CORPORATE and product brands are some of the most valuable and critical assets that drive businesses’ competitive advantage.
The American Marketing Association (AMA) defined the term ‘brand’ in 1960 as: “A name, term, sign, symbol, or design, or a combination of them which is intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of competitors”.
Today, we look at how companies and their products can leverage competitive advantage using their brands.
There are a lot of famous global and local brands and for this article, we will exemplify a few of them.
Bata Shoe PLC was founded in 1937 and is renowned for manufacturing genuine and durable leather shoes and other products.
This inter relationship between the name Bata and the nature and characteristics of the products and services over a period of time, resides in customers minds.
Once a brand has been created, ownership moves from the company to its customers.
At such a point, consumers become loyal and have learned to value the company or product for the reasons that have been promoted, tested and proven.
When this happens, changing fundamental elements of the brand become very difficult.
On April 23, 1985, Coca-Cola caused a furore among loyal customers by releasing a reformulated version of their drink and therefore had difficulty getting its customers to accept an improvement to its product.
The company was forced to relent by re-introducing the original drink as the ‘Classic’ product.
The case in point goes to prove that brands pass ownership to customers.
This incredible loyalty is synonymous with huge market share, premium pricing and enormous profitability.
We should note that not all products and services qualify to be called brands.
To meet the test of a product being called a brand it must pass the following questions:
1. Do people use a brand name when they think about your product or service?
2. Does the product have any values attached to it that make it special and different from similar products offered by the competition?
The importance of branding cannot be over emphasised.
It is interesting to note that all products have life
cycles while brands outlive product life cycles.
In our case study, Bata shoe PLC has had several products which have since been phased out, new ones successfully introduced and yet, the brand name Bata lives on!
Brands convey a peculiar message of uniform quality, credibility, experience and valuability.
Customers do not buy products, they go for brands. We can therefore say that brand adds to a firm’s customer base, product loyalty, increase market share and consequently raises product profitability.
During difficult economic times, companies with strong brands withstand economic upheavals, due to their disposition.
It is worth noting that brands can also be effectively promoted by a cultural movement strategy.
This is a marketing model that builds brands by identifying, leading, organising and aligning this idea on the rise in culture and building a multi-platform communication around the idea so that  advocates can belong, rally, engage and bring about the change.
The pioneer of cultural movement marketing was Apple.
Additionally, in a movement strategy, brands can inspire multitudes of people to join a community and can rally people for or against something.
In contrast, products are one dimensional in a social-media-enabled world.
Most manufacturing companies operate a strong corporate brand with one name, one logo, a mono brand for all products and divisions.
This is the most cost effective of all strategies for a company with multiple products or where there are a relatively small number of customers, as is the case for many manufacturing companies.
Under the umbrella of the strong company brand, long-term success of a company is secured through product innovation.
A brand serves as a convenient courier of a reputation and good will.
It’s a lot easier to refer a buyer to Bata shop than to a “what’s the name retail shop”
Branding has a big effect on prospects too. Research has shown that familiarity induces liking.
Prospects who are familiar with your brand may easily recommend you even when they have no personal interaction with your products.
When a firm has a well-established brand, it can easily transfer the respect it has earned to a related new product, service or location and more easily win acceptance of the new introduction.
For instance, Bata shoe PLC has managed to introduce new products under the reputable brand “Bata”.
Customers too, reduce the risk of buying low quality and ‘untested products through the use of reputable brands.
A well created and managed brand has insurmountable power to leverage a firm’s product over its competitors.
Branding is both beneficial to customers and the undertaking and could inevitably reduce wasteful competitive strategies such as the undesirable price wars.
The author is the Managing Consultant at GN Grant Business Consultant, a fellow of the Association of Chartered Certified Accountants (ACCA), a Master of Business Administration (MBA) holder and a candidate for
the Herriot Watt University (Scotland) Doctor of Business
Administration (DBA)