BRANDING POSITIONING AND DIFFERENTIATION FOR MAXIMUM COMPETITIVE ADVANTAGE
1.1 INTRODUCTION TO THE STUDY
Brand positioning strategies aim to establish a distinctive identity and position for its products and services, and to ensure that both the product and the organization produce value that exceeds that of their competitors (Ind, 2007). A brand positioning plan can produce added value for the company, implement its vision, and establish a distinct market position. Additionally, it enables the firm to exploit its tangible and intangible assets further. There are two extreme levels of endorsement by the parent brand: First, the uniformity model, which positions and profiles both the corporate level and the business units. Second, the variety model in which business units are distinct from the enterprise level (Van Riel and Bruggen, 2002). Van Riel and Bruggen (2002) described brand positioning strategy as a methodically planned and executed procedure for establishing and sustaining a positive reputation. In addition, they stated that the brand positioning was achieved through delivering signals to stakeholders using the brand’s core aspects. Several elements influence the brand positioning strategy formulation. When selecting a branding strategy, it is important to consider corporate strategy, the business model, organizational culture, the rate of innovation, the added-value lever, available resources, and the brand vision (Kapferer, 2008). Strategic branding is essential to a business because it takes into account fundamental changes in the environment, making firms proactive as opposed to reactive. A consumer should be able to quickly recognize the brand for a specific need or want. Target consumer, major competitors, point of similarity with rivals, and point of differentiation with competitors are therefore of highest importance for successful brand positioning for businesses. (Bett, 2005). 4 As previously said, there are a number of aspects that influence the effectiveness of a brand positioning strategy when the organization’s strategists select brand positioning as a source of competitive advantage for the parent company and for achieving other organizational objectives. Although brand positioning strategy can be advantageous, if not handled correctly and completely, it might backfire on a firm; therefore, a holistic approach is required to evaluate the brand positioning strategy’s performance (Kapferer, 2008).
Competitive advantage refers to a company’s capacity to attain market dominance (Evans and Lindsay, 2011). This concept is the foundation of strategic management, since every firm seeks a vantage position that will provide a competitive advantage over the competition. Porter developed a framework that represents the influence of five influences on an industry (Porter, 2005). According to his recommendation, a strategic business manager looking to get a competitive advantage over rivals might use this model to better comprehend the operating environment of the company. Achieving a cost advantage over competitors is one method of establishing a competitive edge; product differentiation is another method (Porter, 2005). Product distinction by itself will be of little value unless the achieved differentiation attracts and captivates buyers’ imaginations. If the client is to be fully satisfied, their requirements and desires must be ingrained in the entire process from customer surveys through design, production, distribution, and use (Evans and Lindsay, 2011). Peteraf (2003) defines competitive advantage as sustained returns that are higher than average. According to Barney (2002), a firm enjoys competitive advantages when its actions in an industry or market provide economic value and when few rival firms engage in similar behaviors. Barney then links competitive advantage to branding, stating that organizations get a competitive edge when they reposition their Branding strategy. Cool (2003) echoes Barney (2002) in stating that a competitive advantage cannot be achieved through freely transferable assets. From the preceding talks by various authors, it is clear that competitive advantage implies that a company has more profits than its competitors and/or offers superior products and/or services to the market.
Despite the circumstances, brand extensions remain appealing to businesses because they allow them to capitalize on the parent brand’s equity. Essentially, utilizing a strong parent brand helps mitigate the risks associated with bringing a brand extension to a new or existing market. One of the most significant disadvantages of competitive differentiation through brand extensions is that each brand extension promises to be new, larger, or better. However, in the majority of instances, competitive differentiation is achieved by providing consumers with a value that exceeds their expectations (Albert et al. 2008). In the pursuit of differentiation, the majority of brand extensions grow excessively similar to one another, so stifling competitive differentiation (McGovern&Moon, 2007). Therefore, many businesses achieve commoditization by including new features into their brand extensions. In these conditions, brand positioning has become the major differentiator among competitors. To ensure a consistent positioning strategy for brand extensions, brand managers must make crucial strategic decisions that have a significant impact on the parent brand and the brand extension. To aid in making these choices, we will first discuss the procedures for building an effective positioning strategy and the many types of brand positioning strategies. In addition, we will examine brand extensions and competitive differentiation-related challenges in depth. We provide brand managers with a comprehensive guide for finding and building brand positioning bases for brand expansions by adapting the brand positioning framework to brand extensions.
