Disclaimer
For the purpose of this discussion and
according to the non-disclosure agreement, the real brand name from now on will
be substituted with “XBin”.
Branding Strategy
One of the most crucial aspects that we would
advice Company X to consider when expanding waste bins operations abroad is
branding strategy. So far XBin brand has been a success in Finland. Company X
is very well known in Finland, and has successfully been using corporate brand
as an endorser when marketing XBins (a good example would be XBin webpage).
For the purpose of global expansion of waste
bin operations, we would advice the company management to review basic theories
of brand architecture. It is important to note that Company X’s main
specialization is offering waste management services. The following brand
management theories are reviewed to analyze if the company should implement a
new branding strategies that would be specifically tailored for the purpose of
globalizing its waste bin operations.
Brand Architecture
According to Aaker & Joachimsthaler (2000)
the following four brand structures are to be considered when choosing brand portfolio/
strategy:
1)
House
of brands - an independent set of stand-alone brands.
a) Opportunity to address a new
customer segment without impacting the whole portfolio
b) Clearer positioning, opportunities
for active price strategies and/or variable product qualities
c) Allows for differentiations among
competitors
d) Less risky for the overall company
if one brand gains negative image
2)
Branded
House – employs a single master brand for all product / service offerings.
a) Easiness in market communication
b) More risk in case the brand gains
negative associations – will impact all product categories.
c) Increased opportunities of brand
extensions
3)
Endorsed
brands – independent brands for every products but endorsed by another brand
(usually corporate brand).
a)
Adds
credibility
b)
Adds
value
c)
Provides
associations
4)
Sub-brands-
are brands that are connected to the master brand, but add certain different associations
(often used to introduce the brand to a new segment).
a)
Sub-brand
ads/stretches master with:
i)
Attribute
associations
ii)
Application
associations
iii)
Brand
personality
iv)
New
segment targeting
v)
Often
used for line extensions
For the case at hand, the first three are to be
considered since the forth one is usually used in the later phases of brand
expansion.
Figure 2 summarizes the key points above.
Due to the fact that Company X corporate brand
is not well known outside the domestic market, especially outside of Europe,
following the table above, the answer to most of the questions on the left hand
side would be a “no”. Hence, it would benefit the company more having a
separate brand for waste bins, which is also the strategy the company has been
using so far. Having a brand which is designated to specific segment or is
responsible for a unique value proposition would allow for faster geographical
expansion.
It is important to differentiate the waste bins
business from the core business of the company, which is waste management
services, due to the new nature of the products. XBin waste bins are offering
the customer not only waste management solution, but also such features as
quality and design. Moreover, since the company has already established XBin as
a brand, it would eliminate the costly procedures of creating a new brand.
Furthermore, we believe that XBin brand is strong enough and is fully competent for foreign markets. However, one aspect that we noticed is that often XBin brand logo is printed in the corporate colors pallete. What we would recommend is really to think XBin brand through and make sure it is representative enough to consumers on its own without any corporate background. All the decisions on the brand, vision, logo, slogan should be made from the foreign consumers point of view.
Corporate branding
influence
Corporate message often has an influence on
consumers’ product judgment (Duncan and Moriarty 1998, Raju and Dhar 1999,
Hatch and Schultz 2001). Corporate message influences customers judgment when
it comes to product characteristics (Brown and Dacin, 1997), perceived product
values and evaluations (Goldberg and Hartwick, 19990) brand beliefs and
attitudes (Sheinin and Biehal 1999), product purchase intentions (Sen and
Bhattacharya 2001) and product choices (Creyer and Ross 1996) (from Biehal
& Sheinin, 2007).
The question to be asked here is whether
Company X would like to entail its corporate associations on its waste bins
business. Company X has positive associations in Finland, and is very
successful company. However, in most foreign countries it is not as well known
and will tell little to the foreign consumer. Introducing XBin as a stand-alone
brand will allow to communicate a specific, tailored to the waste bin business message.
