BS3989A Strategic Brand Management PDF

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Strategic Brand Management Strategic Brand Audit BS3989A Word Count: 3200

Rosie McGee 1604418

Contents

PART 1 Introduction Introduction to assignment …………………………………………………...Page 2 Brand Issues and Marketplace..……………………………………………...Page 2-4

Part 2 Analysis of Superdry Target Market...………………………………………………………………...Page 4 Points of Parity/Differences…………………………………………………..Page 4-5 CBBE/Brand Positioning….........…………………………………………….Page 5 Brand Resonance Model....………………………………………………….Page 5-6 Brand Elements……………………………………………………………….Page 6 Brand Perception……………………………………………………………..Page 7 Brand Identity Prism………………………………………………………….Page 8-10 Brand Architecture Strategy………………………………………………....Page 10 Brand Extension Opportunities……………………………………………...Page 10-11 Brand Personality & Values………………………………………………….Page 11

Part 3 - Conclusions and Recommendations

Strategic Recommendations………..……………………………………....Page 12-13

Reference List………………………………………………………………..Page 14 Table of Figures

Figure No.

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Page No. 2

Superdry Financial Performance 2014-2018

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3 Screenshot from Statista showing Revenue of SuperGroup 2011-2018

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5 Brand Resonance Model/CBBE Pyramid

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7 Superdry Logo

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Brand Perception

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Brand Identity Prism

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Superdry’s Values

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Belief Driven Buyers

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Part 1 Introduction According to Slade (2016) a brand is more than just a name, logo, symbol or trademark that highlights its origin; it is imbued with a set of unique values that defines its character and works as an unwritten contract, promising to deliver satisfaction by providing consistent quality each time it is bought, used or experienced. As cited in Strategic Brand Management (Keller, 2013) the American Marketing Association defines a brand as ‘a name, term, sign, symbol or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition, It is evident that Superdry is experiencing some issues with shares ‘crashing more than a third’ as this recent summer the UK experienced shockingly hot weather, Superdry blames ‘lack of innovation’ with lower sales hitting their profits by around £11m by November (Armstrong, 2018). This was the second profit warning in a short amount of time, insinuating there are some issues with the brand that will be analysed throughout this audit. Following the strategic brand audit of Superdry through citrically analysing the brands current positioning, brand equity and other contributing factors that create a strong brand. This assignment aims to provide Superdry with recommendations of bettering their brand. Introduction to Superdry and Issues with the Brand Superdry is a UK apparel company, it began with the founding of Cult clothing in 1985 by Julian Dunkerton and a former business partner as stated on the Superdry Careers Website (2018). Today, Superdry is sold in 157 countries with a plan to become a £1bn business by 2020. (Superdry Careers, 2018).

Figure 1. Superdry Financial Performance 2014-2018

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The table above (see figure 1) shows the financial performance of Superdry 2014-2018. It shows that although there has been a year on year increase of Group Revenue, there has been a decrease in underlying group gross profit margin and underlying group operating profit margin. This shows just a few ways in which Superdry might be failing. Group revenue of SuperGroup worldwide from financial year 2011-2018 (in million GBP)

Figure 2. Screenshot from Statista showing Revenue of SuperGroup 2011-2018. The table above (Figure 2) shows a screenshot taken from Statista. It explains that ‘SuperGroup is the UK fashion retailer owning the Superdry brand both in the UK and internationally. In the financial year ended April 2018, the group's revenue was at 872 million British pounds (SuperGroup, 2018). Although both pieces of data show an increase in revenue and a general positive outlook on the business, there is also evidence to show ways in which Superdry may not be performing as successfully as it has done in the past. Despite the already stated positives of Superdry, according to Drapers, Superdry has issued a ‘profit warning’. Analysts predicted that Superdry’s underlying profit before tax would fall between £107.1m and £111.6m. However, following the announcement from Superdry, the figure is likely to drop to around £86.5m. In comparison to last year, Superdry’s underlying group profit before tax was £97m (Brown et al., 2018). As well as a decline in profit, Superdry are also experiencing strategy difficulties according to Brown (2018), Superdry co-founder James Holder has criticised Superdry's current strategy ‘calling for an “urgent sea change” in approach if the brand is to become a dominant online brand, capable of challenging Asos’ and according to The Times, ‘he said that the business

