B UILDING B RAND S TRATEGY

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Strategy is an approach in consonance with the goal of the company to be achieved. The strategies are formulated for short and long run according to the goals of the company. The goals indicate what a company wants to achieve in a given environment and time frame; the strategy answers how to get there. Every business must develop a tailor-made strategy for achieving its goals. Corporate business strategies should possess three generic points on overall cost leadership, differentiation and focus. Managerial strategy in business should be to reduce the cost of production and distribution. The company cultivates the strengths that will give competitive advantage in one or more benefits. The companies seeking quality leadership must make or buy the best components, put together expertly after careful examination and so on. The company must plan all its operations with specific focus on one or more test segments in the beginning and then go for a larger operational area. The company should build strategy for the following functional areas:

• Brand segmentation

• Positioning of goods and services

• Product line

• Price

• Physical distribution and outlets

• Sales force

• Service and advertising

• Sales promotion

• Research and development, and

• Brand research

The strategy planning should be specific in different stages of the product life cycle. In launching new products at the introductory stage, the high or low levels for each functional variable such as price, promotion, distribution, product quality and other functions may be set. In the introductory stage when the product is new to the brand, it has to be backed by the attractive promotional schemes. High price of the product backed by the high promotional

strategy fetches rapid response while the low price level with high promotional strategy would help the product to penetrate the market quickly. On the contrary, if the promotional activities are low and the price of the product is high, the branding strategy will have slow skimming of the market and slow penetration strategy will have low product price as well as low promotion. Brand segmentation strategy also needs to be built by the company in the introductory stage of the product life cycle. The long-range marketing and brand expansion strategy is exhibited in Figure 4.1 .

Business Environment

Figure 4.1. Marketing Operations and Strategy – Interactive Framework.

The critical issues pertaining to long-tern brand management include 11-Ps comprising product, price, place, promotion, packaging, pace (competitive dynamics), people (sales front liners), performance, psychodynamics, posture (of firm) and proliferation (of business activities of the firm). Branding strategies of multinational companies have been swapped from profit-focus to customer-focus in the recent past, though for many companies success with customers is a far cry. The major threat to the success of a company is brand defection due to low customer value, although companies diffuse voluminous information on products and services and also provide customer services. It is important in the global business environment, where increasing competition in manufacturing, marketing and services sector thrusts new challenges on the firms to survive and sustain, companies must learn how to forge a more valuable connection with their customers and deliver unprecedented results. Managers face increasing pressure to deliver better results ahead of competition which requires a full array of management skills, from developing strategies and implementation to managing customers and in this process of business brands of high equity sustain the competition and lead the market over long run.

Many brands are built on the leading ideas used by the competitors. Clorox has recently worked with DuPont to develop a line of cleaners that contain Teflon to help repel dirt and

stains. The collaboration resulted in yet another innovative launch in March 2003, namely Clorox Bathroom Cleaner with Teflon Surface Protector, and Clorox Toilet Bowl cleaner which subsequently extended into toilet wipes. As new brands are penetrated in the market, the brand space for the existing products is narrowed and thrust of competition increases. In view of growing competition and fray of brands in the hygiene products segment the brand of SC Johnson’s Pledge wipes for furniture polishing, P&G’s Flash Antibacterial wipes for the kitchen and Reckitt Benckiser's Windolene Gloss & Shiny glass wipes are only some of the choices offered to consumers. The recent popularity of the orange scent being introduced in many surface cleaning products has also extended to wipes, with Mr Muscle Orange Action Wipes and Pledge Wood Orange Oil wipes representing key launches by SC Johnson. It has been apparent in this industry that many brands are driven by well recognized concept brands such as Pledge Grab-It Wet from SC Johnson, Swiffer Wet from PG and Dettol from Reckitt Benckiser, wet floor wipes have already repeated the success of the electrostatic version across many markets and now account for over a third of total impregnated wipe sales globally. Colgate Palmolive has also taken the wipe concept a step further by extending the traditional surface cleaning function to the dishwashing category with their revolutionary launch of disposable Palmolive Dish Wipes in the American household utility product market segment¹.

