Executive Summary
Acme computer software and Hardware Company deals in computer hardware and associated software products since it was established in 2009. However, five year later, the company was experiencing diminishing returns on investment and declining marginal profits because of its low credibility. To address the problem, the management formulated a brand marketing strategy using the results of the brand’s market situation, which showed a poorly performing brand. The strategy consisted of establishing the brand’s positioning values, the meaning of the brand, and a brand equity marketing program.
To achieve better results, a response plan was formulated to build a stronger brand presence, enhance brand relationship associations among the customers using different marketing intermediaries based on the Brand Equity Model. The goal was to enhance the brand’s awareness among the customers using social media and other advertising channels. The results were a significant increase in brand awareness, brand associations, and brand quality. It was recommended that the strong brand image that was achieved could be sustained by establishing a strong online presence and by offering free after sales services.
Introduction
Acme computer software and Hardware Company was established in 2009 and specialises in the supply, installation, and maintenance of software and hardware computer products including the sale of new and refurbished desktop computers and laptops. The company’s directors regard the business in the computer industry to be growing because of the growing global demand for computers today. The company adopted a market positioning strategy with an aim to improve the company’s brand name to become synonymous with computing and computer products in the local market (Chaudhuri & Holbrook, 2001).
However, five years later, a survey conducted across 50 stores across the local market showed that the credibility and endurance of the brand was encountering significant competition and rivalry from other firms offering similar products and services resulting in a decline in brand equity. The survey results were consistent with the argument by Dahlén, Lange and Smith (2010) that describe the adverse effects on a brand when the brand equity leads to a decline a brands’ asset base value, low brand selections, decrease in customer loyalty and brand extensions, higher advertising costs, diminishing marginal gains, and less economic contributions to the profit base of the company.
The emerging trend led to a 15% decline in sales, a decline in the knowledge level of the brand name among the target customers, insufficient knowledge on customer satisfaction, lack of indicators that tie the brand name to long term success, low protection of the brand equity because of a lack of a mechanism to measure the impact of the brand equity on the company’s performance (De Chernatony, McDonald & Wallace, 2010). To address the above brand presence and equity problems, the company’s directors and the top level management decided to conduct a brand marketing campaign based on:
- Determining the brand and market situation
- Identifying brand positioning and values
- Investigating brand meaning
- Developing a response and relationship plan
- Implementing the marketing strategy to grow and sustain the brand equity
- Measuring and interpreting the brand performance of the strategy
Brand market and situation
An analysis of the performance of Acme computer software and Hardware Company brand name across 50 stores involving 1000 participants revealed that 30% of the respondents were not aware of the brand name, 20% perceived the services and products to be of low quality, 35% were loyal to the brand, and 25% showed positive brand associations (De Chernatony et al., 2010).
A comparative analysis of different brands offering products and services in the computer hardware and software industry are tabulated in table 1. The results showed that Acme’s brand equity in the target was low and it was recommended for the management to develop a brand marketing strategy to stimulate customer based brand equity (Delgado-Ballester & Luis Munuera-Alemán, 2005).
The expected results were to increase the perceived quality of the brand, improve the customer perceptions, change their behavior, improve brand associations, and enhance the brand presence by creating incentives for customers to increase brand loyalty and positive responses. Wood (2000) argues that by positively enhancing the strength of a brand, the marketing strategy could enable the manager to achieve the results that are consistent with the theory of expected utility. The rationale is that customer’s choices are inclined to maximize the expected utility of services and products offered to meet their needs and expectations. It was projected that the company could achieve a strong brand equity that could provide value to the firm (Bhattacharya & Sen, 2003).
Table 1: Brand name
A statistical analysis showed that the brand name was not doing well, with a cumulative percentage of those who agree that the brand was either doing poorly or very poorly made 46.2% and those who agreed that the brand name was good or excellent constituted 48.5%.
Table 2: Competing brands
A statistical analysis of the market situation to determine the customer based brand equity of competing brands showed that Acme had a 15% market presence, Ipad ltd had a 23.1% market presence, wang hi had a 23.1% market presence, and Nord Computers had a 30% market presence (Bhattacharya & Sen, 2003).
Brand positioning and values
Klink and Smith (2001) argue that the managements of many companies in the market today are aware of the impact of brand positioning and brand values on brand equity. In theory and practice, brand positioning and values are important in designing the right product and service offerings to the target market to create strong brand images, values, perceptions, and uniqueness to ensure the themes occupy the minds of the customers. To address the situation, the management designed a brand positioning strategy to position the brand in the target market (Heslop & Nadeau, 2010).
