- Category: December 2013 - Brand Management
According to James Hammond, author of the international best-selling book Branding Your Business, “a brand is the total emotional experience a customer has with your company and its product or service”. He states further that a strong brand increases a company’s sales volume, besides creating awareness and introducing the product or the service that the company is offering. In addition to that it builds a long-lasting customers relationship and loyalty. Companies with powerful brands also enjoy having devoted employees who believe in the brand and are loyal to it. Not to mention that having a powerful brand is worth a huge amount of money which directly translates into the company’s balance sheet – just look at Apple, Google or Facebook as examples.
However, getting and staying on top isn’t easy and many brands run the risk of losing their relevance in dynamic markets, because customers no longer buy what the brand of their perception has to offer.
Relevance is of crucial importance and raises the big question how a brand remains relevant. The following strategies are possible:
1. Catch up with competitors
The aim of this strategy is to create an approximately equivalent alternative to the "must-have" deal of the competition, so that the brand is no longer excluded from the rivalry.
Several fast-food chains now offer, for example, salads and fruit smoothies that should be at least as good, so that the healthy eaters don’t get around the brand. Just look at McDonald that even responded with the introduction of McCafe to the threat of Starbucks. The company offers such a good coffee quality that it could keep up with Starbucks or represented at least an alternative to stay in the race.
One difficulty with this strategy is the question whether the brand is credible on the new terrain. Another lies in the implementation of the value proposition, if it is assumed that the culture, production and use of skills isn’t immediately aligned to the new offer.
2. Exceed Innovations
Instead of being satisfied with an equivalent offer, you can also try to thwart competitors with a substantial or revolutionary innovation. Nike, for instance, offers the possibility to listen to music while running and simultaneously record each workout with its Nike + shoes and iPod sensor.
This strategy challenges companies enormously as it requires substantial or even revolutionary innovations. In addition, it is extremely difficult to get established in markets with strong, fast-growing competitors, too.
Modify the brand or position it anew, so that the value proposition in a changing market is again relevant. LL Bean, for instance, an established brand for hunters, anglers, camping clothing and accessories has repositioned itself successfully as an outdoor provider in order to be relevant for lovers of other outdoor activities such as hiking, mountain biking , cross country skiing and water sports as well. What remained is the sense of awe, respect for nature and the spirit of adventure that the brand wants to emanate by only changing the perspective.
This strategy, however, will only work if the substance is sufficient to credibly represent the new positioning and convincingly implement the rebranding strategy.
4. Maintain the existing strategy
Rather than adapt, you follow the same strategy as before but constantly improve your products further and boost your brand with energy. In the 1930's the wet shaver, for example, ran the risk of being displaced by the electric shaver with its convincing advantages. However, Gillette countered with new innovations and managed to achieve solid growth that way.
What reaction is the best for a company depends on the context, so you may want to ask yourself two questions: How strong are the threat and the trend on which it is based? And how do we realistically assess our ability to innovate, develop the necessary new skills, and remain successful in the market? Both questions are not easy to answer, because they are complex, individual factors are interdependent and future development is uncertain. All the best!
By Daniela La Marca