BRANDING POSITIONING AND DIFFERENTIATION FOR MAXIMUM COMPETITIVE ADVANTAGE
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BRANDING POSITIONING AND DIFFERENTIATION FOR MAXIMUM COMPETITIVE ADVANTAGE
Chapter one
INTRODUCTION
1.1 Background of the Study
Brand positioning strategies strive to develop a distinct identity and position for its products and services, ensuring that both the product and the organisation offer value that exceeds that of their competitors (Ind, 2007).
Brand positioning strategy can offer value to the firm by implementing its vision and creating a distinct position in the marketplace. It can also help the firm increase the leverage of its tangible and intangible assets.
It is a level of sponsorship by the parent brand with two extremes: First, consider the uniformity model, which positions and profiles both the corporate and business units. Second, consider the variety model, in which business units diverge from the corporate level (Van Riel and Bruggen, 2002).
According to Van Riel and Bruggen (2002), a brand positioning strategy is a well planned and executed process for establishing and sustaining a positive reputation. They also stated that the brand positioning was used by its constituent aspects when conveying messages to stakeholders. Some elements have an impact on the brand positioning strategy.
When selecting a branding strategy, consider corporate strategy, business model, organisational culture, innovation pace, added-value lever, resources, and brand vision (Kapferer, 2008).
Strategic branding is important for an organisation because it considers fundamental changes in the environment, allowing enterprises to be proactive rather than reactive.
A consumer should be able to easily recognise which brand is best for a specific need or demand. So, for successful brand positioning, the following aspects are critical for businesses: target consumer, primary competitors, point of similarity with competitors, and point of distinction with competitors. (Bett, 2005).
4 As previously said, there are various aspects that influence successful brand positioning strategy when organisational strategists choose brand positioning strategy as a source of competitive advantage for the parent and to achieve the organization’s other goals.
Although brand positioning strategy can be useful, if not handled correctly and comprehensively, it might backfire on an organisation; thus, a holistic approach is required to assess the performance of the brand positioning strategy (Kapferer, 2008).
Competitive advantage refers to a company’s ability to gain market dominance (Evans and Lindsay, 2011). This notion is fundamental to strategic management since every organisation seeks a vantage point that will provide a competitive advantage over its rivals.
Porter developed a paradigm that depicts an industry as impacted by five forces (Porter, 2005). His advise was that the strategic business manager who wants to get a competitive advantage over competing enterprises should utilise this model to better understand the context in which the organisation works.
One strategy to get a competitive advantage over competitors is to reduce costs; another option is to differentiate products (Porter, 2005). Product differentiation will be of little value unless the difference gained grabs and captures the attention of buyers.
If the customer is to be fully satisfied, their requirements and desires must be integrated into the business process, from customer surveys to design, production, delivery, and use (Evans and Lindsay, 2011). Peteraf (2003) defines competitive advantage as sustained above-average returns.
According to Barney (2002), a firm has a competitive advantage when its actions in an industry or market generate economic value and there are few rival enterprises performing similar actions. Barney goes on to argue that corporations gain competitive advantage when they rethink their branding approach.
Cool (2003), like Barney (2002), argued that freely transferable assets do not provide a competitive advantage. According to the preceding talks by many authors, competitive advantage implies that a firm has higher returns than rival firms or that it provides a superior product and/or service to its customers.
Regardless of the conditions, brand extensions remain valuable to businesses because they allow them to capitalise on the parent brand’s equity. Essentially, leveraging a strong parent brand can decrease the risks associated with launching a brand extension into a new or existing market.
One of the biggest drawbacks of competitive differentiation through brand extensions is that each brand extension claims to be new, bigger, better, or simply improved. However, in most circumstances, competitive differentiation is the outcome of providing customers with value that exceeds their expectations (Albert et al. 2008).
In the pursuit of difference, most brand extensions become too similar to one another, therefore eliminating competitive distinctiveness (McGovern&Moon, 2007).
Many brands gain commoditization by incorporating new features into their brand extensions. In these circumstances, brand positioning has become the fundamental driver of competitive differentiation.
In order to ensure a consistent positioning strategy for brand extensions, brand managers must make some crucial strategic decisions that have a significant impact on both the parent brand and the brand extension.
To help guide these decisions, we will first go over the procedures involved in building an effective positioning strategy, as well as the many types of branding strategies.
We will also provide a thorough evaluation of brand extensions and competitive differentiation challenges. By applying the brand positioning framework to brand extensions, we give brand managers a step-by-step guide for finding and building brand positioning bases.
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