Marketing Strategy and Competitive Positioning pdf ebook

Brands are difficult to build – the leverage highlighted previously for the Tiger Woods 
brand was not built overnight. It was built over many years, and the same is true for 
successful and profitable commercial brands.
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Brands add value for customers – in most taste tests where products are unknown to the 
tasters, consumers tend to prefer Pepsi to Coca-Cola. However, when tasters are aware 
of the drinks they are tasting, then more prefer Coca-Cola than Pepsi. Hence, soft drink 
preferences are based on brand image and not just taste.
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Brands create defensible competitive positions – during periods of supermarket price 
competition, it is not uncommon to see huge discounting on products such as baked 
beans, with own-label baked beans often being priced as low as 3 pence a can. It is inter-
esting to note that during these periods of discounting, Heinz customers are very loyal 
indeed and continue to purchase Heinz regardless of the much cheaper alternatives. Even 
though these brand-loyal customers are happy to pay around nine times as much as other 
makes, Heinz has, in the past, been able to actually increase its prices during periods of 
heavy price competition.

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CREATING AND EXPLOITING MARKETING ASSETS
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Brands build customer retention – research sponsored by the US Coalition for Brand 
Equity shows that brand loyalty makes customers less sensitive to competitors’ promo-
tions and more likely to try new products and services from that brand. A study of 400 
brands over eight years by Information Resources found that with successful brands, 30 
per cent of the sales increase attributable to new advertising came from new customers, 
but 70 per cent came from the increased loyalty of existing customers (Kanner, 1996).
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