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Brand Management: Significance of branding

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Significance of Brand Management


Brand distinguishes not only products or services but also differentiate organizations’ fate and prospect. To uncover the importance and influence brands have over a successful organization, we have chosen Tesco, which is a UK based multinational retailer company. We will try to implement several aspects on real world branding into our chosen organization to understand their practical viewpoints. We will be learning importance of branding, several tools of it, key components of a successful branding strategy, an organization’s branding portfolio and so on. These theoretical discussions in a realistic approach will help the readers to understand how a particular company can increase its brand footprint in its operational arena.

Significance of branding as a tool of marketing in Tesco; why and how it emerged in its business practices

Branding refers to the overall experience and impression of a consumer that differentiate a particular company or product from all of its rivals. Tesco has influence of this potential importance of branding:

Increasing Customer Preference:

 Branding eradicates confusion and lack of knowledge among the customers regarding products and services. In this way buyers of Tesco’s products learn about its brands that they have been faithful. More branded products are viewed as less risky to buy. Therefore, products with greater marketing efforts are believed by customers to perform better than other non-brand products.

Generation Greater Revenue and Market Share:

With the virtue of extensive branding effort, both the revenues and captured market share substantially accelerate. Hence, firms like Tesco get more and more powerful and successful than it used to be in the past. By utilizing its power and capacity, it can engage in new markets across several geographical areas. With more money, it gets greater permission for engaging in further co-branding and new distribution system resulting in more and more revenues and share in the markets (Bennett, 2019).

Surviving Crisis:

For any company image crisis can cause devastating outcome. Companies that are promoted through branding have greater acceptance in the customer base and therefore they can tackle any crisis situation of the company more than any other companies.

Bigger Net Worth of Company:

Neither physical resources nor worker number actually influence a company’s market value. Brand value of that company matters the most. Assets like goodwill and trademarks of successful companies worth more than any other assets of them. These are made out of branding.

Attaining Competitive Edge:

Often times, a single market segment is targeted by many competitors. In that hurdle, companies with greater branding image and capacity, get most out of that segment as they are fast and well-equipped to capture that segment (Milisavljevic, 2013).

Tesco PLC ranks as world’s third largest retailer in term of gross revenue. Branding gives Tesco this success and recognition to make it known to its customers. Its logo helps customers to identify it differently. A powerful brand like Tesco can increase its value and thereby can be established as more favourable investment opportunity to many of the investors. Its current branding helps it to get new customers who are likely to be loyal to the brand. Because of the brand image, it has secured sense of greater trust and reliability. Branding has given its employees more pride and job satisfaction. They support their brand from the behind. Employees who work in Tesco, feel themselves highly reputed to work in such a brand. Lastly, Tesco uses advertising as a component of branding so that it can broaden the knowledge of products and services that it offers among customers.

Key components of brand strategy for building and managing Tesco’s brand equity

Brand management can be simply described as a particular function of marketing that ensures the use of several techniques to boost up the perceived value of a particular product or service. Here a list of key components that are part of brand strategy for building brand equity in Tesco:

Target Audience:

 It includes the persons who are supposed to buy Tesco’s products. It can be individual consumers or can even be large buyers like some other company. When target audience is not any individual rather a company, then it follows comparatively more complex procedure. In such a situation, buyer takes purchasing decision carefully depending on proposed value of any particular product of Tesco.

Brand promise:

 Tesco briefs to its customers through brand promise what a customer may expect from their products. Honest brand promise creates trust among consumers. Tesco believes in attaining this trustworthiness so that consumers can have faith in all the commitments given by this retailer company.

Brand Perception:

Brand perception is nothing but the experience that a customer has with products or services of a particular brand. If this experience is sour, it impacts and most probably results in loosing that customer. Keeping that in mind, Tesco ensures better assurance for its services and also too keen to learn and change itself on the basis of customers’ feedback and complaints. Thus, it gives better buying experience and gets adequate brand perception from its customers.

Brand Values:

These are the core values that influence the overall decision-making process of a company. Tesco defines its values based on what is essential to its customers providing their guidance and preferences over its choice. Its values are also influenced by buying decisions of consumers as it affects Tesco’s sales and profits. So, it prefers customer satisfaction to the fullest in order to get aligned with their customers (Bennett, 2019).

Brand Voice:

 It is the attitude and values that a brand generates among its target audience. Using this, a brand conveys its messages to all its audience. In case of Tesco, buyers of its goods are its ‘brand ambassador”; meaning that, if they get satisfied, they raise vocal in favour of Tesco just like using word of mouth. On the contrary, it is vice versa.

