share and the principal
characteristic of its products is the high-
quality and affordable prices, which, is a
competitive advantage for Huawei (Shepard,
2016).
In effect, price has always been low in
Huawei products according to the article and
when it increased the quality of its products, it
made its brand known as an affordable great
products, which, differentiates itself from
expensive high-quality products of Apple and
Samsung, making the Huawei brand a
unique product in the smartphone market
today.
On the other side, another differentiator
highlighted in the reading is the use of
Leica's technology in their smartphones'
cameras, which, makes Huawei excel in
camera phones (Shepard, 2016).
Similarly, it is “currently working with
Swarovski to design a fashionable smart-
watch for women”, which, will differentiate
even more the brand from Apple and
Samsung.
Under these circumstances, the article explicitly
made reference to various current and future
differentiators of Huawei, which, makes it
distinguishable from the competitors' offers and it
remarks that Huawei is not the same generic
unbranded product as differentiation resides in
“staying aware” of the market and “looking
continuously for gaps in market coverage that the
company can fill, of looking continuously at new
ways of influencing buyers to choose one’s
product instead of a competitor’s” (Levitt, 1980).

4.1.2. ADVERTISING
Advertising is defined by Dibb et al (2012:
514) “as a paid form of non-personal
communication, transmitted through mass
media”.
In the same manner, it is a way of facilitating
consumers buying decisions, so “advertising
is simply anything that promotes your
business” (Hoxie, 2010: 2).
For this reason, advertising is promoting the
brand's product in order to stimulate
demand through mass communication
media, such as the Internet, newspapers,
magazines, television, radio, among others
(Dibb et al, 2012: 515) and even, if both
concepts are particularly concise, they
define the main objective of advertising.
Now, relating theory to practice, the article's
story points out the importance of
advertising to promote smartphones in
important cities of Europe.
For instance, it is mentioned that “Huawei’s
dramatic rise in European sales was initiated
by an improvement in product quality but was
also complimented by a very high profile
advertising”, which, covers the main locations
of Rotterdam and down-town Brussels
(Shepard, 2016).
As a matter of fact, the article states the
details of the advertisement campaign,
which, includes “gigantic Huawei banners in
places like Berlin” or the multiple
advertisements in “the city centre of Warsaw”
that “looks like an advertising convention
where Huawei was the guest of honour”
(Shepard, 2016).
Consequently, the advertising campaign of
Huawei is connected to the advertising
theories as “advertising often serves as a
reminder for consumers to continue
purchasing the brand” (Darrat et al, 2016: 62)
and Huawei is making sure r in the main
cities of Europe as Berlin and Warsaw
always remember that the brand is there to
offer good products for less than its
competitors.
4.1.3. BRANDING
Hestad (2013: 11) defines branding as creating a firm's image to differentiate from
competitors, conveying certain meaning, a philosophy or a vision in order to be recognised by
customers.
Likewise, it can be seen as the process of creating a well-differentiated and memorable image
of the brand to persuade targeted customers to prefer their products (Dibb et al, 2012: 317).
In essence, the two concepts show different characteristic of branding, one as promoting the
philosophy and values of the company and the second definition remarks the fact of offering a
memorable image of the brand to customers, so they can differentiate the brand from
competitors.
Therefore, branding focuses on creating loyalty through the image and values of the brand.

Regarding this, the article states that the branding of Huawei is made in Europe utilising
celebrities' images and sponsoring successful football organisations.
Indeed, “the sponsorship of popular soccer teams like Paris Saint-Germain, Arsenal and AC
Milan, and, “endorsements from star European athletes like Lionel Messi and Robert
Lewandowski” (Shepard, 2016).
In other words, Huawei utilise the images of famous sport clubs and athletes to make
potential customer associate the brand with successful organisations and sport celebrities
and they explode that idea as a key of its branding campaign.
“Basically, Huawei figured out what Europeans like and stuck their logo on it” (Shepard,
2016), creating “a reputation, a mark of trust” with a compelling corporate image that
strategically addresses the target customers needs (Gronlund, 2013: 3).
To summarise, the branding strategy of Huawei described in the reading is comparable to the
theory of branding.
According to Gronlund (2013: 4) a branding strategy is expected to shape a brand image,
providing “impressions of what the brand looks like” for customers or the brand character and
reputation, which, are related to the emotions the targets perceive from the brand and how
the reputation of the brand is interpreted; and definitely, the use of an exploitation of an image
of success and utilising celebrities, delivers emotions of success and familiarity to customers
and it shapes what they perceive about the brand.

