Meaning of Brand strategy
Brand strategy relates to the long-term plan created by the brand to achieve its pre-defined set of goals. It is one that is utilized by companies for building its specific image in minds of present and potential customers. Brand strategy is a tool that conveys to people about the nature of a company and what does it do. This strategy results in developing a strong feeling about a brand among peoples which drives their buying decisions. Every business selling services to other companies whether it is small or big needs to carefully design their brand strategy. The stronger the brand equity of business is, the more strongly peoples are likely to build feelings towards them.
The brand strategy serves as a key source that facilitates the business organization in attaining a competitive advantage over others in the market. It contains rules and guidelines regarding how, what, when, where, and to whom a company must communicate the brand message. The strategy makes the company more valuable over a long period of time. Strategies created by the brand need to executed properly across each of the business functions along with well-designing. This leads to enhancing customer experience, financial performance, and market share of the company.
5 Steps Approach to Building of Brand Strategy
The best approach to creation of brand strategy supported by relevant and timely insight is as discussed given below: –
Define your purpose
Developing a good understanding of your organizational purpose is the first step to the crafting of a well-designed brand strategy. It is a difficult task where the business pays more attention to what value they want to offer their customers. During this stage, questions like what is unique in our products that customers will love and how can we help them in solving their problems need to ask by the brand. The first step is termed a soul-searching exercise and whatever is discovered, you need to include that in your strategy and make it central to company culture.
Understanding the environment
It is quite important to get to know the context in which your business operates. Every business enterprise has distinct competitors in the market who are either giving direct competition by offering direct comparable products or competing indirectly in order to attract customers. The performance of competitors has a direct impact on your organizational performance. For building an effective brand strategy that is grounded in the real world, it is a must know about the competitors are acting, performing, and branding their product in the market. Performing a competitor’s analysis for understanding market position is one of the best ways to approach this step in crafting a brand strategy.
Setting SMART objectives
SMART objectives stand for smart, measurable, achievable, relevant, and timely. These objectives are quite popular and taught in every business 101 class nationwide. SMART objectives act as a guideline for grounding objectives in research you conducted before. It helps in ascertaining that the organizational goals decided by you are suitable for both marketplace and the business. Every key strategic area should be covered by goals but not just the financial performance.
Strategic plan creation
Once the goals are set, now the next step is planning and deciding the means to reach those goals. The creation of a strategic plan will make up the bulk of the brand strategy. The strategic plan defines investment plans and actions for reaching SMART objectives discussed in the previous step. The strategic actions need to be flexible in order to support business expansion plans but should be detailed enough for building an effective brand identity. It should include the mission, values, and principles of the company, departmental policies and process, and future investment plans.
Testing, refining and developing
The last step states that a brand strategy can never be stationary. 2 questions that need to ask on a regular basis is: Do the brand strategy is still relevant and effective in the current competitive scenario and the tactics we are utilizing that are the best fit for our SMART objectives and brand strategy. Whenever the answer to these questions is ‘No’ then you need to refine and develop your strategy. All those aspects which are not at par need to be identified and also reasons for the same need to be explored.
Types of Brand strategy
There are 4 main types of strategies when it comes to brand development which are as follows: –
Product line extension
Product line extension involves introducing a new product in the market which is similar to what the brand is already offering. The product belongs to the existing product category that is used for targeting the existing market under the present brand name. A product line extension is a very common to approach as the current brand name has already a long customer base in the market. Loyal customers are more likely to go for offering belonging to their favorite brand name.
Brand extension is a strategy used by businesses under which more products are brought into the market with the same brand name. It simply involves widening the market understanding of a brand. This strategy is usually approached with care by brands as it is not always possible that the brand’s expertise in some other product category is getting fully accepted. The brand extension works best when the introduced category of products has some kind of relationship with the existing product category of the brand.
Multi-brand is a variation of product line extension where multiple brand strategies are run within the same market. It involves building more than one brand which is competing in the same category of products. Large corporations more relatively adopt and implement this type of brand strategy. The major advantage offered by this strategy is that different positions are attained in the market using more than one multiple brands, which dominate overall shelf space and minimizes the competitor’s opportunities to win the market share.
The new brand is a final brand development strategy. It is used when a business is expanding its offering in the market by developing a new category of product that is distinct from its existing product line. As a result of building a new product line, they need to build a new brand name for themselves.