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needed to act quickly to “restore the share price to its previous level as quickly as possible” (Brown, 2018). As Superdry relies on it sales from Coats, Jackets, Jumpers, Waterproofs e.t.c. it was expected that profits would fall following one of the hottest summers in the UK. Sales have decreased by more than third and have released a second profit warning in two months. Armstrong (2018) explains that Superdry's shares have fallen by 36.4pc, or 208.5p, to 365p, this shows that stakeholders have less confidence in the brand due to making 2 profit warnings in the space of two months, this could have a detrimental impact on the brand in turn decreasing consumer confidence. Part 2 Analysis of the Brand Target Market Keller (2013) states that the consumer target is important because different consumers may have different brand knowledge structures and thus different perceptions and preferences for the brand. A market is the set of all actual and potential buyers who have sufficient interest in, income for and access of a product. Superdry’s Career website states that their customer is ‘loyal, varied and truly global, and are defined not by their age but their attitude’ (SuperdryCareers, 2018). Superdry’s target market is described by themselves as ‘loyal’, ‘global’ and defined by ‘attitude not age’, who ‘don't believe in being categorised by what they wear’. Superdry describe themselves as ‘not just a fashion brand’ but a ‘lifestyle’ and a ‘way of life’ (Superdry, 2018). Points-of-Parity and Points-of-Difference Points-of-differences are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent of a competitive brand...brands aim to create a point-of-difference on ‘overall superior quality’ (Keller, 2013). Main competitors of Superdry include the North Face, Jack Wills and Musto all of which offer similar products however at different price points. Keller (2013) suggests that consumers brand choices often depend on perceived uniqueness of brand associations, Superdry aims to portray themselves as market leaders with quality and a focus on sustainability with a Japanese twist which is unique in comparison to competitor brands. Points-of-parity associations are ‘not necessarily unique to the brand’ but can be shared with other brands (Keller, 2018). This is divided into three categories: ● ● ●

Category Competitive Correlational

Superdry has points-of-parity with similar product offers as their competitors and that essentially all retailers have, such as waterproof coats, denim, tops e.t.c. It is the design, innovation and brand personality of this brand and its products that encourage consumer loyalty to their brand. Customer Based Brand Equity (CBBE) and Brand Positioning

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According to Aaker (2014), brand equity is defined as ‘a set of assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to the firm and or to the firms customer’. Keller (2013) suggests that there are 3 models a brand can follow to help marketers devise branding strategies and tactics to maximise profits and long term brand equity. These models are ‘Brand Positioning Model’, ‘Brand Resonance Model’ and ‘Brand Value Chain Model’ throughout this assignment, these models will be applied to Superdry. Customer Based Brand Equity (CBBE) refers to ‘the differential effect that brand knowledge has on consumer response to the marketing of that brand (Keller, 2013). Slade (2016) defines Brand Equity as a ‘marketing term’ that is used to describe commercial value derived from consumer perception of a brand name, rather than the product or service it provides. Keller (2013) explains that for a brand to have positive CBBE, consumers react more favorably to a product and the way it is marketed when the brand is identified than when it is not. Bad reputation can result in negative brand equity, and once a brand has made a poor association in the minds of consumers it can be ‘very difficult to shift’ (Slade, 2016). It is likely that customers will be more accepting of a brand extension of a brand with positive CBBE as they have already experienced the brand, so a trusted relationship and reputation is built, therefore consumers expect the same for the brand extensions. Brand Resonance Model/CBBE Pyramid

Figure 3. Brand Resonance Model/CBBE Pyramid As previously mentioned, The CBBE Pyramid, which is also referred to as the Brand Resonance Model by Keller (2013), is one way in which marketers can maximise successful brand equity. Achieving the right brand identity means creating brand salience with customers. Brand salience refers to the awareness of the brand, as Keller (2013) suggests, is the brand at the forefront of the consumers mind? And how easily recalled or recognised is the brand? Brand awareness is the customers ability to recall and recognise the brand under different conditions and to link the brand name, logo and symbol to certain associations in memory.