4.2. ARTICLE B. “L’Oréal targets men for the first time as it evolves strapline to
embrace diversity”.
4.2.1. MARKET RESEARCH
Market research is the process of obtaining,
interpreting, analysing and informing the
organisation of the opportunities that the
market offers regarding customers' needs
and tastes in order to design particular goods
or services to satisfy those needs (Dibb et al,
2012: 259).
Furthermore, it can be conceptualised as the
systematic and objective search for relevant,
information to solve any problem in the field
of marketing (Green, Tull and Albaum, 1993,
as cited in Food and Agriculture Organization
of the United Nation, 1997).
So, the two concepts focus their attention in
obtaining relevant information of the
customers and even, if the first concepts are
more conclusive in the definition, both
describe the basic approach of market
research.
Now, in the reading, the market research
element is evident as a previous study to
initiate the L'Oréal campaign when it is
mentioned that “the brand found that 61% of
women in the UK have not been able to find
their foundation match, while ethnic
minorities often end up paying 70% more for
foundation” (Gee, 2016).
In this case, it is noteworthy the market
research L'Oréal did was a complete
qualitative and quantitative study before
releasing the new campaign to fill this gap in
the cosmetic industry.
As a final point, the story of the marketing
SUMMARY
L'Oréal released a new campaign targeting men and minorities to embrace diversity
in the cosmetic market to broaden its appeal to new customer segments and
become part of their daily lives.
In fact, this campaign is innovative as it includes a man in the advertisement to show
evidence that more men are using make-up and they must be included in the world
of cosmetics and beauty.
On the other hand, L'Oréal is promoting its products to ethnic minorities, who, are
not properly represented in the specific case of foundation. So, they pay much more
to match the colour of their skins and this campaign, solves this issue as
“TrueMatch foundation will match 98% of UK skin tones of all ethnicities”.
As a final point, L'Oréal is aware that the brand has been perceived as cold and not
connecting with all customers. That's why this campaign focuses on creating a
deeper connection to the brand.
SUMMARY
L'Oréal released a new campaign targeting men and minorities to embrace diversity
in the cosmetic market to broaden its appeal to new customer segments and
become part of their daily lives.
In fact, this campaign is innovative as it includes a man in the advertisement to show
evidence that more men are using make-up and they must be included in the world
of cosmetics and beauty.
On the other hand, L'Oréal is promoting its products to ethnic minorities, who, are
not properly represented in the specific case of foundation. So, they pay much more
to match the colour of their skins and this campaign, solves this issue as
“TrueMatch foundation will match 98% of UK skin tones of all ethnicities”.
As a final point, L'Oréal is aware that the brand has been perceived as cold and not
connecting with all customers. That's why this campaign focuses on creating a
deeper connection to the brand.

