Brand value chain

Brand value chain - is a version of a classic chain model of value with marketing activities analyzed in the context of brand value and customer value obtained through various marketing activities. Serves to evaluate market information, helps to track brand value from the first stage of marketing investment to the last, final stage of shareholder value, serves also to evaluate customer response to marketing activities and supports decision making in the marketing area.

The five steps of brand value chain

Brand value chain is the process of creating a successful brand. It includes all the steps, from creating a brand identity to creating customer loyalty. The brand value chain involves five stages:

• Brand identity: This is the first step in the brand value chain. It involves creating a unique brand name and logo that will help to differentiate the brand from its competitors. The goal is to create an identity that will appeal to the target market and make them more likely to purchase the product or service.
• Brand positioning: This is the process of positioning the brand in the marketplace. It involves understanding the target market and the competition and then creating an effective message that will resonate with that target audience.
• Brand communication: This is the process of communicating the brand's message to the target market. This involves creating an effective marketing mix, including advertising, public relations, and other promotional techniques.
• Brand experience: This is the process of building a positive customer experience with the brand. This involves creating customer loyalty by providing excellent customer service, creating a positive customer experience, and providing value-added services and products.
• Brand evaluation: This is the process of evaluating the success of the brand value chain. It involves measuring the effectiveness of the brand value chain and making adjustments as needed to ensure that the brand is meeting the goals set.

The brand value chain is an important process to ensure the success of a brand. It involves creating a unique identity, positioning the brand in the marketplace, communicating the brand's message, creating a positive customer experience, and evaluating the success of the brand value chain. By following this process, a brand can be successful and create customer loyalty.

Example of Brand value chain

Brand value chain is a process of creating a successful brand that involves five stages:

• Brand identity: This step involves creating a unique brand name and logo to differentiate the brand from its competitors and appeal to the target market.
• Brand positioning: This step involves understanding the target market and competition, and creating an effective message to resonate with the target audience.
• Brand communication: This step involves creating an effective marketing mix with advertising, public relations, and other promotional techniques to communicate the brand's message.
• Brand experience: This step involves creating customer loyalty by providing excellent customer service, creating a positive customer experience, and offering value-added services and products.
• Brand evaluation: This step involves measuring the effectiveness of the brand value chain and making adjustments as needed to ensure that the brand is meeting the goals set.

The brand value chain is a crucial process to create a successful brand. By following this process, a brand can differentiate itself from its competitors, communicate its message effectively, and create customer loyalty.

When to use Brand value chain

Brand value chain is a great tool to use when creating and managing a successful brand. It can help to create a unique identity, position the brand in the marketplace, communicate the brand's message, create a positive customer experience, and evaluate the success of the brand value chain. The brand value chain can help to ensure that the brand is meeting its goals and creating customer loyalty.

Types of Brand value chain

There are three main types of brand value chain: the primary, secondary, and tertiary value chain.

• Primary value chain: This is the most basic type of brand value chain and involves creating an identity, positioning the brand in the marketplace, and communicating the brand's message.
• Secondary value chain: This type of brand value chain involves building customer loyalty and creating a positive customer experience. This can involve providing excellent customer service, creating a positive customer experience, and providing value-added services and products.
• Tertiary value chain: This type of brand value chain involves evaluating the success of the brand and making adjustments as needed to ensure that the brand is meeting the goals set. This can involve measuring the effectiveness of the brand value chain and making adjustments to make sure the brand is reaching its goals.

The three main types of brand value chain are the primary, secondary, and tertiary value chain. Each type of value chain has a different purpose and involves different steps in the process of creating a successful brand. By following the brand value chain, a brand can create an identity, position itself in the marketplace, communicate its message, build customer loyalty, and evaluate the success of the brand.

Value Stages and Multiplier

Fig. 1. Brand value chain

Keller and Lehmann have created a model that allows you to analyze how your brand creates value:

1. Value Stages
   • Marketing investment program - concerns the impact on the way of thinking of the interested client. It is an investment in a given program which in the future will influence the value of the brand. Customer feedback is key. It is he who will judge how your brand perceives it, so it is important to focus on good company marketing through advertisements, promotions or marketing campaigns that will be tailored to the customer's needs at this stage. This is where good communication and customer relations count.
   • Customer Mindset - that is, all the thoughts, feelings, attitudes and memories that a customer has in his mind about a given brand. At this stage it is important whether customers recognize the brand by name or logo, whether they are positively oriented towards it, whether they see the benefits of the brand, what is judged among others, or whether it is characteristic and prestige. Customer loyalty also plays an important role because the customers tied to the brand will be more likely to reach for their products and recommend them.
   • Brand Performance - the effectiveness of the brand on the market obviously consists of positive opinions of customers, good advertising and publicity but also the most important element is not the revenue or a good capital base. When a brand has made a name for itself, it can carry out such operations as increasing the price of products or adding new, more expensive applications. This should not change the customer's opinion about the brand, but can strengthen it in the belief that the brand is on the top. On the other hand, the brand becomes profitable, so that you can reduce costs and save on advertising, because with an effective marketing program, the customer should already associate the brand with advertising.
   • Shareholder - market performance affects shareholder value. Brand value depends on industrial and strategic decisions (such as, for example, increasing value) which are taken by management. It must take into account the needs of shareholders, because the higher the value for the shareholder, the better for the brand.
2. Multiplier
   • Quality Program - the first multiplier in the brand value chain. The quality of investment in the program depends on positive opinion and thinking of customers. So it is important to invest in marketing so that the brand becomes recognizable, fashionable or unique among other brands.
   • Marketplace Conditions - in this point counts on what consumer gets the brand, what advantage they have over the competition.
   • Investor Sentiment - the last multiplier already fully depends on the investors, and more precisely on their attitude to the brand. When the viewer's potential is able to value the brand better than the competitors. The level of risk with which the brand has already met or will meet is also determined here.

Advantages of Brand value chain

The brand value chain offers several advantages for businesses. These include:

• Increased brand recognition: The brand value chain helps to create a unique brand identity that will be recognized by the target market. This helps to create a positive reputation for the brand, which can lead to increased sales.
• Increased customer loyalty: By creating a positive customer experience and providing value-added services and products, the brand value chain helps to increase customer loyalty. This can lead to increased sales and improved customer satisfaction.
• Increased profitability: By creating an effective marketing mix, the brand value chain can help to increase the profitability of a business. This is because it helps to increase sales and reduce marketing costs.

The brand value chain is a powerful tool that can help businesses to create a successful brand. It helps to create a unique brand identity, position the brand in the marketplace, communicate the brand's message, create a positive customer experience, and evaluate the success of the brand value chain. By following the brand value chain, businesses can increase brand recognition, customer loyalty, and profitability.

Limitations of Brand value chain

Although the brand value chain has the potential to create a successful brand, there are some limitations to be aware of.

• Complexity: The complexity of the brand value chain makes it difficult to understand and implement. It involves multiple steps and requires a deep understanding of marketing and customer service. This can be challenging for those who are new to the process.
• Cost: The cost of implementing the brand value chain can be high. It requires a significant investment in time, resources, and money to create a successful brand.
• Effectiveness: Depending on how well the brand value chain is implemented, it may not be as effective as desired. Factors such as the target market, competition, and marketing strategy can all affect the effectiveness of the brand value chain.

Overall, the brand value chain has the potential to create a successful brand but there are some limitations to be aware of. It is a complex process that requires a significant investment of resources and knowledge, and the results may not always be successful. It is important to understand the limitations before implementing the brand value chain.

Other approaches related to Brand value chain

In addition to the traditional brand value chain, there are other approaches that can be used to ensure the success of a brand. These include:

• Design Thinking: This approach focuses on understanding the customer’s needs and desires, and then using that understanding to design products and services that meet those needs and desires.
• Service Design: This approach involves understanding the customer’s needs and then designing a service that meets those needs. It involves understanding the customer’s journey and then creating a service that is easy to use and provides value.
• Brand Architecture: This approach focuses on creating a clear and consistent brand image across all channels and touchpoints. It involves understanding how the brand is perceived and how it needs to be communicated across all channels.

These approaches can be used in combination with the traditional brand value chain to ensure the success of a brand. By understanding the customer’s needs, creating a unique identity, positioning the brand, communicating the brand’s message, creating a positive customer experience, and evaluating the success of the brand value chain, a brand can be successful and create customer loyalty.

Brand value chain — recommended articles

Goals of marketing — Consumer orientation — Customer driven — Managing brand equity — Buying cycle — Customer perceived value — Brand promise — Selling process — Route to market

References

• Chaudhuri, A., & Holbrook, M. B. (2001). The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty. Journal of marketing, 65(2), 81-93.
• Kevin Lane Keller (2004). Brand value chain. Building Strong Brands: Three Models for Developing and Implementing Brand Plans, 13-16.
• Mary E.Barth, Michael B.Clement George Foster, Ron Kasznik (1998)Institutional Background and Related Research. Brand Values and Capital Market Valuation, 42-44.

Footnotes

Author: Kamila Wronkowska