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Resonance: customers with repeat purchases -behavioural loyalty, attitudinal attachment, customers feel that when they buy Superdry it is special due to it being a mid market brand. Judgements: Fun, social approval, self respect. Feelings: Colourful, good quality, fashionable, sustainable, expensive, trendy. Performance: Mid market, affordable, high quality, effective, stylish. Imagery: Lifestyle, skiing, snow, stylish, expensive, reliable, durable. Salience: Affordable, luxury, quality, lifestyle. Brand Elements Brand elements are trademarkable that serve to identify and differentiate the brand. The main ones are brand names, URL’s, logos, symbols, jingles, slogans. Keller (2013) suggests that brand elements should be memorable, meaningful, likeable, transferable, adaptable and protectable. For the sake of this assignment, few of Superdry's brand element will be analysed. Brand Name The name of a brand is a significantly important brand element as it often ‘captures the central theme or key associations of a product or brand in a compact way’ (Keller, 2013). Keller (2013), also explains that a brand name should be simple and easy to pronounce as simplicity reduces the effort that consumers have to make to comprehend and process the brand name. Superdry adopts an invented/descriptive brand name according to the Lippincott Brand Name Taxonomy. Superdry could be an invented brand name as it is one word, however it could also be considered descriptive, meaning their clothes keep you ‘super dry’. Keller (2013) explains that a brand name that is easy to pronounce will increase word of mouth and strong memory links, like Superdry. Slogan Although slogans are increasingly popular for brands in order to increase brand awareness, this is something that Superdry lacks. It would be beneficial for Superdry to acquire this as a brand element, as it is something for consumers to remember them by. Possibly something that relates to them being a lifestyle brand that dresses for all weathers in a stylish way. According to Keller (2013) memorability is necessary for building brand equity as it helps to achieve a high level of brand awareness. Brand elements that are memorable gain attention from consumers. Superdry has a logo with high memorability with the logo being white writing on black with Japanese writing above in orange. The Japanese writing in the logo is synonymous with the brand as the logo features on many of the garments sold at Superdry.

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Figure 4. Superdry Logo Meaningfulness is another factor of brand elements that increase brand awareness. A brand element should hold meaningful information about the product, brand or service. In relation to Superdry’s logo it could be said that the Japanese text is meaningless as the majority of Superdry's customers are English speaking and would not be able to translate the writing, however arguably it becomes part of the brand and gives an insight into the inspiration of the brand and designs. Keller (2013) states that likeability is important for brand elements. This refers to whether or not brand elements are likeable, aesthetically appealing, visually and verbally likeable. Superdry has previously endorsed their brand with celebrities such as Idris Elba, which was evidently likeable due to the 30% increase in sales as reported in November 2016 (This is Money, 2018). This shows that Idris Elba is someone that consumers can resonate with, and have been more aware of the brand through Idris wearing and promoting the brand. Celebrity endorsement is a brand element that can make the brand seem fun and interesting, which Keller (2013) suggests is of importance. Transferability, adaptability and protectability are the final three factors that play an important part in playing a defensive role for leveraging and maintaining brand equity in the face of different opportunities and constraints (Keller, 2013). Brand Perception Superdry’s Full Year 2018 results, provided an infographic of the brands perceptions in the UK, Germany and the US. The perception of the brand showed words such as ‘good’, ‘quality’, ‘modern’, ‘colourful’. There are mostly positive words used to describe Superdry, however it is evident from more negative words ‘don’t know’, ‘never’ and ‘none’, it would seem as though Superdry brand is not as strong in the US as it is in UK and Germany.