Moreover, supporting a separate brand such as
XBin will allow to target the customer needs well and create a brand
association that will differentiate the product from its competitors. As
Nedungadi 2001 concludes in his research, when presented with only memory
retrieval, advertisement cues for target brand could lead to recollection of competitors’
brands. The solution to this would be to provide cues which would exclude
competitors from consideration set. In this case focusing on Finnish quality
and unique design, besides the practical features, can create an own separate
association in consumers mind. This can be further achieved by creating
advertisement, where XBin would be promoted in specific locations such as
airports or stadiums, giving the target clients a mental image and thus a
direct association of XBins and the mentioned locations.
Brand Concept
Management
Another good strategy to consider before expansion
is the brand concept management (BCM) (Park, Jaworski & MacInnis, 1986).
Like the authors argue, it is important to work on achieving the desired brand
image in consumers head when launching a new product (introducing the product
to a new market). The brand concept can be associated in consumers head with functional,
symbolic or experimental needs. Waste bins are usually perceived as functional
product. However, this may serve as an advantage to work on achieving several
concepts together that would be associated with XBin particularly. In this
case, it can prove as a competitive advantage to entail not only functional
concept but also symbolic in terms of design. Most airports or large office
buildings are looking not only for practical solution for waste management, but
are also interested in compatibility with the overall interior of the building.
Identifying the brand concept would further ease the process of implementing,
positioning and controlling the brand image over time.
Even though XBin brand already exists in the
Finnish market, in order to expand, especially if we are talking about global
expansion, the focus now should shift to building the brand around the global
customer. The next question that should come to mind is how to build a strong
brand? In the following section, the customer-based brand equity model is
introduced in detail since it is one of the main theoretical frameworks for
understanding the consumer behavior. This model applied both to consumers and
organizations.
Customer-based brand equity.
Introduced by Keller (2008), the Customer-based brand
equity (CBBE) pyramid
model is one of the best tools to measure, manage and create a strong brand as
well as distinguish it from other brands. Every marketer’s dream is to create a
brand that successfully establishes a positive (long-term) relationship with its
consumers. Thus,
understanding the consumer is essential as the power resides in the mind of the
consumer (Keller 2008).
The first step of the CBBE pyramid model,
salience, is the level of knowledge or insight the customer has of the brand. Consumers need to be able to evaluate the
benefit and attributes of the brand to establish the relationship. Based on the brands
points of parity and difference the customer will make assumptions on the
brands performance and decide whether or not there will be a relationship. A
mutual understanding between the partners, will collectively affect, define and
redefine the relationships (Hinde 1979). For this experience to be optimal the
marketers will have to assure the customer that their choice of brand will benefit
them positively.
A positive relationship, resonance, where the
consumer identifies the product as a different brand with positive attributes,
creates positive customer-based brand equity. If these attributes are negative,
the customer will react less favorable to the marketing activities and the
brand will end up having negative customer based brand equity (Keller 2008).
Keller 2008
Customer-based brand equity pyramid
In foreign markets, XBin is currently in the
salience phase; therefore it is crucial to incorporate the previously mentioned
suggestions to create a well defined independent (stand-alone) brand identity
and undertake strategic approach to customer targeting. Properly selected brand
identity and marketing the brand to the right customer would facilitate brand
awareness and recognition among the foreign customers. Achieving brand awareness
would in turn trigger certain associations and feelings in consumers mind. The
objective is to achieve brand – customer relationship, which is particularly
important in B2B marketing, since it facilitates brand loyalty.
The higher the brand is in the CBBE pyramid, the
easier it will be to achieve awareness and recognition in new foreign markets.
Eventually, it is also possible to benefit from well established brand-customer
relation by introducing premium pricing. Hence, again, we would urge Company X
to carefully analyze its current branding strategy and to take into account the
above mentioned key points.
(All references can be found in the comment section to this post).
