Four Brand Development Strategies to Maintain Competitiveness
The brand represents the perception in the consumers’ mind. Nowadays markets are highly competitive and the margins between them in delivering the promises that they make are slim to none. Therefore, brand development becomes a tool to maintain the consistency in terms of quality, value and trust that consumer finds in the company. When it comes to brand development, there are four main approaches.
Product Line Extension
A product line extension is the process of introducing a new product. The new inclusion is within the same category or product line that the company already activates in. As such, this is targeting an existing market by using the existing brand name.
This has become a popular approach in marketing. The company can leverage the existing brand recognition to extend the product offering with variations, which is likely to be well received by loyal customers.
Big retail brands often use this approach, where variations of tastes/flavours and packaging sizes have some appeal with the marketplace.
A variation of the product line extension approach is to run a multiple brand strategy within the same market. This means having more than one brand competing in the same product category.
Large companies usually employ this strategy to crowd the market and gain a sizeable competitive advantage. For example, a manufacturer of shampoos may have multiple brands that appear to compete against each other, but have the same corporate ownership.
This is done to address different market segments for the same product. Besides having different positioning in the market, it also reduces opportunities for competitors to enter the market.
The downside of the multi brand strategy is the cost and time of create a new brand name that will catch on with consumers.
The brand extension approach involves broadening the brand’s reach and target markets. The company introduces products from a completely different niche or category under the same brand.
For example, CAT the construction equipment manufacturer has recently started to market a clothing line — effectively broadening the brand’s target audience.
Brand extensions should be carefully examined and planned, since the market may not comprehend the brand’s expertise in another product category. Therefore, brand extensions can be gradually done by entering new product categories that have at least one commonality with the brand’s existing products.
Finally, the fourth brand development strategy is forming a new brand. This means that a new product line is introduced, as well as a completely new brand image is created. This is like starting a business from scratch.