Before discussing what brand management involves, we will examine why it is considered a pertinent marketing tool for retail companies in the current developed and highly competitive markets. As the marketplace becomes mature, there is a need to rise above the mass and confusion of competing offers. The brand, if managed properly, confers individuality – something different among the crowd. In a mature market, companies experience slow growth and declining returns. Each company will, therefore, attempt to defend its market share, encourage consumers’ purchase loyalty and profitably differentiate their outlets and offer. I believe a brand provides an icon or symbol, which helps to identify the promise of a particular retail offer or service and helps to distinguish it from competing offers
Successful retail outlet brand building enables organizations to –
- Build stable, long-term demand based upon increasing store brand name strength;
- Build and hold better margins than stores which have weak or unsuccessful brand names;
- Differentiate them through creating associations that can endure over long periods of time;
- Add values that entice customers to visit and buy;
- Act as a signal to the customer implying trust in the fulfillment of service expectations;
- Promote customer loyalty and launch relationship marketing schemes for their retail offers/services;
- Protect themselves against the growing competition of alternative intermediaries and to gain leverage in the distribution channel;
- Protect themselves against aggressive competitors by strengthening barriers to entry;
- Transform themselves into companies that are attractive to work for and to deal with;
- Negotiate with suppliers from a position of improved strength.
The latter are the potential results .of successful retail outlet brand building, but all involve substantial initial, and ongoing, investments to ensure there are long-term returns. Further- more, brand building needs to be a comprehensive exercise, which covers every aspect of the company and every point of contact with the consumer. This puts brand building under severe pressure in modern markets where short-term profits are more commonly the measures of success.
Brand Loyalty
Some consumers use the same retail outlet or purchase the same brand of product on most occasions or on a regular basis. This buyer characteristic is known as store or brand loyalty. In particular, brand or store loyalty will mean that a person will
- Feel positively disposed to the brand, based upon brand attitude;
- Utilize the store more than other stores or buy the brand more frequently. This will be
- Based upon store or brand preference
- Continue to utilize the store or brand over time. This is the brand allegiance
This is not to say there is just one type of loyalty; loyalty may be expressed for one Or more brands. If we assume that there are five brands, or five properties of brands, that the consumer can choose from – A, B, C, D and E – then we can further segment the demand, based upon brand loyalty, as follows
- Hard core loyals – These consumers buy one brand all the time and demonstrate strong allegiance. They would therefore on five occasions buy AAAAA, because they have undivided loyalty to the brand.
- Soft core loyals – These consumers will be loyal to two or three brands. Thus a buying pattern of ABABA represents a consumer whose loyalties are divided between two competing brands.
- Shifting loyals – This type of consumer shifts their loyalty from one brand to another. The buying pattern AACCC suggests a consumer whose loyalty has shifted from one brand ‘A’ to brand ‘C’.
- Switchers – These consumers show no loyalty to anyone brand. The pattern ABCDE suggests a switcher who is prone to buy when there is deal being given (price offers, sales, and extra benefits). They may equally be a variety shopper and wants something different each time they purchase.
Brand loyalty can be explained in a number of ways – habit; maximization of value over price; a cost may be involved in switching brand; the availability of substitutes; perceived risk of alternatives is high; past satisfaction with the brand; the frequency of usage; influence of the media; the awareness of the alternatives; and so on. For obvious reasons, the loyal customer is of key importance to the retail industry, especially those loyal customers who are high spenders or provide long- term patronage. Loyalty schemes are being introduced in an attempt to retain customers over longer periods of time. Such schemes are often based upon database programmers which provide benefits such as for those with loyalty shopping cards whose expenditure and frequency of purchase can be assessed. The database can identify individuals’ birthdays, when a person is 21 for example, or it can identify lapsed customers to whom a special offer can be made. In addition, the information can be used to understand the patterns of preference and demand at different periods so as to convert soft core loyal and other customers, into hard core loyal.