When a company wants to enter a market, it must differentiate in that market with its products from the existing products so customers will consider buying it and enable the company to take advantage of growth options.
The reasons for entering a new customer segment or a new geographical market can vary greatly, for example the intention to internationalize or cooperative market cultivation strategies.
A market entry – with presumably high market entry barriers – cannot rely on pure support at the performance or needs level. It is therefore important to mobilize the brand for the entry: It allows the company to present a sensible overall image that can persevere in a new competitive environment. The brand thus plays a major part in any market entry:
By designating products with a brand name or an umbrella brand, the products become more easily identifiable for the customer, and anonymity of the product is bypassed. Well-known brands give customers orientation in purchasing situations that are marked by uncertainty: Simple T-shirts, for example, are upgraded by adding a logo (brand symbolism) and thereby lower the risk perceived by the customer. Unlike the mere product, the brand approaches the buyer on an emotional level.
Charged with the identity and value ideas of a company, the brand works like a battery. Thanks to this stored energy, the products not only promise to satisfy a need, but at the same time provide meaning and individual added value.
The brand condenses information that is relevant for the customer into a performance promise. The products must keep that promise. The entire product portfolio is in fact permanent proof of performance for the brand, which equips all products with values and content.
Product and brand are mutually interdependent and must therefore be closely linked in order to take advantage of the positive reciprocal effect.
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A marketing agency is a service provider for measures concerning the marketing mix: communication, price, product, and sales. They assist companies with the planning, design, and execution phases of their marketing activities. Full service agencies take on all three of these phases.
Marketing agencies are often considered to be the same as advertising agencies. These latter, however, focus entirely on communicative campaign aspects, such as ads, TV spots, online advertising, and so on. Some advertising agencies even focus on an even narrower field (for example only digital communication).
What is the difference between marketing consulting and brand consulting?
Not all marketing agencies are the same. There are specialists for the various disciplines and sub-disciplines of the marketing mix.
Unlike a brand consultancy, which deals with the fundamental strategic orientation of a company and its brand(s), meaning the cause, a marketing agency operatively works on communicating the brand positioning to customers by means of appropriate measures (effect). See also the glossary item Marketing versus Brand.
Conversely, this means: In order to successfully establish a brand, the measures developed by marketing agencies must be aligned with the respective brand strategy.
Marketing makes promises – the brand keeps them: This sentence illustrates the difference bweteen the two disciplines.
A brand consultancy asks questions like: "Where do we come from?" and "Where do we want to go?" A marketing consultancy wants to know "What communicative tools fit the brand? How do we gain access to the target group, our chosen meaning and value community?" So the marketing consultancy supports all marketing and sales activities of a company.
Further explanations are available in our detailed glossary items
The two terms marketing and brand are often confused or used synonymously. Though they are closely related, they describe two fundamentally different concepts.
Marketing defines the entire discipline of planning, coordinating, and controlling market or customer oriented corporate activities. The goal of marketing is to offer the products and services that satisfy the needs of (potential) customers in the market and thereby to contribute to achieving the corporate goals. Marketing is thus the operative level.
The concept brand, however, encompasses the strategic level upstream of the operative implementation. Brand management is the responsibility of corporate leadership and top management. This is where the strategic decisions are made to attain a clear, sustainable market profile and to stage the company's unique selling propositions. This requires a unified appearance of the brand, which is achieved by synchronizing sales and marketing measures and building brand-conform internal communication structures.
Consequently, the core task of the brand is strategic orientation, while marketing is responsible for the operative implementation of that orientation.
We can illustrate the different responsibilities with the example of pricing for a product or service range of a brand: While brand management determines what price category the brand should occupy, marketing conducts price adjustments or campaigns.
The same applies to sales: Decisions about sales channels and the synchronization of measure planning are handled as part of brand management. Marketing then provides information and advertising materials or organizes events.
When the respective responsibilities of brand management and marketing are clearly defined and delineated for the responsible people, both can form a strong team that substantially impacts the success of a brand and a company.
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The strength of a brand manifests in how precisely it manages to occupy a monopoly position in people's perception through condensing its peak performances and conveying them in the market, so that not the product but the brand triggers the purchase decision with its indispensability.
We grant that there is neither a scientific nor a unified practical definition for the concept of brand strength.
The measuring criteria vary depending on model and provider. Six examples:
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Media brands are predominantly found in four sectors: Print (newspapers, magazines, books), broadcasting (TV, radio), storage media (CDs, online media, networks) and film and new media with the sub-sectors internet, video, and online games as well as mobile services.