campaign of L'Oréal is a good example of the
good use of the market information to
release a new product, aiming at satisfying
the needs of a customer's segment.
Indeed, the ability to use the market
information “in a meaningful way [...] leads to
enhanced organizational performance”
(Jaworski & Kohli, 1993, as cited in Keszey,
2015: 45) and better marketing campaigns.
4.2.2. SEGMENTATION
Segmentation is explained as the
identification of target markets to differentiate
segments according to their “needs, wants
and interests” (Dibb et al, 2012: 212).
Therefore, the segmentation is dividing the
customers into smaller groups to offer
precise products that satisfy their needs,
defining the variables that characterised the
segment like race and gender, which, are
essential for the segmentation of L'Oréal
mentioned in the reading.
To further analyse the segmentation
process, it will be discussed two concepts:
positioning and targeting.
4.2.3. POSITIONING
Positioning is “the act of designing the
company's offering and image to occupy a
distinctive place in the target market's mind”
(Burnett, 2003: 47).
On the other hand, it is also defined as
“arranging for a product to occupy a clear,
distinctive and desirable place relative to
competing products in the minds of target
consumers” (Kotler et al, 2005: 391) and the
“process of creating an image for a product
in the minds of target customers” (Dibb et al,
2012: 251).
Notably, all the concepts are very similar and
they focus on the perception of the brand in
the chosen segment and what makes the
brand image desirable for the targeted
customers for taking an important place in
their minds.
Following this, the article mentions that the
new campaign of L'Oréal is “featuring a man
in a cosmetics ad for the first time” (Gee,
2016), which, is sufficient to position L'Oréal
in a good place in the men segment of
customers.
In fact, as it is still innovative L'Oréal is
positioning itself as a segment leader after
guiding its marketing campaign to other
segments apart from the traditional ones in
the cosmetic and beauty industry.
Equally important, the article states that
L'Oréal is prioritising racial minorities to
reach a new segment of the population,
offering foundations specially design for
them, which, position the brand as one of
the first to do this in the UK, when
previously, L'Oreal was perceived as cold
and not associated to minorities.
Therefore, positioning theory is relevant in
the articles because it is essential in the men
segment and racial minorities segments.

4.2.4. TARGETING
Targeting is “knowing to whom and when to
market your product or service” (Cohn,
2015). Besides, it can be understood as the
group of people “for whom a company
creates and maintains a marketing mix that
specifically fits the needs and preferences of
that group” (Dibb et al, 2012: 806).
In other words, targeting means that the
promotion of the product or service to a
specific segment, not just a general
advertising for all customers as it narrows
and prioritise some groups.
Now, the reading is explicit in pointing out the
targeting strategy as it emphasises in the
importance of targeting the products to racial
minorities to match their skin colour and
include men as an unexplored segment.
That is why L'Oréal based their
advertisement of the campaign in the image
of a man and racial minorities as these
segments can relate easily to the L'Oréal
products.
In effect, targeting in the reading is linked to
the targeting's theories due to the similarity
of the L'Oréal example and what has been
said conceptually about targeting of creating
products for a specific group with special
needs and preferences.

The report has discussed the concepts of
branding under different perspectives,
which, promote diverse features of branding
and this comparison of concepts allowed a
critical discussion in this subject.
Simultaneously, it was analysed the role of
branding as a tool for creating sustainable
competitive advantage, discussing some
concepts related to sustainable competitive
advantage such as brand value, brand
positioning, brand architecture and brand
personality, providing several examples and
linking these brand strategies to each other.
Finally, it analysed two examples of
marketing through articles related to this
subject to observe marketing concepts in
the real world.
The analysis of the marketing content of the
articles established the relationship between
marketing's theories and the example of
Huawei and L'Oreal, highlighting elements
such as product differentiation or market
research and segmentation and it
demonstrated how the theory relates to the
practical marketing environment.
Considering this, after discussing the
branding concepts, it was concluded that
branding is the process of promoting
differentiated organisational values to be
clearly recognised by customers (through
visual, verbal and behavioural
expressions), which, comprise the
CONCLUSIONS5

organisation's vision, philosophy,
stories, images, etc; in order to show the
firm's uniqueness, differentiate itself
from rivals and gain a reputation based
on high-quality service and products.
Lastly, it was concluded that branding is
indeed a decisive factor of sustainable
competitive advantage because if the brand
is trustworthy, popular and offer high quality
products and services, it is expected to
establish emotional bonds with customers
and assure their loyalty, which, make the
brand more valuable.