The target market for Acme computer software and Hardware Company constitutes the broad community of users of PCs, laptops, and a wide range of software and computer hardware devices for personal and industry use. Here, a broad customer base purchase and use the computer based products for personal, corporate, or business use (Bhattacharya & Sen, 2003). The bottom line is that any computer hardware and software attributes such as the ability to offer Internet communication, play games, run business, and manage other activities certainly motivate people to purchase the products.
However, good market capitalization, investor support, and company credibility determine were strong values that contributed to Acme’s growing brand equity. According to Delgado-Ballester and Luis Munuera-Alemán (2005), the trusted reputation of a brand depends on the customer decisions, and the individual value that leads to marketing segmentation.
Acme computer software and Hardware Company’s brand values were the points of difference that consumers used to associate the brand with the brand equity. The values include the portability of computers, ability to accommodate new innovations, multitasking functionalities, uniqueness, intuition, and reliable operating systems. The management established that the associations were necessary for establishing brand identity, preferences, greater loyalty, and inelastic response to price changes, brand extensions, larger profit margins, increasing market communication efficiencies, and reduced vulnerabilities to competing brands. To differentiate the company with other brands, Acme computer software and Hardware Company used a premium pricing strategy to successfully position the company in the market.
In academic literature, McAlexander, Schouten and Koenig (2002) argue that a brand value determines the image and customers’ perceptions towards the brand, brand loyalty, brand preferences among the customers, and strong brand associations leading to stronger brand awareness and a strong brand experience.
The brand values that were used to position the product on the market included issuing free aftersales services in a low turnaround time, offering low priced alternatives if a product fails to satisfy the customer, offering free maintenance services a low cost, offering remote services when and where possible, establishing good will among the customers to improve the brand identity, creating a strong brand trust among the customers, ensuring the performance of the products meet all the customer requirements, establishing a cultural brand management process, and using labels where necessary to market the brand among the customers (McAlexander et al., 2002).
A market analysis of the market segments revealed that 30% of the customers aged 18 and below preferred to use small sized laptops and portable electronic devices with Internet access for downloading music, playing games, and socializing on social networking sites. Those aged 25 and below were in the 33% category of customers who preferred to use laptops and desktop computers for academic purposes, to socialize, communicate, create new friend. In addition, the category consisted of those who use the use laptops and desktop computers for personal businesses. The other 20% category consisted of firms which use computers and software products for business operations.
Brand meaning
Organisations that know the meaning of a brand have invested heavily in brand equity by putting strategies in place for establishing strong associations with the customers that result in competitive advantage, increased financial returns, and a strong brand mantra. According to Wood (2000), different authors define the brand meaning from different perspectives. The approach that was used to define the brand includes establishing customers’ perceptions, which increased the customer’s emotional attachments to the brand name based on the wealth of accumulated knowledge about the brand (Wood, 2000). To develop a mental map of a strong response plan, the marketing strategy was done by:
- Creating a compelling market position
- Maintaining a strong market position
- Creating a persistent brand
- Creating a strong and powerful brand stay strategy
- Differentiating the strategy with other competitor strategies
Once a strong brand position was established, it was possible for the company to earn the accruing benefits that positively impact on the financial and market position of the company. The main indicators that characterised the successful positioning of the brand were a strong brand differentiation, enhanced competitive advantage, a promising brand, and strong inspiration among company employees to build the brand.
The brand equity was used to differentiate the company with its competitors to establish a strong brand promise among the customers. Wood (2000) draws a strong parallel can be drawn between brand meaning and the personality of a person, which could significantly gain generate financial and market share for the Acme computer software and Hardware Company. The brand personality includes sincerity, excitement, competence, and sophistication.
Acme computer software and Hardware Company uses its brand name to differentiate it with other competitors by consistently providing a pool of products and services appropriate for each market segment. In addition, the company combined the visible, invisible, intangible, and tangible products and symbolic attributes to enhance the brand equity (Chaudhuri & Holbrook, 2001). Typically, marketing executives know that a brand is a living memory and to that end, the company used adverts and differentiated services to anchor the brand name in the memory of the customers (Wood, 2000).
Response and relationship plan
The response plan consisted of a strategy to respond to the brand problems the company was experiencing using a brand relationship plan that was designed to create a platform for the company and customers to meet together for the buying and selling of products and services on a continuous basis. In theory, Wood (2000) asserts that brand relationship occurs across intermediaries and brand owners which are the company, and stakeholders.