At first glance, successful media brands function like any other brand: They are able to control their success because they know their DNA and their fans. They distance themselves from things they cannot do and project strategic insights outwardly as their positioning. The continuous transfer of the brand strategy at all brand touchpoints creates a consistent brand experience, which gives orientation and which customers reward with their trust.
Unlike other brands, however, media brands face the challenge of having to attract fans from two different sectors: B2C (public, buyers) and B2B (advertising market). The orientation function of the media brand makes buying and using media easier for the consumer, simultaneously increases customer loyalty, and finally ensures stable coverage. This in turn presents advantages to the advertising market – as a consequence, both target groups (customers and advertising partners) grow. It follows: A strong media brand attracts fans both as a B2C brand and as a B2B brand.
But the media landscape is in a state of transition, because the type of media usage is diversifying: The new media address highly diverse user interests with specialized content, and user behavior changes accordingly. Experts anticipate a wave of concentration for the future in which only strong media brands will persevere.
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The term microbrand refers to small-scale brands with a geographical or market-specific focus. These brands are only familiar to consumers in particular regions or market niches.
Microbrands typically arise when a company is founded, so they have the character of startups or small companies. Quite often, the driving force behind them is enthusiastic fans of a product/service category or disappointed consumers who want to offer solutions to problems they have experienced firsthand. More and more frequently, this dynamic brand form is also used successfully by large enterprises.
What are the advantages of microbrands?
Although microbrands are generally found in all industries, they are most frequently found in the watch market; they also play a part in the beauty, luggage, and fashion industries. Examples of brands that can until now — or at least during their starting phases — be called microbrands are: Code41, Tommy John, Allbirds, Glossier, Horizn Studios, Gogoro or On Running.
Microbrands as unknown players face the challenge of persevering against large, established brands in the market and gaining the as yet non-existent trust of consumers.
Their success factors are, for instance, digital business models and a consistent "direct to consumer approach". This can create a new kind of customer relationship. In addition, the specialization on a few central peak performances helps to build the necessary credibility in the market. Thanks to their small size and clear focus, microbrands are able to consistently manage all brand touchpoints and compel customers with a uniform customer experience.
Current market developments are creating an attractive environment for microbrands: In a world where more and more people look for the unique and individual, microbrands offer a refreshing alternative to global megabrands you can get on every street corner. Also, small brands can communicate an attitude of authenticity, serious social added benefit, or an honest passion for the product to their customers much more credibly.
The slim cost structure of microbrands is another advantage. Performances can be offered at attractive conditions. This gives consumers the feeling that they are being treated fairly. However, from a brand-strategic viewpoint, microbrands should take great care to differentiate themselves not only through their pricing and thereby become interchangeable. Only unique performances will remain attractive in the long term.
The age group of millennials is becoming more and more influential – not only because of their increasing buying power, but also because they exert a magical attraction on the older and younger generations. A company that does not manage to build a relationship with the millennials will have problems in the future: as an employer and with selling their products and services.
How do brands connect with the millennials?
Millennials not only herald a generational transition, but also stand for a social revolution. They have three main characteristics. They are:
This is why brands need to be aware of the following:
1. Interactive and networked: More than any generation before them, millennials are part of extensive networks. Still, the problems of sensory and information overload and attention deficit remain. By using Instagram and similar services, millennials have between 3,000 and 10,000 brand contacts a day!
The solution: Take a clear, condensed No.1 position in your market – and thereby in your customers' minds.
2. Optimistic: Millennials are generally attracted by the positive. They look for meaning and sense in their actions and in every buying decision. Millennials are principally more tolerant of high prices for brands that clearly pursue a "higher purpose".
The solution: Define your "reason why": What is your brand's reason for being?
3. Self-centered: Technological developments are spurring millennials to top performances of self-presentation. They are constantly on the lookout for self-realization and recognition. They are used to being the center of attention.
The solution: Be present at the interfaces with your customers and be ready for relationships and dialogue.
When a manufacturer sells two or more brands in the same product segment, we call this a multi-brand strategy.
Often, the brands that are part of the multi-brand strategy are conceived for different target groups (e.g. for cultural differences) or for different price segments (e.g. as luxury or premium brand). It is important that consumers recognize a credible brand differentiation and that the products differ either in terms of objective-functional or emotional characteristics and (added) value(s).
A classic example for a multi-brand strategy is applied by Henkel.
Like every brand architecture, a multi-brand strategy can have its advantages and disadvantages.
Examples of advantages:
Possible disadvantages:
Both Persil and Spee use the slogan "Quality by Henkel". That means that the company also uses an umbrella brand strategy. Depending on the management, a parent company can also choose to remain completely in the background. The decision is up to its leadership. But the positioning of the individual brands and their communication should always be unambiguous.
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