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APPENDIX 1
China's Huawei 'Growing Up' To Become The
World's No. 1 Smartphone Brand.
May 25, 2016.
Wade Shepard.
Dumping their previous business model of flooding the planet with cheap, unbranded
cellphones, China’s Huawei has risen to become a globally recognizable brand and a serious
contender for Apple AAPL -2.60% and Samsung. Advancing rapidly into new markets
worldwide, Huawei is now the world’s number three smartphone brand, with an 8.3 percent
market share. Europe, in particular, has been receptive of Huawei, where the company is
growing at an unprecedented clip on the back of better products and a new brand image.
Rising up from humble beginnings in Shenzhen in 1987, Huawei started out as a producer of
phone switches. Growing up with the city’s nascent electronics industry, Huawei would
became the global leader in telecommunications networks by 2012 — despite a ban by the
US government and its knee-jerk ramifications.
However, where Huawei now stands to make the most waves is with its prime consumer
product: smartphones. Last year, the company sold 108 million of them — which is still far
behind Samsung and Apple, at 324 and 231 million units, respectively, but the gap is closing
fast. This year, Huawei’s trajectory is looking even steeper, as quarter one saw 28.8 million
phones sold, more than a 10 million unit year-on-year increase, while Samsung stayed flat
and Apple actually went into decline.
This new global market position was obtained through a very active initiative to drastically
increase the quality of their feature phones as well as major ad campaigns designed to let the
world know that Huawei has arrived.
Huawei once found their niche selling handsets cheaper than the big brands of the world,
reaching for low hanging fruit rather than the premium tiers soaring at the top of theonsumer
tree. My first Android device was a $100 Huawei that I picked up in 2012 in Jiangsu province.
It was mediocre but cheap — a tagline that could sum up public sentiment about the brand at
that time. But all of this has changed for Huawei.
APPENDICES7

“I went to my shop and they advised me instead of getting a Samsung maybe this Huawei is
better,” said Bogdan Goralczyk, the Polish Sinologist, author, and former ambassador. “More
and more people are starting to realize that it’s not as shit anymore, that it is not a fake
product, that it is much better than we expected. It is changing the mentality of the people;
they are starting to think, ‘China, wow, that’s impressive.’”
Huawei launched its new flagship phones, the P9 and P9 Plus, in London in April of this year.
The phones feature cutting edge duel-lens cameras, which allows in more light to improve
photo quality, a better battery, innovative biometric fingerprint technology, a Kirin 955 2.5GHz
64-bit ARM-based processor, and a high-quality aluminum body with aesthetically pleasing
and ergonomically contoured rounded corners. The phone is not only meant to function at the
highest level and to push new features into the market, but to look good too — a major
demand of the Chinese consumer in particular.
Huawei has also engaged in some very high-profile partnerships to develop some of their
new products and features. Right next to the duel lenses of the P9 is written the word “Leica,”
the name of the prominent German photography company who designed it. Huawei also
produced Google GOOGL -0.85%’s Nexus 6P and is currently working with Swarovski to
design a fashionable smartwatch for women.
Beyond China, where they are the undisputed number one smartphone brand, Huawei has
advanced aggressively into new markets, with a heightened focus on Europe, where they are
the continent’s number two Android phone and, in some markets, number two overall. A full
half of Huawei’s 100+ million handset sales and 65% of the company’s revenue last year
derived from markets outside of China, as the company’s market share rapidly rose in
countries like Germany, Italy, and Spain.
Huawei’s dramatic rise in European sales was initiated by an improvement in product quality
but was also complimented by a very high profile advertising blitz. Ads and promotions for
Huawei now cover the trams of Rotterdam, a flagship store sits in a prominent location in
downtown Brussels, entire buildings are being covered with gigantic Huawei banners in
places like Berlin and Lodz, Poland, the roadsides of major highways are speckled with
billboards for Huawei, and the city center of Warsaw looks like an advertising convention
where Huawei was the guest of honor. This campaign has also included the sponsorship of
popular soccer teams like Arsenal, AC Milan, and Paris Saint-Germain, endorsements from
star European athletes like Lionel Messi and Robert Lewandowski, as well as key product
launches in European cities. Basically, Huawei figured out what Europeans like and stuck
their logo on it.
The Chinese electronics industry has been rapidly at work shifting not only their business
models but the paradigm of how their products are perceived around the world. Following a
strong push from China’s central government for more innovation, companies big and small
have been working to establish signature products which not only represent the transition that
they themselves have gone through but also that of China.
Huawei has bought into their government’s rhetoric about innovation fully, investing $9 billion
into research development last year alone, which was far more than even Apple. The

