Branding is one of the most important aspects of aspects of business strategy and provides sustainable competitive advantage. Branding allows a business to differentiate its products and services from those of its competitors. The digital economy has made it easier for small businesses to gain access to branding experts and leverage branding in a meaningful way.
Most businesses are allocating significant resources to understanding and optimizing their customer journey and experience. However, unless they leverage their brand as part of this process, the outcome is likely to be generic, easily copied, and will fail to provide a sustainable competitive advantage.
Todays business leaders are convinced of the importance of a customer-centric strategy and business model. To develop an in-depth understanding of their customer journey, theyre investing in data, like the Net Promoter Score (NPS) measurement, a key indicator of the degree to which people would recommend your company.
Armed with data from these measurement programs, businesses are building systematic feedback loops to create ongoing change programs aimed at enhancing the customer experience over time. However, success is often variable.
Embedding the brand into these processes as a filter for decision-making is crucial. Without it, there is a significant risk the end result will be a good, but ultimately undifferentiated, customer experience that will sooner or later be matched by the competition, eliminating any hard-fought advantage that may have been secure.
Why You Need a Brand Strategy
We live in a world that is driven by perception and brands represent customers perception of a companys credibility, products, reputation and customer service. A brand strategy is essential because it provides clarity about the competitive landscape, market position and customer expectations. This information is critical to develop effective marketing strategies and to fine-tune marketing messages to maximize your competitiveness and build strong brands. Branding significantly enhances the brands market performance and profitability by improving name recognition, builds credibility and trust, increases advertising effectiveness and inspires employees.
However, as competition gets more intense, your ability to rely on these methods become strained. Simply, everyone is doing the same thing, and everyone looks good. One response (and a good one) is to have a third party validate your business, whether paid or not.
Brand Extension Strategies
Now that you understand what a brand extension is, we will discuss how to create one. There are eight different strategies.
1. A similar product in a different form from the original parent product – This is the strategy Snickers used to create Snickers Ice Cream Bars.
2. Distinctive flavor/ingredient/component in the new item – Hershey’s chocolate milk uses this strategy. Consumers purchase this product because they know the taste of Hershey’s chocolate.
3. Benefit/attribute/feature – Febreeze is known for smelling good. Extending into the car air freshener category made sense for this company.
4. Expertise – Honda is known for reliable engines, which made Honda lawn mowers a good move for the company.
5. Companion products – Aunt Jemima launched a pancake syrup to go with its pancake mix.
6. Vertical extensions – This strategy has the reputation of going backward. For example, Rice Krispies are used to make Rice Krispies Treats. So Kellogg decided to offer a ready-to-eat version of this snack.
7. Same customer base – This strategy is used when a marketer knows they have a product that could be used by their current customers.
8. Designer image/status – Harley-Davidson found success with this strategy through its clothing line.
Leveraging your brand throughout your customer experience will result in a more ownable, authentic, and differentiated customer experience that will deliver a sustainable competitive advantage and significant ROI.
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