Analysis of various concepts of branding
A brand is a name, design, symbol or a term that is used by the seller for the unique identification of its product or services in the market so as to differentiate it from the products or services of other sellers in the market. In the present case the concepts of brand community, brand loyalty and brand equity are analysed as these concepts are closely connected with the brand management system of any organisation. However, with the creation of brand communities with its customers, the company has to face the risk of brand hijacking throughout the life of its product.
Relevant Branding Theories
Strategic brand management of a company mainly comprises of various branding theories which ultimately leads to creating brand equity for the firm. These theories are:
This theory is directly related to the success or downfall of the brand in the international markets. When the company decides its target market it needs to draw the basis to position its market by defining clearly the points of parity and differences.
This theory reveals the companies relevant ways to maintain sound relationships with its customers.
This theory sets out the trade-mark tools that help the firms to create unique identification of brand in the market from the rivalry firms.
The value added by a company from the goodwill that has been achieved by it over a considerable period of time and unique recognition of its products and services is called as the brand equity (Aaker & Biel, 2013).
1.Brand Community and its used to enhance brand equity
One of the key concepts of branding is the creation of brand communities in the market. Brand community constitutes tools like innovation management, customer relationship management and other highly valuable marketing techniques. Communities are often formed by the persons who have common beliefs and opinion for a particular thing or idea. The brand communities are majorly classified in two categories i.e. online brand communities and offline brand communities (real-life communities). There can be various forms of these communities such as small or large ones, temporary, permanent, static or periodic or customer initiated or firm initiated. Online communities are formed using the platform of social media such as social networking websites. The said communities are usually formed by the appraisers of a particular brand or a company itself. Also, these communities provide the significant platforms for millions of consumers across the world to connect as well as exchange their individual ideas, opinions and other valuable and relevant information (Francisco, López, Anaya, Aguilar & Molinillo, 2015). These are created on the specific website of a brand. The main reason why people are adopting these brand communities is that they wish to share their ideas and opinions with the other admirers of the concerned brand and the actual interaction between the members also attracts them towards formulation of such communities. Offline communities are however those communities that are formed by the people in the real world and they are not formed on the virtual platform. These communities help the firm in building effective connection between the users of brand and the brand owner. One of the major advantage of building online brand community is to allow the individuals from across the world to interact with the other individuals who possess common believes and idea in regards to a particular product or service. These communities provide the most effective medium to the markets to achieve success of the brand in which they are dealing. The rapid rise of information technology in the recent era has allowed the companies to market its products and services in the innovative ways so that it can maximise its customer base. Online brand communities have the key potential to represent itself as the prime marketing instrument. The internet marketers are looking forward to these OBCs as the strongest business opportunities as it will enable them to influence the purchasing behaviour of the customers worldwide (Belk, 2010). Also, it enables the companies to entertain and value the beliefs and opinion of their customers. Through the internet mediated brand communities, the brand owners can exchange the relevant knowledge and facts about the uniqueness of the products that they are dealing or marketing in and also it can allow the brand admirers to show their passion about the particular brand and the desired performance in terms of quality and satisfaction to the brand owners to that they can maintain their standards and wherever required, improve them up to the satisfaction and expectation of the brand followers.
Figure 1: Nutella's Consumer Relationship Management
2.Key marketing strategies that Nutella implemented to build its brand community
In the modern world, the ever increasing competition between the businesses has drastically enhanced the value of branding of different products and services. The intense completion in the market has resulted in the changed buying behaviours and the manner in which consumers undertake their purchase related decisions. Due to this fact, the brand has not only been recognised as the important asset for any company but also it has persuaded the marketers to form such strategies that enhance the strong brand equity for their products. Brand equity is the brand’s total value, considering it as a separate asset. It is the total value of assets and liabilities that are directly attached to a particular brand name or sign (Burger, 2012). It is quite important for the brand owners to maintain its equity in the market through various strategies such as formation of specialised brand communities on the virtual base using different social networking sites such as: Facebook, twitter etc. These communities not only enhance the market share of any particular brand but also it increases the overall value of the product’s brand in the market (Medium, 2017). The brand which has positive and strong brand equity is capable of charging more price than the actual price in the market (Gunawardane. 2015). The brand communities facilitates the brand owners to show their followers that they respect and encourage their ideas and opinions and they always strive to provide them the maximum level of desired results(Keller, Parameswaran & Jacob, 2011). With the due advantages of social networking, brand management has become quite convenient with less financial cost and less time consumption.