Chinese upstart now has over 76,000 employees tasked with research and development in
21 centers around the world.
“We are discovering China very quickly, mainly by electronic devices,” said Bogdan
Goralczyk. “Previous items and goods that were coming were T-shirts, bags, and shoes that
were not so good, but this is top quality and we are starting to realize that.”
Last week I walked into an electronics shop in Tallinn, Estonia and saw that their feature rack
was an even mix of Huawei and Samsung. The salesman spoke positively of the Huawei's.
“But Huawei used to be really bad,” I commented. “Why are they so good now?”
“They’ve just grown up,” he spoke simply.
Huawei’s transition appears to be working out. The company reeled in $5.7 billion in profits
last year, a 33% year-on-year increase, is now ranked 228th on the Global Fortune 500 list,
and was recently named to Interbrand’s 100 best global brands — the first Chinese
enterprise to obtain this distinction. In two or three years Huawei aims to topple Apple and in
five years be the top smartphone brand in the world.

APPENDIX 2
L’Oréal targets men for the first time as it evolves
strapline to embrace diversity
25 August 2016
Rachel Gee
L’Oréal Paris is featuring a man in a mass market cosmetics ad for the first time, as it looks to
broaden its appeal and become part of consumers’ daily lives.
L’Oréal is featuring a man in a cosmetics ad for the first time as it focuses on a new tagline
which aims to ‘celebrate diversity’. The campaign, created by McCann London, includes
celebrities Cheryl Fernandez-Versini, Katie Piper and a list of influencers and bloggers.
L’Oréal’s first male blogger and makeup artist Gary, aka ‘The Plastic Boy’, has been chosen
to reflect the fact that more men are wearing makeup.
Speaking to Marketing Week, Adrien Koskas, general manager at L’Oréal Paris UK said: “We
are very aware that the cosmetics market is growing and that more guys are using makeup
and making makeup blogs. This campaign shows we are listening to everybody, different
characters with very different stories.”
The move comes after the brand found that 61% of women in the UK have not been able to
find their foundation match, while ethnic minorities often end up paying 70% more for
foundation. The brand’s latest campaign aims to address these issues as it claims its
TrueMatch foundation can match 98% of UK skin tones across all ethnicities.
L’Oréal has also evolved its famous ‘Because you’re worth it’ tagline for the campaign to
‘Because we’re all worth it’, something Koskas says relates to the diversity in beauty and the
fact the foundation can be used by all.
The #YoursTruly campaign will be rolled out through cinema, TV and social media. It will
launch this Sunday (28 August) at 11am on the influencers’ social media channels before
running through traditional media. Koskas believes a greater focus on influencers’ YouTube,
Twitter and Instagram platforms is important for the brand, as he says that audiences have
become “sceptical” about traditional marketing methods.
“Traditional consumers are not connecting in the same way these days. Whether that is with
TV or traditional media, they have become sceptical. We think it is much more important to
use influencers who consumers can relate to on a daily basis, in a genuine and sincere way,”

he said.
Though Koskas believes L’Oréal customers value the brand for its “quality of products and
quality of research”, he says the company has also noticed “scepticism” in regards to
audience perception of the brand, with some saying “L’Oréal is a bit cold as a brand, it is not
connecting with me” or asking “what does it have to do with my daily life?”. He says that in
order to address this L’Oréal wants to bring more warmth and to create a deeper connection
to the brand in this latest campaign.
Success will be determined through the sales that are generated, along with engagements
with the campaign and the reactions L’Oréal gets from the communities following the selected
influencers and celebrities.

Mario Samuel Camacho
Sociologist
MSc. in Business & Management
camacho16@gmail.com

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