During the growth stage of the product life cycle the company will have rapid sales and the company should build effective Branding strategies to sustain the competition and establish the brand image in the market. While making the strategies for branding their goods and services in the growth stage the company should:

• Strive on improving the quality of the product

• Add new attributes to the product and improve the presentation styles

• Add new models and flanker products

• Identify new brand segments

• Identify new branding channels and enhance distribution coverage

• Pursue the productperformance advertising and give away the strategy of product -awareness advertising strategy

• Keep the prices of the goods and services low in order to attract the price -sensitive buyers

These strategies would help the company strengthen its competitive position. However, the company may face the trade-off between high brand share and the high current profit. It would be a wise business decision to look for the higher brand share as the company can make-up its current profit in the stage of maturity. Many companies usually abandon weaker products and look for diversification of the activities and functions for better profits. The Table 4.1 exhibits the branding strategies undertaken in the maturity stage of the products of the company.

1 Marzena Moglia (2004), Wipes make clean sweep, Euro Monitor International, Online edition, March 11

Table 4.1 Branding Strategies in the Maturity Stage

Brand Reformation Product Reformation Brand-mix Efforts to convert non-users efficacy and add value to the services The company should carefully determine the sales volume and fixed targets. The sales volume may be computed by multiplying the number of user with usage rate per user. The Branding strategy should also include promotional schemes for converting non-users into user stream and increase the usage rate of existing customers. The brand differentiation strategy may be built in order to improve the quality of the existing products by adding new features and attributes to it. The company should also aim at style improvement by increasing the aesthetic appeals of the product and brand. The advantage of the style strategy would reflect in conferring a unique brand identity and help in winning the loyal customers. However, a change in style usually requires discounting the old style and the company may risk in loosing customers who liked the old style. The company needs to develop strategies for all the variables of the brand-mix in favor of customers and channels. A company faces a number of tasks and decisions to handle the brand at the decline stage. Hence, the company must consider the strategy building as the prime task and consider following issues that help in effective strategy formulation:

• Identifying the weak products

• Augmenting investments to strengthen its competitive base

• Risk management and keeping optimum resource base till reenergizing a brand

• Quick harvest of investments and

• Right decision to drop the products from the product line based on its performance in the brand.

One of facts that many corporate houses realized that customer sensitive branding strategies, which generate pull effects are more powerful than profit driven push approach. It is a new strategic framework managing the "how" brand choices determine the performance of the company. The cost reduction may be in various factors like research and development, plant and machinery, product quality, size of the organization including sales force, marginal services and promotional expenditure. Harvesting is a difficult task to be executed in many conditions for the company.

It is necessary for a company to ensure that brands will grow along with the consumer preferences, technology and market demand. Canon started out as a company with a handful of employees and a burning passion. Thecompany soon became a world-renowned camera maker and is now a global multimedia corporation. Canon pioneered the world's first digital full-color copying machine has continued to introduce the latest innovations in true color reproduction and high-speed output. Small-diameter toner particles and the four-drum system are just two revolutionary advances in this arena. To stay competitive in today's fast-paced, borderless business world, the company is now stressing compatibility with the newest Windows operating systems and localization around the world for all printing conveniences.

