Building Brand Equity

by Dr. Ranjan Madanayake
DBA, CPM, FSPMgt, FSBP, MCInstM, RPM, MMA, MNZIM, MIM (SL), MSLIM, CPM

(Continued from last week)

To create sustainable brand equity and high brand value we need strategic direction to achieve the three most important components for a brand:

*Brand Loyalty: Continuous purchase of the brand by its target market
*Brand Advocacy: Recommending to others, goodness and use of the brand
*Brand Sustainability: Continue to sustain market share amidst competition

To achieve the above I wish to propose the ‘brand equity building triangle’.

Take in Mahil's 'art work'

Brand audit

The starting point of the brand equity building process is a brand audit

• Its purpose is to assess the financial health of the brand, discover its sources of equity and suggest ways to improve and leverage that equity

• It includes brand vision, mission, promise, values, position, personality, and performance

Brand audit steps:

• Brand inventory (firm perspective)
• Brand exploratory (market perspective)

Brand Inventory addresses the following:

• A current comprehensive profile of how all the products and services sold by the company are branded and marketed: Brand elements, Supporting marketing programmes, Profile of competitive brands, POPs and PODs and the most important brand mantra

• Determining bases for positioning the brand
• Developing insights to manage brand equity best

• Assessing consistency in message among activities, brand extensions and sub-brands to avoid overlaps, redundancies and consumer confusion brand exploratory addresses the following:

• Provides detailed information as to how consumers perceive the brand such as, brand awareness, favourability and uniqueness of associations

• Helps identify sources of customer-based brand equity
• Uncovers knowledge structures for the core brand and its competitors

Once armed with the brand audit the marketing planners will have enough marketing and market insight to analyse the situation and determine key issues and make intelligent assumptions. By these initiatives they can then determine target markets so that they can differentiate and position an appropriate value proposition.

Differentiation

Porter (1985) asserts that a company’s strategy is robust when it has strong points of difference from their competitors. Two important components need to be addressed when searching for a sustainable differentiation.

Points-of-parity associations (POPs):

• They are attributes of the brand that are shared with other brands Points-of-difference (PODs):

• They are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe that they could not find them in other competitive brands

But differentiation doesn’t mean that we should do so for the sake of differentiation, but it must be done only if the target market desires so, lest it would be in the predicament that Coke experienced many years ago.

The elements of a value proposition that can be differentiated are:

• Product: Form, features, performance, conformance, durability, style, design
• Services: Ordering ease, installation, customer training, maintenance and repair
• Personnel: Competence, courtesy, credibility, reliability, responsiveness
• Channel: Coverage, expertise, performance
• Image: Symbols, media, atmosphere, events

A well differentiated value proposition will provide a strong competitive advantage for a brand.

Positioning

Positioning is believed to be the heart of marketing strategy, without which a brand will not survive. “Positioning is the act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s minds” (Kotler et al 2012).

Some years ago Nestle in Sri Lanka ascertained that their competitive brand Horlicks malted milk was positioned as a convalescents’ drink while Nestomalt, a brand of theirs also a malted milk suffered the same fate.

Nestle realising this decided to re-position the brand as they realised that malted milk was an energy drink rather than a convalescents’ drink. The strategy worked and they built a fortune.

Types of positioning:

• Corporate Positioning: Positioning the company favourably in the minds of target market to gain recognition, image and respect

• Product Positioning: Positioning the product or service so that it will portray its unique attributes and benefits to the target market

• Competitive positioning: Positioning the value proposition in a manner it will project its unique and distinct value over and above its competitors

All of the above when carried out effectively will then influence the most important outcome: Market Positioning or how the target market positions the value proposition.

Value proposition

In planning the value proposition one important aspect must be addressed as an imperative and that is, the planning team must ensure differentiation and positioning is retained in all its initiatives. If not it will be just like one without a back bone. The vehicle that carries the value proposition is the product, service or idea. The tactical components of the marketing process or the elements of the marketing mix will ensure the delivery of superior value. They are:

• Product, Price, Place, Promote, People, Process and Physical Evidence

The next level

Once the strategic level of differentiating and positioning is achieved we must then move to a more tactical phase as above and also to drive:

• Brand Image
• Brand Identity
• Brand Integrity

This is where we need to use our differentiation of the value proposition to drive Brand Image, just as the Fonterra brand's claim that Anchor brand full cream milk powder has Pedia Pro in it. We can thereafter use its positioning of the value proposition to create a brand image unique to it, just like what Anchor did with Pedia Pro stating that it helps mental development. Finally, we must use our differentiation and positioning to drive brand integrity, as a socially responsible, genuine and credible brand. Thus with such initiatives we will achieve the desired outcome of gaining:

• Brand Loyalty
• Brand Advocacy
• Brand Sustainability

When the above is achieved the brand will gain brand equity and consequently significant brand value.

References: Kotler, P. Keller, K. L. Koshy, A. Jha, M. (2012). Marketing Management, A South Asia Perspective. 13th ed, Dorling Kindersley India (Private) Limited, India. Porter, M. E. (1985). Competitive Advantage, Creating and Sustaining Superior Performance. Free Press. UK. The writer is a Marketing and Management Consultant at East West Marketing (Private) Limited and Managing Director of Phoenix Business School. He has authored several books on the subject of Marketing.

Concluded