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According to Smith Travel Research, the number of changes in brand affiliations in one year has grown tenfold since 1987.  In fact, the industry is averaging almost 1500 “switches” per year.  This is in addition to over 100 new brands being launched in the same ten year time frame.  Franchisee, franchisor, owners, and lenders, need to recognize the solution to discontentment with a “brand” provider can be very costly by just “switching” brands.  Likewise, picking the right brand can result in a better perception of your property, potentially more business and greater resale value.  Understanding the components of a brand strategy are essential to positioning your property to the market sector it serves and the clientele it will attract.

There are multiple components related to a brand strategy.  These include but are not limited to:  brand awareness; perceived quality; brand associations; assets; the name, symbol, and slogan; brand extensions; and, the way in which the brand is marketed.  It is important to understand each of these concepts plays a major role in an overall brand strategy.

Brand Equity - Brand equity is net result of all the positives and negatives linked to the brand.  Its name and symbols—that add value to, or subtract value from, the brand.  These assets include brand loyalty, name awareness, perceived quality, and associations.  In today’s corporate environment, the short-term tactics to produce more earnings frequently take precedent over the longer term brand equity building strategies.  Short-term activities (such as price promotions) can show dramatic results, while brand building activities (such as image advertising) may have little immediate impact.  The challenge is to balance these activities to provide needed business while adding “value.”

The “value” of brand equity can be based on the price premium that the name supports, the impact of the name on customer preference, the replacement cost of the brand, and the stock price and ultimately the resale value.

Brand Loyalty - The core of brand equity is the loyalty of its customer base—the degree to which customers are satisfied, have switching costs, like the brand, and are committed.  A loyal set of customers can have substantial value which is often underestimated.  They can reduce marketing costs, since a customer is much less costly to keep than to gain or regain.  Customers can create brand awareness and generate reassurance to new customers.  Loyal customers will also give you a “base” business which allows for maximizing revenue by shrinking the available inventory.

Brand Awareness - Don’t underestimate the power of brand awareness recognition and top-of-mind recall.  People like the recognizable.  Building awareness is much easier over a longer time-period because learning works better with repetition and reinforcement.  In fact, brands with the highest recall are generally older brands.  Event sponsorship, publicity, symbol exposure, and the use of brand extensions all can improve awareness.

Perceived Quality - Perceived quality pays off.  According to recent studies perceived quality (within your sector of the market), improves prices, market share, and ROI.  In addition, it was the top-named competitive advantage.  It provides a reason-to-buy, a point of differentiation, a price premium option, and a basis for brand extensions.  Price becomes a quality cue, especially when a product is difficult to evaluate objectively or when status is involved.  Other quality cues include the appearance of service people, public spaces and other first visible impression areas.

Brand Associations - A brand association is anything mentally linked to the brand.  An association can affect recall, provide a point of differentiation, provide a reason to buy, create positive attitudes and feelings, and serve as the basis for trial.  Overall quality ratings, technological leadership, newness and associations with customer benefits are the strongest.  The combination of all associations supports the price which can be charged.  The relative price position often is central.  Whether the brand is in the luxury, mid-price or budget, being at or near the top or bottom of the selected category is often most advantageous.

Brand Position - A successful brand position is usually based on three rules:  (1) Don’t try to be something you are not.  (2) Differentiate your brand from competitors.  (3) Provide associations that add value and/or provide a reason-to-buy.  A poorly executed promotion can send the signals that detract from a desired image and consequently hurt your ADR.  The marketing of your brand influences how it is “perceived” and thus ultimately its value.

Brand Name, and Symbols  -  The name, symbol, and slogan are critical to brand equity, and can be enormous assets, because they serve as indicators of the brand and thus are central to brand recognition and brand associations.

Good names should be easy to recall, suggest the “positioning,” support a symbol or logo, suggest desired brand associations, not suggest undesirable associations, and be easily recognized.  A symbol can create associations and feelings.  A symbol such as IBM or SONY that is based upon the name will have an edge in creating brand recognition.  A slogan should be tailored to a positioning strategy, and provide additional “value” to the brand.

Brand extensions such as “limited,” “express,” “suite,” etc., are one way to exploit brand equity and extend the name to different products.  An extension will have the best chance when the brand’s associations and/or perceived quality can provide a point of differentiation and advantage for the extension.  Extensions rarely work when the brand name has nothing to offer beyond brand awareness.  An extension should “fit” the brand.  There should be some link between the brand and the extension.  There should not be any meaningful negative association created by the brand extensions.  There is a risk that an extension will damage the core brand by weakening either its associations or its perceived quality.

The brand name and what it means combine to become the pivotal sustainable competitive advantage of a property  The name is pivotal because other bases of competition (such as product attributes) usually are relatively easy to match or exceed.  Further, customers often lack the ability or motivation to analyze the brand-choice decision.

Brand equity does not just happen.  Its creation, maintenance, and protection need to be actively managed.  Further, it involves strategic as well as tactical programs and policies.  The components of a brand strategy need to be orchestrated in a plan in which all the parts work together to achieve the synergy required to market a brand.  Planning requires every detail from the name, logo, graphics treatment to the detailed marketing plan be addressed.  It is important to be on target with the “positioning objective” and related advertising and promotional strategies.  With new brands clear positioning within the product category and in relationship to competitive product become an overriding factor.  Therefore, how the brand is portrayed—the actual name and “look” of the new brand take a preeminent position in the strategy.  Moreover, how markets creates the brand perception through its visual messages will influence the brands potential value.  Moving to a brand with an unplanned or poorly executed strategy will result in a lesser perception or confusion and may cause a negative conversion “dip” to be deep and prolonged.

Before switching brands or investing in a new one, recognize brand equity does not just happen.  Its creation, maintenance, and protection need to be actively managed.  Further, it involves strategic marketing, tactical programs, and corporate policies that nurture and protect the brand. How does your brand strategy rate?
 
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