Retail Branding Term Paper

Pages: 60 (16085 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Business - Advertising

Internationalization of Branding in the Retail Industry

In the past few decades, issues surrounding branding in the retail industry have emerged as a significant concern for retailers, consumers, and the fashion industry alike. Organizations are using branding as a strategy tool in today's business environment with increasing regularity. Although brands and branding are not new ideas, retailers are applying them to more diverse settings where the role of branding is becoming increasingly important (Wentz & Suchard, 1993). The traditional role for brands has recently reemerged as a topic of interest, as retailers are increasingly turning toward the internationalization of brands to survive in the highly competitive industry. With the growing realization that brands are one of a retailer's most valuable intangible assets, branding has emerged as a top management priority in the last decade. As a result of its highly competitive nature, branding carries a significant effect in the retailing industry as one of the main drivers influencing customer perceptions, store choice and loyalty. Thus, as an attempt to offer more to the consumer than just low prices, retailers are developing marketing strategies that build store equity and differentiate their brand.

A brand's most valuable asset is usually the name itself, as a name can have inherent selling power when the word or words stand for explaining the uniqueness of the product or service. However, this name value is not as important as the enormous power of those brands that have built equity after decades of consistent brand-building activities. Research involving the practical limits of line extensions leads to a contrast between those new product efforts that re-invest brand equity and those that dilute it. Furthermore, promotions can both build and destroy brand equity. Promotions can be used to build brand equity if the promotional activities enhance and reinforce the basic brand image.

A review of the related literature reveals that there are two kinds of consistency that are both important for brands, consistency from year to year, and consistency across all communications. For example, if a brand changes its personality every few years, it runs the risk of having no image at all.

Additionally, certain user groups and market segments carry more significance and impact than others. Consumers with developing or changeable brand images are highly important. This translates in many cases into pursuit of the young, in hopes of securing a long-term predisposition toward a brand, which if successful, can remain successful for many years. Often overlooked is the fact that brand owners should be loyal to their customers, because consumers will buy and re-buy only those brands that continue to live up to their value perceptions. One of the most highly competitive and dynamic marketing environments today is the retail industry. The historic retail world that previously consisted of the traditional central shopping district of most American cities has been replaced by mega malls. The competition has increased as many once profitable retailers are now facing bankruptcy. For example, Wal-Mart is the world's largest retailer that is making significant strides to move into global markets.

Other retailers have moved into global markets, as the internationalization of brands has become a promising new trend. As a result, in order to succeed, survive, and generate high revenues, retailers today need a solid strategic plan, a competitive advantage, and a unique product assortment. This paper will examine all aspects of branding in the retail industry, and will examine the companies of Perry Ellis International and Levi Strauss as leaders in the retail industry and the internationalization of brands. Retail branding has received a significant amount of new attention since the late 1990s. A number of leading retailers have embraced branding, however there are various issues that have arisen, such as the internationalization of brands. Internationalization has for many retailers been a key strategy of recent years. This paper closely examines branding, retailing and internationalization, raising issues concerning the interaction of these interlinked areas and future research in this area.

Introduction

In the past few decades, issues surrounding branding in the retail industry have emerged as a significant concern for retailers, consumers, and the fashion industry alike. Organizations are using branding as a strategy tool in today's business environment with increasing regularity. Although brands and branding are not new ideas, retailers are applying them to more diverse settings where the role of branding is becoming increasingly important (Wentz & Suchard, 1993). The traditional role for brands has recently reemerged as a topic of interest, as retailers are increasingly turning toward the internationalization of brands to survive in the highly competitive industry. With the growing realization that brands are one of a retailer's most valuable intangible assets, branding has emerged as a top management priority in the last decade. As a result of its highly competitive nature, branding carries a significant effect in the retailing industry as one of the main drivers influencing customer perceptions, store choice and loyalty. Thus, as an attempt to offer more to the consumer than just low prices, retailers are developing marketing strategies that build store equity and differentiate their brand.

A brand is usually defined as a name, symbol, design, or some combination that identifies the product of a particular organization as having a substantial, differentiated advantage (O'Malley, 1991). Research studies reveal that a brand often suggests the best choice, while others view a brand as something the customer knows and will react to (Ginden, 1993). A brand's purpose is to build the product's image, which will in turn influence the perceived worth of the product and will increase the brand's value to the customer, resulting in the desired brand loyalty. In the retail industry, brands are developed to attract and keep customers by promoting value, image, prestige, or lifestyle. By using a particular brand, a consumer can cement a positive image (Ginden, 1993). Brands additionally function to reduce the risk consumers face when buying an unfamiliar product.

Since branding is a technique to build a sustainable, differential advantage by playing on the nature of human beings, it remains in the retailers' best interest to generate a successful brand. A good brand will give the customer value for the dollar and give employees the satisfaction and confidence in their products (O'Malley, 1991). Strong branding also accelerates market awareness and acceptance of new products entering the market. A retail brand identifies the goods and services of a retailer and differentiates them from those of competitors. A retailer's brand equity is exhibited in consumers responding more favorably to its marketing actions than they do to competing retailers (Keller 2003). As a result, the image of the retailer in the minds of consumers is the basis of this brand equity.

Consumer products companies also currently face several challenges involving sales, as major retail accounts are consolidating and continue to exercise their increasing buying power. All accounts seem to be more demanding, and are actively working with everything from shopper cards to high-quality captive label products to shift the consumer's loyalty from manufacturer brands to theirs (Booz Allen Marketing, 2005). Perhaps more significantly, acquisitions and expansion no longer stop at country borders; large retailers have become more sophisticated. In response, many consumer product companies have reorganized their sales forces and introduced customer teams (Booz Allen Marketing, 2005). To date, these retailers have continued to buy locally, but it likely will not belong before they figure out how to leverage their global scale with suppliers (Booz Allen Marketing, 2005).

Some retailers have found that the transition away from a purely regional sales structure was simply harder than expected. However, a review of the related literature reveals that even companies who began the transition several years ago usually cannot point to the specific benefits they receive from their customer team structures (Booz Allen Marketing, 2005). Frequently they have adjusted their organizational models over time, but are left with a sense that each problem they solved created another problem somewhere else (Booz Allen Marketing, 2005). As a result, multiple conflicts arise between brands and channels that cannot be resolved without senior management intervention. According to a recent marketing analysis, the all-powerful brand structure favored by many consumer goods companies may be guilty as well. In today's environment of powerful retail partners, the role, focus and capabilities of the sales force need to be upgraded in order to allow sales management to interact with marketing on a more level playing field (Booz Allen Marketing, 2005).

Background of Retail Branding

Historical research indicates that branding is over 100 years old, as the majority of countries had enacted trademark laws to establish the legality of a protected asset by 1890 (The Economist, 1988). Historians note the period from 1800 through 1925 as the richest period of name-giving (Hambleton, 1987). From these beginnings, branding has evolved as a major component of marketing strategy, with uses and applications that continue to grow and diversify. Although the focus of branding has shifted over the last two decades, its importance to the business community and the consumer has not diminished… [END OF PREVIEW]

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