What factors are important in building brand value?

Several factors are crucial in building successful brands, as illustrated in the diagram below:

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Quality is a vital ingredient of a good brand. Remember the core benefits the things consumers expect. These must be delivered well, consistently. The branded washing machine that leaks, or the training shoe that often falls apart when wet will never develop brand equity.

Research confirms that, statistically, higher quality brands achieve a higher market share and higher profitability that their inferior competitors.

Positioning is about the position a brand occupies in a market in the minds of consumers. Strong brands have a clear, often unique position in the target market.

Positioning can be achieved through several means, including brand name, image, service standards, product guarantees, packaging and the way in which it is delivered. In fact, successful positioning usually requires a combination of these things.

Repositioning

Repositioning occurs when a brand tries to change its market position to reflect a change in consumers tastes. This is often required when a brand has become tired, perhaps because its original market has matured or has gone into decline.

The repositioning of the Lucozade brand from a sweet drink for children to a leading sports drink is one example. Another would be the changing styles of entertainers with above-average longevity such as Kylie Minogue and Cliff Richard.

Communications

Communications also play a key role in building a successful brand. We suggested that brand positioning is essentially about customer perceptions with the objective to build a clearly defined position in the minds of the target audience.

All elements of the promotional mix need to be used to develop and sustain customer perceptions. Initially, the challenge is to build awareness, then to develop the brand personality and reinforce the perception.

First-mover advantage

Business strategists often talk about first-mover advantage. In terms of brand development, by first-mover they mean that it is possible for the first successful brand in a market to create a clear positioning in the minds of target customers before the competition enters the market. There is plenty of evidence to support this.

Think of some leading consumer product brands like Gillette, Coca Cola and Sellotape that, in many ways, defined the markets they operate in and continue to lead. However, being first into a market does not necessarily guarantee long-term success. Competitors drawn to the high growth and profit potential demonstrated by the market-mover will enter the market and copy the best elements of the leaders brand (a good example is the way that Body Shop developed the ethical personal care market but were soon facing stiff competition from the major high street cosmetics retailers.

Long-term perspective

This leads onto another important factor in brand-building: the need to invest in the brand over the long-term. Building customer awareness, communicating the brands message and creating customer loyalty takes time. This means that management must invest in a brand, perhaps at the expense of short-term profitability.

Internal marketing

Finally, management should ensure that the brand is marketed internally as well as externally. By this we mean that the whole business should understand the brand values and positioning. This is particularly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives.

Think of the brands that you value in the restaurant, hotel and retail sectors. It is likely that your favourite brands invest heavily in staff training so that the face-to-face contact that you have with the brand helps secure your loyalty.

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