Brand Positioning:

 It is the image or response that comes to the mind of customers when they heard the name of a brand. Strong brand positioning results in ultimate customer loyalty. Tesco has a brand positioning that worth mentioning; it is the third largest retailer company globally. Without brand positioning, that can rarely be imagined (Milisavljevic, 2013).

A Brand Pyramid is a vital way of understanding the external voice of any brand. For example, it should feed a brand’s value offering, development stages of a brand, communication procedure, advertising and marketing strategies etc. This model monitors consistency in the behaviour of Tesco’s brands and also ensures marketing efforts are matching to the brand’s own benchmarks. External communications may change on the basis of different market needs and circumstances, its brands have to stand for what they are supposed to and have spoken to deliver.

Strategies of portfolio management, brand hierarchy and brand equity in Tesco

In current days, many of the business firms conduct operations of multiple brands. All those brands constitute one single portfolio which is also known as brand portfolio. It must be considered at the time of strategic decision making related to brands. Brand portfolio is taken into consideration when brand strategy decisions are made. In many of the companies it is not given proper importance resulting in poor brand performance.

Tesco keeps bring up new brands considering customer demands. For example- Willow Farm is a brand of them that provides fresh poultry products. The firm limits new brand origination if it thinks it as irrelevant to market demand. Its brands are categorized into sections like bakery, fresh food, frozen food, drinks, baby items, household etc. Clean categorization helps it to avoid chance of confusion among customers. It introduces new brands only when it has a pre-define purpose or demand (Sandhusen, 2008).

Tesco has to consider resource allocation while managing it brand portfolio. Underspending or overspending on brands may cause less profit in the future and it may also have serious impact on future growth resulting in ‘struggling brand” situation. This company’s brand portfolio managers ensure balances profit and loss by introducing long term asset value. Several brand valuation tools are used to ensure greater share of resources. It also applies qualitative approach for more effective assessment of brand portfolio performance. It helps in long-term business decision making.

Brand hierarchy is a medium to sum up branding strategy simply by showing several numeric data and other brand related elements of products in order to unveil explicit brand order. A brand hierarchy is a helpful mean to present a firm’s branding planning in graphical way.  It is done on the notion that a product can be branded in several means depending on all the new and existing elements and in which way they are going to be combines to for one single product. In such a hierarchy, it is shown that how products are combined with other product with similar brand elements. some brand elements can be divided among many products; on the other hand, some are unique in nature.

Brand equity is referred as some special value that is generated from a recognizable product comparing to other identical products. Brand equity is created when a certain product possesses higher quality, more reliability and customer satisfaction.

Simply speaking, brand equity generates when tangible or intangible values originate from some distinct and recognizable features. It also depends on customers’ perception. Therefore, to gather brand equity, Tesco should emphasis more on boosting positive perception along with positive recognition from its customers. Higher positive perception and recognition make brand equity far stronger. If it has limited recognition levels, then enough people will not know about its brands. Limited recognition may happen when Tesco launches any new product. At the beginning stage of product life cycle, almost all the products show lower recognition from the consumers. In such a situation after launching a new product, Tesco needs to gather enough recognition levels in order to make a platform to ensure brand equity generation. More marketing efforts can reduce the gap between the company and its ultimate consumers (Milisavljevic, 2013).

Collaboratively and partnership in domestic and global level of Tesco

Brand collaboration is nothing but the strategic relationship between two or even more than two brands in order to produce a definite type of product for attracting a niche market and gaining some advantages over competitors do not have those. In this system, companies jointly prepare a team for conducting all the marketing activities together for mutual benefits.

In recent years, businesses in retail sector in UK has experienced several dynamic and changing situations with government policies, changes in customers’ preferences, everchanging political aspects and growing level of competitions. These have been challenging higher sales and revenue making tougher day by day. In such a situation, management of Tesco PLC wants to dominate the market by building stronger and more powerful presence of its brands.

Therefore, it needs to engage in brand collaboration with some other appropriate or equivalent brands to work together. Say for example, If Tesco collaborates with a company who serves digital payment system, then both of the two brands can make many of their marketing decisions together. It will result in gathering in more data, experience, effort and reason to contribute better for doing all activities solely.

