For many organizations, especially those in mature industries, brands are their most valuable assets whether at the corporate or product level. Awareness of the value of brands has grown in recent decades, particularly throughout the 1980s mergers and acquisitions whirl which prompted some consumer goods companies to become alert to the equity held in their brands. That’s why a strong brand creates superior value and competitive advantage that is sustainable e.g. Apple iPhone
In fact a successful brand is a long-term strategic asset for any organization. Some sectors such as public and non-profit may still are moving up the learning curve, others, particularly the fast-moving Consumer Goods industry, have long been conscious of the importance of brands as key assets. As such there is no existence of a considerable body yet of practitioner expertise and academic theory that can be brought to bear in creating, building and valuing brand equity.
However, concept is new and now growing at realization that the real equity of any business held in their brands. Awareness of the whole issue of Brand Governance has grown in the recent few years. Now-a-days marketers focus more on overarching reasons that present growing challenges and threats to brand equity for the future. According to them these are 6 major reason or challenges such as:
First, uncertain and fiercely competitive industry environment: Over the past few decades, many industries have been characterized by overcapacity, dramatically rising market uncertainty and Hypercompetition, a trend that continues. This is largely as a result of factors such as globalization and new technologies that have lowered barriers to entry, as well as the ongoing deregulation and privatization of some sectors such as airlines and telecommunications. In considering how they can compete in fiercely competitive and turbulent markets, some companies have begun to look to their brands as key to developing relationships with customers; as a result, there has been growing industry and academic attention paid to the quality of customer brand experience as a source of value like Sony
Second, empowered consumers: At the same time, consumers are becoming increasingly intolerant of any gap between what a brand promises and the experience it delivers when they actually encounter and engage with it. New distribution and communications channels, particularly the Internet, have given buyers, influencers and other stakeholders more information and choice of products and brand experiences than ever before. Consumers are also generally better informed, educated, sceptical, more self-directed and increasingly seeking value in the form of self-realization from the brands that they feel are right for them. Third, Line and brand extension proliferation: Today, a proliferation of line and brand extensions as firms exploit their brand assets means that many brands now act as an umbrella for an ever growing number of extensions and variants, often in several different and possibly unrelated areas. Coordinating and delivering consistent promised quality of brand experience across so many brand variants is clearly increasingly difficult to manage. Why 1 in 2 extensions fail
Fourth, growing number of distribution and communication touchpoints: Consumers expect consistency of brand experience at every touchpoint throughout their journey from first brand awareness, through trial and to repeat purchase. Again, in this rapidly developing context, coherent brand experience is becoming harder to deliver. Fifth, Use of strategic partnerships in delivering brands to consumers: Brand owners, of various forms, are strategic partnerships such as subcontracting, licensing, franchising or joint ownership in all the stages of creating and delivering the experience to final consumers. These arrangements bring the major dangers of complexity, lack of control and conflict inherent in all joint ventures to the brand delivery process.
Last, use of social media, Brand marketers have sought to exploit the opportunities offered by the growth of social media. Although they can spread the good news about a brand like never before, the reverse is also true; social media have also amplified the perils to brand equity of experience delivery failure. Bad news can now spread like wildfire and severely damage a brand’s reputation and equity more widely and rapidly than ever. As brand equity is a prime source of a firm’s value then these issues are the concern of all senior managers as well as brand marketers as they lie at the heart of an organization’s capability to create and sustain long-term value.
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