The brand response and relationship plan was developed based on Keller’s Brand Equity Model, which is defined as the “customer based equity model”. The success of brand marketing depends on how the company shapes the way customers think and their attitude towards the service and product offerings of the company (Bhattacharya & Sen, 2003). The key elements of the plan included trust among the customers that was achieved by offering them genuine products such as computer accessories, original software products, strong customer relationships, honest answers to customer complaints, and real time responses to customer complaints and inquires (Chaudhuri & Holbrook, 2001).
On the other hand, the brand relationship plan was implemented by creating a brand resonance plan that consisted of positioning the company’s representatives at strategic markets, engaging customers in active communication on social media, organizing trade fairs, and creating a forum on the social sites to address customer needs and expectations.
Table 3: Brand positioning
Brand marketing strategy
As it is known today, Ailawadi, Lehmann and Neslin (2003) argue that a brand marketing strategy is important for a company to position itself in the market using different marketing strategies. Acme used a brand communication model that factored customers, content, and delivery of quality services to the customers defined the main components of the brand marketing strategy.
The company created a strong positive brand perception about the brand among the customers. The communication plan was implemented by first identifying the target audience who consisted of individuals, corporate entities, and small, medium and large business organisations. The messages were intoned with empathy, leadership, news about new product in the computer industry, humor, and strong relevance to the needs of the customers (Bhattacharya & Sen, 2003).
The strategy consists of constantly presenting the brand to the consumers through adverts, using the media such as social sites, use of wholesale and retail outlets to reach the consumers, creating a strong company brand name, and maintaining the brand name. In addition, involving spokes people, press/media, carrying out sponsorship programs, using emails and newsletters, advertising, coming up with new products, and web-based promotions could increase the brand presence (Bhattacharya & Sen, 2003).
Because economic factors are critical determinants of the level of response of customers, different products such as laptops, desktops, and other hardware and software devices were offered at different prices depending on the income level of the customers.
Measure and Interpret brand performance
Ailawadi et al. (2003) maintains that brand equity provides a measure of the performance of a brand in the market. Table 4 shows the results that were obtained after the brand marketing strategy was implemented. The brand equity components that were used determine the performance include 25% increase in brand awareness, 33% increase in perceived brand quality, 16.7 % increase in brand associations, and 25% increase in brand loyalty.
Interpretation of the brand performance could be done using statistical analysis of the responses from the customers to the brand equity constructs of awareness, perceived quality, brand associations, and brand loyalty. Brand awareness is the ease, with which customers are able to remember the brand name, and repeatedly purchase the products and services associated with the brand. Brand associations are the factors such as the uniqueness associated with the products and services, and the point-of-parity and point-of-difference in the perceived performance compared with other brands.
The perceived quality was measured using the financial measure of the return on investment (ROI) and brand associations connecting the customer to the brand. On the other hand, brand loyalty was measured using the brand equity and the intensity of customers buying the brand’s products and services.
Table 4: Measures of success
Control the performance of the strategy
A new brand strategy to control and maintain a strong online presence was implemented by engaging customer in online forums and by offering free after sales services. The new strategy could be sustained by establishing a strong a brand promise, strengthening the brand knowledge through thoughts, beliefs, images, positive experiences. Unique symbols, signs, and names were also used to impress the brand equity in customers’ minds.
References
Ailawadi, K. L., Lehmann, D. R., & Neslin, S. A. (2003). Revenue premium as an outcome measure of brand equity. Journal of Marketing, 67(4), 1-17.
Bhattacharya, C. B., & Sen, S. (2003). Consumer-company identification: A framework for understanding consumers’ relationships with companies. Journal of marketing, 67(2), 76-88.
Chaudhuri, A., & Holbrook, M. B. (2001). The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty. Journal of marketing, 65(2), 81-93.
Dahlén, M., Lange, F., & Smith, T. (2010). Marketing communications: a brand narrative approach. New York, USA: John Wiley & Sons.
De Chernatony, L., McDonald, M., & Wallace, E. (2010). Creating powerful brands. Routledge.
Delgado-Ballester, E., & Luis Munuera-Alemán, J. (2005). Does brand trust matter to brand equity?. Journal of product & brand management, 14(3), 187-196.
Heslop, L. A., & Nadeau, J. (2010). Branding MBA programs: The use of target market desired outcomes for effective brand positioning. Journal of Marketing for Higher Education, 20(1), 85-117.
Klink, R. R., & Smith, D. C. (2001). Threats to the external validity of brand extension research. Journal of marketing research, 38(3), 326-335.
McAlexander, J. H., Schouten, J. W., & Koenig, H. F. (2002). Building brand community. Journal of marketing, 66(1), 38-54.
Wood, L. (2000). Brands and brand equity: definition and management. Management decision, 38(9), 662-669.