In the integrated system of marketing communication, brand communities are considered as the most powerful tool. Nutella is recognised as the most renowned brand for the sweetened cocoa spread as manufactured by and Italian company. The formed brand stimulus Nutella is boasted by a strong, lively and crowded brand community on the virtual platform. The name of the online brand community of Nutella is Nutellaville (Myers, 2017). The said brand community is quite effective in context of contribution, commonality as well as complementarity with the integrated marketing communication system. The image of the said brand within its online community is collective set of various mental associations that are overlapping the other communication tools i.e. commonality as well as the new mental associations i.e. complementarity which are referred as the dimensions of brand image. As nutella has been in existence since more than 50 years it has already build a huge fan base from all over the world (Nutella. 2015). It is has become one of the most commonly recognised brand in the national as well as market. It has reached the threshold of becoming the national obessesion from being the simplest edible item with the use of effective marketing strategies. The popularity of the brand has grown so rapidly and steadily since its existence though the formulation of powerful branding strategies. The major strategies that enabled nutella to become the favourite brand of millions of its users are:
Focus on the breakfast market
When nutella entered the U.S. market, it branded itself as the suitable substitute of various products such as chocolate, frosting stuff, jam etc. It has influenced the people from all over the world to use it in several different ways. In year 2009, it initiated focussing purely on its branding to become the most commonly identified breakfast staple that is generally put on toast or waffles. This was the move that facilitated the consumers in understanding its best use.
Figure 2: Various consumption ways of Nutella
Tapping into a desire that is universal
This was the second marketing and branding strategy. However, it proved out be controversial. It has started marketing itself to be considered as an important part of a nutritious and healthy diet. Though the company had never expressly claimed its product i.e. the hazelnut spread to be a healthy edible item but still the company has deliberately branded the chocolate spread to be related to the balanced diet. This branding strategy was so cleverly executed by nutella that it made the Ferrero which is its parent company to change their advertisements and settle for a law suit against nutella for 3 Million in the case of issuing deceptive advertisements.
Capitalisation on social platform
When the nutella’s product entered into the homes of various consumers, the company started sharing innovative ideas and usage of their chocolate spread through the use of social media. The social proof served the company to convince the existing and potential customers about the product’s value in terms of quality and level of satisfaction. The formation of online brand community has allowed the owner of brand to use the pages of social media to embrace its engagement with its customers. The strategy of nutella to grow its foundations of its admirers into the thrall of its fan group by being intensely focused on the social media efforts can be observed through various networking sites (Walter, 2018). These efforts helped the company to prove that its products are more than the mere breakfast item.
These were the three prime strategies that were used by Nutella to create its brand community so as to achieve the ultimate success of its products. Moreover, the companies which are using the customer centric approach to operate their very business are not required to invest huge sums of money to identify and attract new customers. When they stay in touch with their brand communities they are not required to carry out intense researches to identify what their customer want. The brand loyalty has been achieved so far by the company through its consistent efforts towards building the best relationships with their customers (Vozza, 2014).
Figure 3: Nutella's Fan Page on Social Media
3.Risks for Nutella in using customer empowerment" approach to creating a brand community
It has been realised by far that the development of advanced information technologies has facilitated the brand management system of any organisation with the most economic and time efficient ways to reach and interact with their customers. However, it is still necessary for the companies to choose the best suitable brand community of its customers and focus on cultivating the interaction with their customers and stay closed with the social engagement. Brand communities are the main form of consumer communities as formed by the brand owner so as to adopt the customer empowerment approach. It allows the customers control the variables that predetermined by the marketers. This approach is primarily focused on maintaining best relationships between the brand owner and brand customer. This approach allows the company to share various kinds of concepts, ideas and believes with their customer about the products that are dealt by the company so that they can stay tuned with their customers. Also, it allows the brand owners to know more about the expectations and passion of their brand followers. Nutella takes into account each consideration relating to its consumers and their tastes and preferences. Their prime brand management is achieved through maintaining the brand loyalty for its ultimate consumers (Vision Critical, 2018). However, there are various risks associated with the customer empowerment approach for creating the brand community. Too much concentration on branding can make the company lose its control over its brand which is replaced by the consumer group who tries to re-appropriate it. Nutella might have to face its brand’s hijack which occurs when the customers takes away the brand of any company from its marketing experts to increase its evolution. This approach might lead to diversion of company’s key focus over profitability. The ultimate objective of Nutella’s existence is the achievement of desired level of profitability. However, if the company remains focused on its customers and fulfilling their expectations, it is quite possible that it might lose its focus on its prime goal of achieving profitability position. If only customer empowerment approach is used by Nutella to promote or maintain its product’s brand in the market, the company may not be able to focus on building and maintaining sound and effective relationship with the retail vendors of its product.
It is quite necessary for the company to keep proper interaction with the dealers of its product in the market so as to analyse and assess the demand of chocolate spread. Therefore, the company must also make adequate amount of efforts to maintain a b2b brand community along with the consumer community. The company must make further initiatives to participate more in the brand communities so that it can stay stunned with the demands and preferences of its existing as well as potential customers.
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