PBL5: Brand strategy

Problem: How to create a brand strategy?

Learning objectives

1. What kind of brand strategies do exist?


1) Line extension strategy
Same brand name, different product in the same product line.
e.g. Ivory soap and Ivory shampoo

2) Brand extension strategy
Same brand name, totally unrelated product category
e.g. Virgin – initially a record label but entered into aviation, video stores, game stores business.

3) Multibrands strategy
Launch new brand into existing product category
e.g. Unilever has multibrands in the same product category of shampoos – Dove, Lux, Sunsilk

4) New brands strategy
New product with new brand
e.g. Toyota – Lexus (Luxury executive car)

2. When to outsource/not to outsource

According to Thursday Bram, when considering outsourcing, you need to look not only at the financial costs of doing the work yourself or letting someone else handle it, but also whether the task in question is part of your competitive advantage or if it’s central to your ability to create profits.

1) Advantages
– Better revenue realization and enhanced returns on investment
– Lower labor cost and increased realization of economics of scale
– Tapping in to a knowledge base for better innovation
– Frees management time, enabling companies to focus on core competencies
while not being concerned about outsourced routine activities
– Increases speed and the quality of delivery of outsourced activities
– Reduces cash outflow and optimizes resource utilization

2) Disadvantages
– Possible loss of control over a company’s business processes
– Problems related to quality and turnaround time
– Sluggish response times coupled with slow issue resolutions
– Lower than expected realization of benefits and results
– Issues pertaining to lingual accent variation
– An irate customer base coupled with enraged employee unions

3. What’s the interrelation between a brand strategy and a brand portfolio?

According to Susan Gunelius, brand strategy is a long-term plan for the development of a successful brand in order to achieve specific goals. A well-defined and executed brand strategy affects all aspects of a business and is directly connected to consumer needs, emotions, and competitive environments.

According to Tanya Robertson, brand portfolio is used to encompass all multiple different brands under one umbrella. Often, each of these brands has its own separate trademarks and operates as an individual business entity. However, for marketing purposes, a brand portfolio is used to group them all together. Brand portfolios are also used to lessen consumer confusion in regard to who owns particular brands.









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