Thoughts on Branding Strategy

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).