Factors to be considered in choosing a Brand Strategy
Table of Contents
- 1 How to choose a brand strategy?
- 1.1 1. A thorough understanding of branding strategy
- 1.2 2. Market size to recoup the expenditures incurred in the initial phases of establishing a brand
- 1.3 3. Extent of competition prevailing in the market
- 1.4 4. Resources at the disposal of the firm
- 1.5 5. Product uniqueness and focus on brand’s distinctive features
How to choose a brand strategy?
Each branding strategy is driven by its own internal structure. Benefits accrue accordingly. Each strategy has its own strengths and weakness. So the choice of a branding strategy, should be guided by a systematic analysis of a brand’s strategic factors.
The following factors should be considered in choosing a brand strategy.
1. A thorough understanding of branding strategy
The choice of the strategy needs to be based on a thorough understanding of each branding strategy. One must clearly understand what a brand strategy is and what its intentions are. This presents a short profile of brand.
2. Market size to recoup the expenditures incurred in the initial phases of establishing a brand
Branding strategy is a cost intensive exercise. A high fixed cost is to be invested to attain awareness and image formation in the marketplace. A mass market is always helpful in early recoupment of the fixed cost sunk in the strategy.
When the market size is smaller and not growing, the payback period is likely to prolong. So, a branding strategy taking assistance from an established name is more desirable. Brand building cost for shared brands is lower and profits accrue early.
3. Extent of competition prevailing in the market
When competition is less, a manufacturer’s identification would be quite sufficient. Marketers are not motivated to brand the product. This was the state prevailing prior to liberalization.
Brands were merely labels to identify products. But when competition is fierce, brand building becomes primary. Established brands win customers and outdo rivals in the fray.
4. Resources at the disposal of the firm
Firms can choose between product branding, endorsing branding, and double branding depending upon the resources at their disposal. Product branding is not appropriate for resource starved firm.
Umbrella branding costs less than product branding. Nowadays firms create a common equity pool to be used and exploited by products in their portfolio.
5. Product uniqueness and focus on brand’s distinctive features
When the new product is unique in terms of benefits or attributes using a common brand name is not advisable. Customers may generalize the product on the basis of similarity and ignore its distinction. The appropriate strategy here is to follow product branding which concentrates on differentiation.