Question 1: The marketing advantages of strong brands
There are many definitions of a strong brand, but in general it is assumed that a ‘strong brand’, or a brand with high ‘equity’, provides advantages to the brand’s owner (Wood 2000). These advantages allow the opportunity to charge consumers a premium price. Also, the product range of a strong brand can be extended (Spiggle, Nguyen and Caravella 2012). But moreover, a strong brand is less likely to be the victim of hostile competitive marketing activities (Wood 2000). Therefore, Tiwari (2010) argues that, a brand can be considered as a present asset and a relatively stable future cash flow. The marketing advantages of strong brands will be discussed according to the order of the 4Ps of marketing. The 4Ps comprise Product, Pricing, Place and Promotional marketing activities. The marketing advantages for strong brands in terms of the product are numerous. First of all, consumers perceive a higher degree of quality from strong brands in comparison to weak brands (Feinberg, Kahn and McAlister 1992). Strong brands are easier to recognize than unknown brands for the consumer and as a result, strong brands are often included in the choice set to reduce the perceived risk consumers might experience when dealing with uncertainty due to lack of prior knowledge of the product category. Hoyer and Brown (1990), argue that brand recognition in situations like these might be the strongest cue for making a purchase decision. Equally important, strong brands often experience more success from brand extensions. Not only are strong brands less vulnerable to negative perception of the extended product, the ‘halo effect’, the positive associations with the parent brand, often influence consumers’ opinions about the newly introduced brand extension. The parent brand could be considered to be the flagship brand and is highly resistant to dilution of other potential negative effects due to negative experiences with an extension (Roedder, Loken and Joiner 1998). As a result of the aforementioned perceived quality, strong brands are less vulnerable to low-pricing strategies of competitors. According to Kent and Allen, (1994) consumers are willing to pay a price premium for a strong brand. However, once a consumer has learned about a brand, “it is more difficult to change how the consumer thinks about that brand” (Hoeffler and Keller 2003 p. 435). An illustration is provided by Krishnamurthi and Raj (1991), they state that brand loyal households are influenced little by price sensitivity. Tellis (1988) argues that strong brands receive more attention, comprehension and retention from consumers in comparison to weaker brands. Kent and Allen (1994) support this position and add that consumers indeed pay more selective attention to advertising for well-known brands. Whereas repetitive advertising for weak brands is considered to have negative effects, strong brands, on the opposite, do not experience any negative effects from repetition (Calder and Sternthal 1980). In the same way as consumers perceive higher quality from strong brands, retailers that want to be perceived as high-quality retailers, will want to include strong brands in their product offerings (Montgomery 1975). A strong brand is a brand that people know about, i.e. brand awareness. Marketing activities related to strong brands are different from marketing activities relating to new or unknown brands. Therefore, the researcher will assume that the objectives that brand managers of a strong brand have, may deviate from the objectives of brand managers of an unknown brand. Consumers have many brand associations in their brains when it comes to strong brands. “Brand associations may also vary in their level of abstraction, ranging from concrete and specific (for example, product attributes) to more abstract and general (for example, overall brand attitudes)” associations (Hoeffler and Keller 2003 p. 422). Hoeffler and Keller (2003)...
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