Customers in the domestic market are getting more and more educated and their expectation are changing at a rapid pace. With the help of internet and other digital platforms, customers are aware and they have been proposed with lots of alternative paths to choose with similar types of services. Thereby, Tesco needs to go in brand collaborations and partnerships to serve outstanding innovations in value proposition through their products and services. Otherwise, they may lose existing customers to new companies that are gradually getting more and more competitive in grocery and retail sector within UK and outside its border.

Business firms with greater collaboration with other business partners internationally are more efficient and likely to be successful. Because everyone cannot do everything efficiently. Collaboration shortens time to innovate and market new items. Getting out of taking all the burden helps to take care and focus on core portion of the business process. When a firm tries to go global, with the collaboration of foreign firms in foreign lands, it can discover market potentials quite easily as it gets information and other assistance from the foreign firms (Bennett, 2019).

Tesco is actively participating in international operations of its business active outside the UK. For example, it has Tesco Malaysia and Tesco India. There they do business with the help of local collaborators. It causes them to save money. For instance, in India, Tesco PLC has collaboration with Trent Ltd., a part of Tata group. With similar local connections Tesco collects its raw materials and other resources. The collaborators help Tesco to reach greater local consumers. Thus, Tesco gets more efficient in term of cost control (Milisavljevic, 2013).

Methods for measuring and managing brand value in Tesco

The brand valuation process is important because it leads respective company to accelerate its market value and gets accuracy in case of merger, for example. Brand value consists of several types of technical valuation for purposes like, tax calculation, investment prospects, franchising etc.

Brand Awareness

Brand value can be measured by customer knowledge of a particular product or service. One of the methods to know consumer’s awareness is ‘conversion share’; it is the number of times a brand comes in daily conversations among customers along with its values and other aspects. Measurement of brand awareness can be done in several forms like:

  • surveys
  • website traffic
  • mentions in social media
  • focus group

Preference Metrics:

 this metrics acts as a powerful factor for purchasing decisions. For preference a customer may be willing to travel more and spend more to get a particular product or service that they really appreciate. It can be calculated through sales related data, several forms of survey (offline & online), market research data etc. Brand relevance is a part of preference metrics. In Tesco, it is the extent up to which its consumer is agreed that brand gives unique value proposition which is not available to its competitors. The ability of Tesco to provide demanded product to the customer is its accessibility. Through all, Tesco forms emotional connections and emotions with its customers resulting in gaining customer loyalty. Thereby, brand value of Tesco is a measurement that how much money customers of Tesco are willing to pay for its products (Milisavljevic, 2013).

Financial metrics:

in this measurement, brand value depends solely upon sales performances. If indicators like price premium, lifetime customer value, sustained growth etc. rise, then revenue likely to rise as well along with its brand value. As a retailer-based company, Tesco uses this measuring and managing indicator to understand whether its brand value is up to the mark or not.

Market share:

this valuation technique considers the market accounted for Tesco. Valuation if done both in units of goods and revenue using survey data. Optimizing market share is often viewed as one of the most important objectives to Tesco as it is a way to measure its performance. This measurement technique is monitored by investment analysts to get the insight of any hidden competitiveness of this company. If Tesco’s market share grows, it means it is doing well than its competitors in the same retail market.

Output Metrics:

 Output is a measure of a firm’s business activity and its proficiency. This metrics measures the marketing resources a company gives. Tesco’s output looks at how frequently its materials are released to the market along with what type of asset gets released in the market. Brand value of Tesco often gets influenced by local activity as assets not used by local stores, fail to influence sales. Thereby, Tesco tries to maintain good quality output to get rid of negative impression on its brand value.

Competitive metrics

Brand value of the competitors of Tesco has a mentionable influence over Tesco’s brand value trends in the near future. If competition among the competitors of Tesco causes any price adjustment, change in customer preferences, any image crisis then impact will be on Tesco and its brand value as well. This measurement also reveals aspects where competition does provide any value to the customers. Some of the factors considered by this metrics are: sales lift, ROI of distribution, changes in customer acquisition rate and so on.

Lean Production:

Lean production or lean manufacturing relates to a systematic way or method to minimize waste within a production system without reducing any productivity. Tesco use lean production to take waste in to account through overburden and even waste created by excessive work load (Milisavljevic, 2013).


We have discussed several aspects related to marketing and to be specific, brand management. It has shown us how and why a company maintains its brand value to be successful in its operational environment. Therefore, we have gone through issues like importance and application of domestic and international collaborations, ways to measure and manage brand value over time, analysis of different strategies and factors related to organizing brand portfolio and its management etc. This report has helped us to pave the way for Tesco to improve its influence in branding prospects.


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