The debate over the strategic role of the brand has often revolved around the myriad challenges that brand managers face in today’s competitive context. Examples range from the growing power of distribution to the greater awareness and price sensitivity of consumers, from attacks on the ideological front, to the fragmentation of communication channels (both old and new), to the aggressiveness of low-cost competitors.
And just as often, these challenges, which are undeniably daunting, lead to envisioning scenarios with the brand becoming a less essential element of a company’s competitive advantage. But these scenarios are contradicted time and time again by consumer choices and by the steady rise in the number of market players who are turning time and time again to brand strategies to shore up their competitive position and grow their profit margins.
In this new century, the evolution of the social and economic environment is an emphatic reminder of the central role the brand plays in the value creation process. Because it is a trust-based resource, and an essential component of competitive advantage, the brand is gradually moving to the fore once again in enabling companies to properly manage market relations. This in a context currently marked by growing intangibility and constantly incrementing flexibility as far as production, communication, and relationships.
In their recent book entitled “La marca. Costruzione, sviluppo, valutazione” [Building, Developing and Evaluating the Brand], authors Bruno Busacca, Giuseppe Bertoli and Maria Carmela Ostillio, offer a comprehensive overview of the renewed role of the brand in corporate growth strategies.
We met with the authors to ask them to tell us about some of the key takeaways from their book.
Why do you talk about the renewed centrality of the brand in your book? And what does this mean for consumers and for companies?
We can’t help but see brands; we notice them on display in shop windows or on the shelves of big box stores; we find them in countless websites - consumers interface with brands more than ever before. The brand has become an integral part of daily life for nearly everyone, because it can simplify our choices; it promises some particular benefit (functional, psycho-social, experiential); and it elicits trust. To put it very simply, every time a consumer has to choose between two competing products, the brand comes into play in a powerful way. As a result, corporate executives are realizing that their brand is one of their most valuable assets (often the most valuable), and at the same time, a useful business tool. This explains why more and more companies are getting branded, even in industries where products are traditionally unbranded. But the reason for creating a brand isn’t simply for the fun of having one, but instead to succeed in leveraging the brand to grow the business while continuously measuring up against the competition.
Why is brand identity and the distinctive features of a brand important in the current business context?
The critical challenge that brands are facing more than ever before is to find an identity that is unique and culturally topical. Offering good products, guaranteeing efficient service, being socially responsible – these are all fundamental, a necessary – but no longer sufficient – condition for competing in today’s market. There are plenty of good products out there, and plenty more companies that are vying for consumer preference. Even the competitive advantage that springs from innovation ensures no more than a temporary reprieve from the threats of rival companies.
It’s brand identity – if it’s powerful and unique – that will thwart any attempt at cloning. Identity encompasses the brand vision; it drives product development, the choice of distinctive traits, communication strategies and other brand management decisions. At an operational level, the expression of brand identity is activated by designing and utilizing distinctive systems of signs, both consolidated ones (names, places, symbols, slogans, jingles and packaging) and signs linked to digital transformation (avatars, hashtags and NFTs – the keys to launching the brand into the metaverse).
One chapter of the book is all about brand management over time and in space. What are the main tools that companies should use here?
Time passes, and brands have to contend with continual changes in the relationship between supply and demand. The evolution of consumer behavior, technologies, the actions of competitors, business regulations and other factors can shape the destiny of a brand in powerful ways. Added to this is the fact that the company may rethink its business strategy and decide to redraw the perimeter of the business and/or change the strategic direction. All this means that the company has to modify marketing and the methods for commercializing products. Beyond internationalization, effective brand management calls for an approach that focuses on safeguarding (and hopefully enhancing) the brand through reinforcement or revitalization strategies. Along with these, companies can modify their brand mix by using evolutionary or revolutionary rebranding strategies, or brand migration, or in some cases, by dispensing with the brand altogether.