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Figure 5. Brand Perception Brand Identity Prism

Physique

Personality

Japanese, stylish, unique

Confident, Sp Durable, Herit

Relationship Quality, sustainable, interesting products,

Culture British, Tokyo, Self Image Confident, Interesting, Stylish, Sporty, Active, Smart

Figure 6. Kapferer's Brand Identity Prism Above is Kapferer's Brand Identity Prism applied to Superdry as a brand. Kapferer (2004) explains that the 6 elements in The Brand Identity Prism define the identity of the brand as well as the boundaries within which is free to change or develop. The 6 elements are physique, personality, culture, relationship, reflection and self image. Kapferer (2004) states that these

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aspects can only come together when the brand communicates with the consumer. Going forward, the author will go through each aspect of the Brand Identity Prism with reference to Superdry. Physique

Personality

Culture

Relationship

Physique refers to the brands physical features which are evoked in peoples minds. With the Superdry logo having Japanese text above it is likely that consumers link ‘japanese style’ to the brand. Superdry is unique in the way that it has a ‘sport’ and ‘ski’ range that is ‘stylish’ with new designs changing with emerging trends.

This is the brands character that gives consumers a feeling about the brand through its brand elements. Superdry has celebrity endorsements with Idris Elba, the brand has created a confident, sporty, stylish personality. Idris Elba is an English actor, producer, musician and DJ, this is someone that consumers can look up to and resonate with which generates more awareness and sales.

This aspect refers to the system of values and basic principles on which a brand has to base its behaviour. Country of origin (COO) is an important factor of this aspect, although Superdry uses Japanese style graphics, Superdry’s COO is UK. Superdry is a global brand so it is likely that consumers think of British, International and Tokyo/Japan.

Kapferer (2004) explains that the relationship aspect can symbolise a relationship between people. This is something that Superdry demonstrates by giving consumers the option to sign up to an ‘exclusive’ account with themselves. Superdry has their own blog accessible to their customers that creates a relationship between the brand and

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customers encouraging loyalty to the brand. Self-Image

Reflection

This is essentially how the brand makes the consumer feel when they are using the product or wearing the brands clothes. As Superdry claims to be a unique, stylish brand that brings confidence and encourages active participation in sports through its sporty style and durability. This aspect makes reference to the stereotypical user of the brand that is not necessarily part of the brands target market. Therefore for Superdry, this may be a younger market with disposable income.

Brand Architecture Strategy According to Keller (2013) a firm's brand architecture strategy helps marketers determine what products and services to introduce, and which brand names, logos and symbols to apply to new and existing products. Firms must maximise brand equity across all the different brands and services they offer in order for new products, brand extensions etc to be successful (Keller, 2013). To develop a Brand Architecture Strategy it requires: ● ● ●

Defining the Brands Potential Identifying Brand Extension Opportunities Branding New Products and Services

Defining the Brands Potential To define the brands potential, there are three important characteristics such as; the brand vision, the brand boundaries and the brand positioning. The brand vision for Superdry is that it is a brand with ‘purpose’, where they create the clothes and and the customers create the stores (Superdry, 2018). Superdry (2018) explain that their clear brand positioning is centred on ‘creating amazing clothes through an obsession with design, quality and fit and is underpinned by relentless innovation and commitment to operational excellence in everything we do. Our customers are loyal and global and are defined by attitude, not age’. Identifying Brand Extension Opportunities A brand extension is a new product introduced under an existing brand name. Differentiations of a brand extension include line extensions (new products introduced into existing categories) and category extensions (new products introduced outside of existing categories) (Keller, 2013).

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As Superdry’s profits are struggling due to warmer weather, it would be beneficial to carry out a line extension of summer clothes such as swimwear, T Shirts, Denim skirts, Shorts. In order to satisfy those customers that are loyal to Superdry and wanting to shop throughout the year, as opposed to just for AW clothing such as Coats, Jackets etc. Given that the vast majority of new products and extensions fail due to confusion to consumers, diluting brand meaning and can potentially prevent the brand from extending in the future, it is important to develop and take precautions to prepare for the extension. Branding New Products and Services This is the final step for developing a brand architecture strategy to decide on the specific elements to use for any...