Canon has also deployed its strengths in optical and precision technologies to create leading-edge systems and components for the broadcasting, medical, semiconductor production and related industries. Products incorporating key Canon components and technologies are leading the way for industries in the digital era. Digital cameras got into close competition in the decade beginning 2001 with continuous improvement in the technology. The consumers have to use a home printer or upload them to a photo Web site, and wait for prints in the mail, or find a specialty photo shop to send them out for processing at premium prices. Retailers are rushing to outfit their one-hour photo labs with equipment to read the images from your digital camera's memory card. Some are installing stand-alone kiosks with a dedicated printer that churns out prints instantly while stores have also self-service kiosks. In the fray of technology, Canon has launched the PowerShot S50 that combines user friendly operations, excellent picture quality, a 5-megapixel image sensor, and a great selection of features into a handy, point-and-shoot-style model. The company built its brand always on the relevance of technology and excellence of application. The name Canon has always meant photographic and broadcast television cameras with optical excellence, advanced image processing, superb performance, and the latest in technological advancements. Canon's new High Definition video camcorders are no exception. Canon with a view to establish a lead in the industry and brand race has delivered in the market a compact camcorder, Canon HR10 with high definition technology matching to the convenience of DVD output and incorporating the latest AVCHD (Advanced Video Codec High Definition) format².

It is a must for any company to do thorough environment mapping before identifying the brand segment and launching the product. Brand information on the identical and similar products, size of business of the competing companies, distribution strategy, price spread, product line and presentation patterns need to be analyzed. The kingpin of Branding is the customer and all the companies develop their strategies to compete for the customers. Hence it is necessary to evaluate the effective consumer response for the all the competing products in the Brand for any new brand entry. The companies must know that it would be risk averse to develop captive brand for a long time. The customer for any brand or product analyzes the value for money by comparing the perceived use value and perceived price of the product or service. Arthur D Little management consulting firm observes that a company will occupy one of the following six competitive positions in the target market³:

• The company will occupy the dominant position in the brand controlling the behavior of other competitors and presents wide choices of strategic options.

2 Rajagopal (2007), Canon: Striving with Competition in Global Imaging Market, International Marketing:

Global Environment, Corporate Strategy and Case Studies, Vikas Publishing, New Delhi, 76-79

3 http://www.adlittle.com

• The company enjoys the strong base by taking independent decisions regardless of the competitor’s actions and maintains the long-term relationship with the customers and its business partners.

• The company finds itself in favorable conditions to exploit the brand support and build long run strategies to intensify or expand the brand operations.

• The company performs at a sufficiently satisfactory level to warrant continuing in the business but the company does not find sufficient opportunity to improve its position.

Hence tenability is another competitive position that a company may face

• The company finds itself weak and gets unsatisfactory performance among the competitors.

• The company finds it in a position of non-viability with unsatisfactory performance and no opportunity for improvement.

It has been observed that translating the competitive strategy principles into the practice might be difficult for some companies entered afresh in the market. However, it can be achieved through structured approach and assessing the moves of the competitors. The construction of consumer matrix is an important exercise and the need to be taken up initially by analyzing a single demand segment. On building up the appropriate strategy and positioning the goods and services, the analysis can be extended to the other segments as discussed under:

Identify Segments: The identification of the segments should be made on the basis of the buyer needs and a reasonably unique buyer should be first identified. The other groups of buyers having similar needs may be segmented with the representative buyer of the unique segment. The other segments may be formulated on the same lines. The segment demarcation needs to be done carefully to avoid duplication of need bases. Such segment demarcation should be on the congruity of the buyers’ needs or perceived use value attributes.

PUV Dimensions: This segment formation should be based on the data analysis of primary survey by asking the consumers as which product attributes they prefer to assess the brand effectiveness. Upon understanding the basic needs of the consumers, the dimensions of the value perceived by the consumers may be established. The survey should also rank the major dimensions of the Perceived Use Value (PUV) of consumers by allocating proper weights.

Performance Of The Company: The performance of the company needs to be assessed in reference to its product line existing in the brands, potential products and the competing products.

Matrix Plotting: Upon analysis of the competitors, product position plotting has to be done on the matrix by combining the PUV analysis with appropriate price information.

Common Segments: The analysis of one segment may be extended across the other segments of demand. If the common critical PUV dimensions are found, developing competitive strategy would be possible by addressing the core dimensions. The multi-segment approach to the competitive strategy can be built if a few critical dimensions of PUV are found common across the products of the competitors.