THE CHALLENGE OF KEEPING BRANDS STRONG

THE VALUE OF BRANDS

I. Discuss these questions.

1. What advantages do strong brands give a company?

2. What challenges do brands face today?

II. Read the article and say whether these statements are true (T) or false (F). Correct the false ones.

1. Too much focus on short-term profits is a dangerous strategy when developing brands.

2. Google has become the top brand in its category in a very short time.

3. According to the writer, it is impossible for brands to recover when things go wrong.

4. The writer thinks brands are less important now than before.

5. It has become easier for brands to move into foreign markets.

6. The most serious problem that brands face today is how to deal with the illegal copying and reproduction of their brands.

7. According to the writer, the main benefits of having a strong brand are financial.

THE CHALLENGE OF KEEPING BRANDS STRONG

A. A corporate band, like a human reputation, is something of great value.

But there is always a temptation to do something for short-term profit that can damage a brand in the long term. Many companies have given in to this temptation and reduced the quality of their products or stretched their brands unwisely. They then spend years l0 trying to repair the damage. This gives

those companies that manage to resist the temptation the chance to develop

brands that have huge value both to customers and shareholders.

B. Google is an example of an outstanding brand. The Internet domain name google.com was only registered in September 1997. But, less than l0 years later, Google's determination to become the top search-and-information service allowed it to outstrip Yahoo. And it did this at the cost of not putting display

advertisements on its home page.

C. There have been many examples of brands that have been damaged by

strategic errors, for example Levi's, with its unsuccessful move into suits. The good news is that well-established brands can recover when things go wrong. One example is Apple. It lost its direction after the departure of Steve Jobs, its co-funder. But regained its position with his return. Apple's expansion out of computers into audio and visual products was extremely important in its revival.

D. Without question, brands are more important then ever before. More companies now consist essentially of intangible assets such as patents plus

the value of their brands. 'In today's world, the advantages of innovation do not last as long, and there are fewer things that protect companies from competition. As other things become equal, they are left with brands,' says the Executive Vice-President of Millward Brown Optimor.

E. The lowering of trade barriers, plus advances in technology and globalisation, makes it easier for brands to cross borders. Buyers of mobile phones around the world now expect handsets made by Nokia. Samsung, Motorola or other global brands, and local brands find it difficult to compete. Luxury-goods companies like LVMH have been very successful in expanding national brands across borders and transforming them into global brands.

F. But brands face challenges. One has come from manufacturers of generic products in industries such as pharmaceuticals and the food industry. Although drugs companies invest billions in research, they also feel the need to use marketing to respond to generic competition. Even over-the-counter medicines such as painkillers are carefully branded.

G. Another challenge is the ease with which products can be pirated. It is difficult for Western motor manufacturers to stop their cars and trucks being copied. It is even harder for entertainment companies to stop music and films being digitally so reproduced over the Internet and on CDs and DVDs.

H. Despite these challenges, companies that build strong brands have big

advantages over competitors. They allow companies to increase their revenues and margins. There are other benefits too. For example, a top brand like Microsoft can recruit the best graduates from business schools and keep them longer.

Date: 2016-06-13; view: 3408