Small businesses make up almost 97% of businesses in Australia, totalling approximately 2.4 million companies. A study of 367 Australian SMEs revealed that two marketing capabilities majorly influenced SME performance outcomes — innovation and branding. In the past, the perception was that branding was solely for big businesses with ample resources. However, increased competition has forced companies to look for new ways to remain competitive and grow their business, regardless of size.
SMEs face marketing challenges, often related to budget, skills and capacity. As a result, the dominant marketing approach has focused on product and price, using product marketing strategies and sales-oriented marketing activations, such as sales brochures.
Shifting from product marketing to brand marketing strategies, including building brand equity, has been shown to boost SME performance, increasing brand loyalty and product sales across the product lifecycle.
In this article, we discuss:
- What is the product lifecycle?
- What is brand equity, and how to build it?
- How brand equity sets up a framework to extend the product lifecycle.
What is the product lifecycle?
A product life cycle (PLC) is the time it takes from introducing a new product until the removal of the product from the market due to waning sales. The four stages of the PLC are — introduction, growth, maturity and decline. Some products move through the PLC quickly, i.e. fashion; others have a long lifecycle, i.e. heavy machinery.
Understanding the PLC helps organisations make decisions regarding advertising, pricing, new product development and branding.
What is brand equity?
Building a strong brand with brand equity provides financial rewards to your business. Brand equity consists of financial-based and perception-based brand equity.
Financial-based brand equity relates to the financial assets attributed to your brand, such as profits or market share; perception-based brand equity measures how employees, consumers and customers perceive your brand.
Source: Tasci, Asli, D.A. (2020)
How to build consumer-based brand equity
A common model outlining how to build customer-based brand equity (CBBE) is Keller’s CBBE model. Keller’s model shows the steps to form a positive relationship between a brand and its customers, emphasising that a customer’s attitudes and perceptions of a brand directly impact its success.
Using Kellers CBBE Model as a framework to prolong the product life cycle
Level 1: Brand Identity — Introduction phase of PLC
Your brand identity tells your customer who you are and what customer needs your brand satisfies. A strong brand identity means your brand remains top-of-mind, can be recalled or recognised easily and forms certain associations in your customer’s memory.
Brand identity can be further defined by:
- Brand identity breadth — how easily a customer can recall or recognise your brand and,
- Brand identity depth — how many purchase opportunities arise where your brand is top-of-mind.
When developing your brand identity, you need to plan both breadth and depth strategies.
Developing a clear brand identity is needed before the introduction phase of the product life cycle and to generate brand awareness.
Level 2: Brand Meaning – Growth stage of PLC
This level reveals what your brand means through brand performance and imagery. Brand performance covers a variety of factors beyond the features of a product.
In establishing brand meaning, your customers judge the performance of the brand:
- Does the product work in the way they want it to?
- Is there fast, efficient and caring customer service?
- Does the product look, feel and smell like expected?
- Does the price meet their expectations?
- Does the brand have unique IP or patents?
With brand imagery, the customer is looking for a brand that meets their psychological or social needs.
Customers want to know:
- Who else is using the product,
- When should the product be bought and used
- The personality and values of the brand
- The history of the brand
According to Keller’s model, you want brand associations to be strong, favourable and unique.
Customers evaluate the features and the psychological and social benefits of a brand.
Insights gathered during the growth stage of the brand life cycle (e.g. sales data and market research) help strengthen brand meaning and brand strategy approaches that take your product from growth to maturity in the product life cycle.
Level 3: Brand Response – Maturity phase of PLC
After discovering your brand, customers will judge, form responses and share how they think or feel about your product. Keller refers to a brand response being from either the “head” or the “heart”.
Brand response gauges how your customers feel about your brand and the social currency evoked by your brand.
Keller’s model highlights 6 important brand-response feelings
- Warmth — Warmth refers to soothing, calm feelings. Consumers may feel sentimental, warm-hearted, or affectionate about the brand, e.g. Campbells Chicken Noodle Soup
- Fun — Upbeat feelings such as amusement, light-heartedness, joy and playfulness, e.g. Kinder surprise
- Excitement — Does your brand make your customer feel energised, a sense of elation or “being alive”. e.g. Red Bull
- Security — Providing a feeling of safety, comfort, and self-assurance or eliminating worries or concerns for the customer, e.g. Volvo
- Social approval — What consumers feel when others look favourably on their appearance or behaviour due to their purchase decision, e.g. Electronic Vehicles
- Self-respect — Self-respect occurs when the brand makes consumers feel a sense of pride, accomplishment, or fulfilment, e.g. Rolex
Discovering how your customers feel about your brand and how their feelings form is an important part of branding strategy and helps your product stay in the maturity phase of the product life cycle.
Level 4: Brand Resonance – Delaying the decline process
Brand resonance reflects how strong and active your brand’s relationship is with customers, trade partners and other stakeholders.
You need to know if your customers are:
- Loyal – What is the frequency and depth of their purchasing habits?
- Attached – How strong is their personal attachment?
- Sense of community – Is there a brand community across stakeholders?
- Actively engaged with your brand – Are your customers actively engaged with your brand? Are they members of any clubs related to your brand? Do they engage over social media? Do they connect with your sales or customer service teams?
The final step of the model, brand relationships, focuses on how much your customers identify with your brand. According to Keller, you want your customer to feel “in sync” with your brand.
Using Keller’s model, building a strong foundation with level one and progressing through levels 2 and 3 leads to strong customer relationships and brand loyalty, contributing to brand equity.
Brand equity directly affects profit and sales volume. Customers are willing to pay more and buy more products from a brand with high brand equity, helping delay your product’s move from the mature to decline phase of the PLC.
Measuring brand equity
Each business decides how they measure brand equity. There are different schools of thought on measuring a brand’s financial value. Using operational data such as sales figures and emotional data such as consumer surveys will help determine if your brand equity is growing or declining over time.
Arresting brand equity decline
Some brands can become what are known as generic or category brands because they become synonymous with the product category their products represent e.g. Band-Aid. However, becoming a category brand can be both an asset and a liability as they may lose their unique personality and connection with customers.
Refreshing your brand to maintain brand equity
To identify whether change is necessary for your brand and where updates need to be made, ask yourself the following questions:
- Does the brand identity and language accurately still reflect corporate objectives?
- Is the brand strategy still relevant and resonating with customers?
- Do your stakeholders understand how they contribute to brand success?
- Are branding principles applied consistently across all customer touchpoints?
Shifting your focus from strictly product marketing and adopting brand marketing principles, including activations that build brand equity, will positively impact profit and sales volume, helping prolong the mature phase of your product lifecycle.
A branding strategy with a clearly outlined brand purpose, buying personas and customer-oriented messaging helps your business build equity in a brand that evokes emotion and builds trust and loyalty.
Viabrand® is your experienced Brisbane marketing team and branding agency. Our marketing team are expert in all areas of branding and marketing. Book a complimentary, no-obligation 30-minute call to learn more: https://calendly.com/viabrand/30min