Established food companies, such as Kellogg’s or McDonald’s, are in jeopardy of losing market share as a result of fundamental shifts in traditional eating patterns and the shift toward healthier food options (Buchter, 2015). Concurrently, the fluctuating demand creates opportunity for new food entrepreneurs, who shape the market to an increasing degree. Between 2011 and 2015, huge food corporations on the American market reportedly lost $18 billion to smaller competitors with yearly revenues below $5 billion (Daneshkhu & Whipp, 2016). As new niche companies join the market and retail shelves, the age-old maxim “larger is better” is becoming increasingly outdated (Neeley & Potter, 2015, p.4). In the current market structure, established food companies are deemed too conservative to launch radically new products and play the function of “a market searcher rather than a market producer” (Khan et al, 2013, p.29-30). Entrepreneurs are increasingly generating truly creative, scientifically-based food solutions with more nutritional value and reduced environmental impact (The Economist, 2015). In the context of creative food development, knowledge-based entrepreneurs engaged in “the economic exploitation of science-based knowledge” (Burger-Helmchen, 2008, p.95) are of special importance. However, a new technological innovation does not automatically result in new customer value and a commercially successful product (Sawhney, Wolcott & Arroniz, 2011). To commercialize a new food innovation, it is essential to establish a strong brand and a distinct market position, according to experts (Khan et al, 2013; Mark-Herbert, 2004). Especially in the saturated food industry with typically short 2 product life-cycles (Costa & Jongen, 2006), a poorly branded product without a clear purpose would struggle to reach the shelves or will soon perish. When a brand is created, it must identify its “place” on the market and in the minds of its intended consumers. This indicates that consumers must comprehend for whom, why, and what the brand is relevant, as well as who it competes against (Kapferer, 2012, p.153). Positioning a brand is the process of answering these questions (p.153). As defined by Kapferer (2012, p.152), “positioning a brand” entails emphasizing the features that distinguish it from its competitors and make it desirable to the public. These distinguishing features may be based on tangible or intangible product characteristics (Keller & Lehmann, 2006). Moreover, a fresh, inside-out view on positioning emphasizes the significance of the brand’s identity in this setting (Kapferer, 2012; Riezebos & van der Grinten, 2012; Urde, Baumgarth & Merrilees, 2011). While “positioning is focused on the competitors” (p.154), brand identity provides a sustained source of difference in the form of the “brand’s distinctiveness and value” (Kapferer, 2012, p.149). Recent study by Urde and Koch (2014) has developed five distinct positioning schools along a continuum between market- and brand-oriented brand positioning. In this context, they emphasize that entrepreneurs can leverage innovation to establish their brand in uncontested market space.
1.2 DESCRIPTION OF THE PROBLEM
Numerous research studies on brand positioning strategy have not focused on the relationship and interaction between specific factors and their association with competitive advantage success and failure. Additional study is required to discover the characteristics that firms should consider in their brand positioning strategy and the factors that contribute to competitive advantage. Consequently, there is a compelling need to define the brand positioning strategy firms adopt to obtain a competitive edge. On the basis of the above data, it is necessary to investigate brand positioning strategies and competitive advantage.
1.3 OBJECTIVE OF THE RESEARCH
This study’s primary objective is to determine the effect of brand positioning as a competitive advantage on firms’ rivalry. Specifically, the study aims to:
1. specify the brand positioning techniques utilized by the firm.
2. to determine the relationship between brand positioning tactics and the achievement of competitive advantage
Determine the impact that entrepreneurial identity plays in brand positioning
Determine the impact of brand positioning on the output percentage of the organization.
BRANDING POSITIONING AND DIFFERENTIATION FOR MAXIMUM COMPETITIVE ADVANTAGE