This article provides a practical explanation of brand leadership. After reading, you will understand the basics of this powerful marketing tool.
What is Brand Leadership?
Brand leadership refers to the techniques and strategies that organisations use to market a product or service. Usually, the brand leader is a best-selling product or service and one that is recognised in a certain market segment.
A strong brand is a crucial strategic and financial indicator for the health of any organisation. It can take years for an organisation to build a strong brand identity and strategy to outmaneuver competitors. Differentiation through a competitive advantage is the most effective way to increase a brand’s impact and maximise its profitability.
Leading brands are identified as such when they are relevant, unique, and exciting. These brands stimulate customer loyalty and allow the organisation to charge higher prices than their competitors. The organisations behind these leading brands negotiate with business partners to strengthen their positions. They also take measures to more easily recruit and retain talented employees. Brand leadership offers organisations a clear strategic path for future growth, pushed by brands with above-average financial results and a market value that is greater than the book value.
The identity of a brand refers to the visual elements of a brand that identify it and set it apart in the minds of consumers. Brand identity is a crucial aspect of brand leadership; without a powerful brand identity, no brand can become a leader in its market segment. Brand identity is shaped by the message a product or service communicates to the consumer. This message must be consistent and create a bond of trust with its audience. This consistency is essential to retain a brand’s identity.
Branding is the bigger picture, and a strong brand identity is part of brand leadership. If you ask random people on the street what comes to their mind when they think of a yellow M, chances are that McDonald’s will be a frequent answer. This is what brand identity is all about.
Although they are important, whether a product or service will become a brand leader doesn’t depend on visible elements such as packaging, websites, clothing, print materials such as flyers. A product having the potential to become a brand leader comes from, to a large extent, the value proposition the product and the company offer customers.
A value proposition is essentially the value that a business offers to customers if they choose to buy the product. The value proposition can be defined as a statement of intent the brand makes to consumers by informing them about what the company stands for, how they work, and why the consumer should do business with them instead of their competitors. The reason for a consumer to buy from organisation X instead of organisation Y is called differentiation. Organisation X offers consumer something that organisation Y doesn’t. Differentiation is one of Michael Portner’s Generic Strategies.
A value proposition may apply to a product, a service, but also to an organisation as a whole or part of it. In brand leadership, the leading brand is generally the one that offers the most value to the consumer.
Tips to Become a Brand Leader
Building a strong brand, brand leadership, is best achieved by developing a reputation for knowledge and value. Becoming a brand leader in a market segment requires a lot of time and effort.
One way to take a brand to the top is by participating in public events. Here you can tell the audience what makes a certain brand so unique and valuable. For example, think of workshops and conferences. It’s important to do this in an environment where the brand is recognised. It has to be relevant to the industry.
Brand leadership is also about creating a community. In general, audiences like a brand that gives something back to a community, a sense of being part of something. Communities can be most easily created in niche markets. Building a community is about the value proposition as well. Sharing knowledge in a blog, for instance, or keeping in touch with customers through social media are effective ways to create a community.
An important tip for building a brand is not to be too modest. When it comes to personal relationships, modesty can be a virtue, but for brands it’s important that value is recognised by a wider audience. If a startup is rewarded with a business award, they should announce this to media via press statements. The award should also be accepted with elan, it’s publicity after all.
Advantages of Strong Brand Leadership
Having a high position in the market segment has a lot of advantages for an organisation.
Awareness and Recognition
A brand leader’s strength is that people are so familiar with it that people automatically think of the brand when they see a certain symbol or word. It also means that when a customer is looking for a certain product or service, they will automatically think of a specific organisation. Generally speaking, consumers are quicker to choose a product or service they’re familiar with.
Brand recognition and the value that a product offers increases customer loyalty. Customers become attached to brands that share their values. Customer loyalty can be very strong and last a lifetime. In some cases, it’s even passed on to new generations.
Market Share & Introduction of New Products
Having a strong brand and a high position in the market segment also has the advantage of it being easier and cheaper to test and launch new products. If customers are loyal and the value that is being offered is good, customers will generally be interested in new products.
Admiration and Competitive Advantage
A brand differentiates itself from others through the value proposition. When customers recognise a brand and support it, it helps the organisation gain an advantage over the competition. The more a company receives recognition and admiration for a brand, the faster the brand will climb in the statistics and the more competitive it will be compared to other brands.
Now it’s your turn
What do you think? Are you familiar with this explanation of brand leadership? What do you believe are crucial steps towards becoming a brand leader? What’s the value proposition and brand identity of some of the brands in your immediate environment? Do you have anything else to add?
Share your experience and knowledge in the comments box below.
- Aaker, D. A., & Joachimsthaler, E. (2012). Brand leadership. Simon and Schuster.
- Bedbury, S. (2003). A new brand world: 8 principles for achieving brand leadership in the 21st century. Penguin.
- Wileman, A., & Jary, M. (1997). Retail power plays: From trading to brand leadership. Basingstoke: Macmillan.
- Beverland, M., Napoli, J., & Lindgreen, A. (2007). Industrial global brand leadership: A capabilities view. Industrial Marketing Management, 36(8), 1082-1093.
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