Brand Differentiation Many people think business strategy and brand strategy are the same. This mistake is often made by many people in business. Business strategy is an all encompassing one consisting of what business one is to be in, what brands or products or services are to be marketed, what is the marketing strategy, what products or brands to focus on, what is the manufacturing strategy, what is the quality strategy, what is the pricing strategy, what are the ways of reaching the customer, what is the HRD strategy, the kind of people and training required, what are the risks involved and finally, what is the financial strategy, so that the entire organization remains a profitable and healthy enterprise.
Brand Strategy is either building a new brand or developing an existing brand. Branding is all about uniqueness of a product or service. The word branding is derived from the Old English, meaning a 'burning stick'. As early as 2700 BC, the Egyptians used livestock branding as a deterrent to theft. Brand Strategy has developed a lot in sophistication today and for some companies it is at the centre stage of corporate and business strategy. Branding is now a very important part of a business.
Whether the business is a bank or a small retailer, the brand development and strategy to a large extent dictates whether it will succeed or not in the long run.
Brand Differentiation techniques The following strategies are available for brand development:
* Quality - Fine, you have developed a unique name for the brand. We have Six Sigma level of quality today. Another difficulty is to the fact that when every manufacturer claims superior quality, how do you evaluate it? The term 'quality' has become a cliché. Literally, millions of companies claim to be manufacturing quality products every day. People have the right perception of very high quality in their minds. Rolls Royce in cars, Rolex or Omega in wrist watches etc, Quality platform pays in the super luxury goods. In this category, people do not ask for the price. To a certain extent, the higher the price, higher is the prestige and status value. For mundane category of products, the quality awareness and perception is low. Quality always has a price. The higher price must justify the superior quality. Cheap products also have a market. But, if you produce cheap goods, price them high because of high overheads, the fault is yours. Don't expect the customers to patronize your products. For majority of the companies the quality platform, as a brand building strategy, may not work anymore, because the difference in quality levels hardly exists amongst world class companies.
* Price – Low costs accompanied by high volumes is the mainstay of this strategy * Transient Differentiation – This is done by some advertising and sales promotion schemes. This increases sales temporarily and hence called ‘Transient’.
* Circumstantial Differentiation – This is an accidental or incidental advantage like location, a company might possess.
* Strategic Differentiation - Strategic Differentiation is difficult, but the best long term brand building strategy.
Companies that adopt 'strategic differentiation' prove to be winners. The best example of this strategy is the computer chip manufacturer 'Intel'. Amongst all modern product companies Intel is the best at this strategic differentiation'. I recommend readers peruse the article titled 'Focus' written by Professor Dr. John Camillus of Katz school of Business, University of Pittsburgh, USA. This article is available for free in our web site. Microsoft is also good at strategic differentiation with its 'Windows' and 'MS Office' brands but has an inherent disadvantage in being a service company. If you take its products right from Windows 3.11 to Windows XP, though there have been substantial improvements in the products, they are more of upgrades. One can manage without upgrading. The moral of the story is 'strategic differentiation' works better for product companies rather than service companies.
Copyright. July 2007. www.madgopes.com. All rights reserved
To learn more about this author, visit Madhavan T Gopalachary's Website.
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Madhavan T Gopalachary
(Visit Madhavan's Website)
Madhavan Gopalachary, nick name "madgopes"
(g pronounced as in go) given by IIT
classmates, is a Mechanical Engineer and
an alumnus of Indian Institute of
Technology, Madras having passed out
specializing in IC Engines &
Thermodynamics.
He has nearly 35 years of experience in
the Corporate World. He started off as a
trainee and handled sales, marketing,
manufacturing, product management, profit
center management, strategic planning and
corporate development including R & D in
various organizations and at various
levels before becoming a CEO. His last two
professional assignments were at CEO level
before embarking to start management
consultancy business on January 01, 1998.
He has worked for British, Swedish MNCs as
well as very large Indian business houses.
He has spent a large portion of his time
from June 1998 till date in East African
Countries practicing as an independent
Management Consultant.
More details can be obtained at the
following web sites:
mmg.name/
mtg.html
mmgconsu
lting.biz/
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