Four main components of branding can be specified as positioning, storytelling, design, price, and customer relationships and each of these components are discussed further below in a greater detail.
Positioning means “defining in the mind of a customer what a brand stands for and how it compares with competing brands” (Healey, 2008, p.8). The origin of the concept of brand positioning can be linked to the idea that consumers form particular opinion regarding each brand they encounter and by engaging in brand positioning companies attempt to influence this opinion in a favourable manner.
Brand positioning can be divided into four different components. The first component relates to the class of the product of service, as well as, to the structure of the relevant marketplace. The second component of brand positioning involves segmentation of consumers. Consumer perception in relation to the brand compared to the competitors forms the third component of brand positioning. Final, the fourth component of brand positioning relates to the benefits associated with purchasing products and services of the brand.
It has been stated that in branding through storytelling “the story is what drives the bond between the company and the consumer” (Fog et al., 2010, p.23). Four elements of storytelling as part of branding can be specified as message, conflict, character and plot. All of these four elements should be present in a branding strategy in order to in order for the strategy to be successful.
In order to implement storytelling with an increased level of efficiency companies must communicate the same story to organisational stakeholders through an effective integration of various marketing communication channels.
It has been argued that “design, in all its varieties, has the potential to bring brands to life in a way that can be tangibly experienced” (Abbing, 2010, p.7). Design can be specified as an integral part of brand proposition and a visual articulator of what the brand tends to be and the expression of the brand.
The idea of introducing necessary modifications to brand design in global markets taking into account cultural and other characteristics associated with a particular market is defended by Franzen and Moriarty (2008). The authors stress that failing to address cultural differences associated with global markets within design component of branding may result in misunderstandings and conflicts due to cultural differences with negative consequences for the brand.
It has to be stated that “pricing is an important aspect of the marketing and branding strategy as it is one of the first indicators of a brand’s positioning to consumers” (Okonkwo, 2007, p.140).
Global pricing strategies available to multinational brands can be divided into three categories: ethnocentric, polycentric and geocentric pricing. Ethnocentric pricing strategy “is a kind of cost-based pricing approach, whereby prices vary per region or country based on the variations in freight, duty and other add-on costs” (Gelder, 2005, p.49).
Polycentric pricing strategy, on the other hand, has provisions for price variances according to differences associated with markets and relevant competitive conditions. McDonald’s pricing strategy can be mentioned as a clear example of polycentric approach.
The third variation of a pricing approach, geocentric strategy is devised taking into account specifications of local market and competitive conditions within, however in this strategy there is a provision for aligning local prices with a global pricing strategy.
5. Customer Relationship
Customer relationship management represents “the sometimes quixotic efforts of corporations to make each of us feel special” (Healey, 2008, p.9) and it is widely believed to be an essential component of a successful branding strategy. Customer relationship component of branding implies the necessity for businesses to make each client feel special despite having thousands or even millions of customers.
Hammond (2011) stresses the role of information technology in general and increasing ranges of social media in particular in maintaining customer relationships by large companies. Specifically, the author maintains that social networking sites such as Facebook and YouTube have created effective platform though which business can foster long-term relationships with their current and potential customers.
Abbing, E. R. (2010) “Brand-Driven Innovation” AVA Book
Fog, K., Budtz, C., Munch, P. & Blanchette, S. (2010) “Storytelling: Branding in Practice”, 2nd edition, Springer Publications
Franzen, G. & Moriarty, S. (2008) “The Science and Art of Branding” M.E. Sharpe
Gelder, S.V. (2005) “Global Brand Strategy: Unlocking Brand Potential Across Countries, Cultures and Markets” Kogan Page
Hammond, J. (2011) “Branding Your Business” Kogan Page
Healey, M. (2008) “What is Branding?” Rockport Publishers
Okonkwo, U. (2007) “Luxury Fashion Branding: Trends, Tactics, Techniques” Palgrave Macmillan