A brand collection means a assortment of brands from one and the same group. There are some benefits to develop several brands in a corporation. The use of several brands increases the chances that consumers will buy a brand from the profile of your company. This strategy does apply to a more substantial level of risk, and also provides secure foundation for extension to the brand. In addition, it provides "Synergy effects" which among other things may advantage the profitability of the company. So, a brand portfolio is good for a company, and the main element is to use other brands to protect the most valuable brand of a company from competition.
In a brand stock portfolio, four types of brand are recognized. A bastion brand has the major proper and financial advantages of the business, as it is the most profitable brand in a brandname portfolio. A flanker brand gets the maximum tactical advantages since it can be used to thwart potential opponents. "A bastion brand can be protected from competitive discount brands by adding one or more fighter brands" (Riezebos et al. , 2003: 198). The fourth kind of brand is a prestige brand, the financial value which is huge. Except for the bastion brand, the other three types of brand aren't fit for extensions (management advantages).
In the procedure of building a brandname portfolio, initially the business should choose which brand is the most effective for it and how it intends to guard this brand. How is a brand portfolio set up?
Three strategies can be utilized:
Brand development (companies exploit the average person brand itself)
Brand acquisition (by purchasing related brands)
Brand alliance (by causing plans with other businesses).
The first strategy requires a long time to exploit brands and has average control over the market position of the brand. In addition, it needs high investment. In brand acquisition, the speed of building a brand profile is quite fast, and the amount of control is maximized, while the financial investment is high. There needs low control and low investment in brand alliance, and enough time of building a brand collection is neither too quick nor too poor (Ourusoff et al. , 1992).
A great brand collection provides a steady base to a corporation not only to help gain access into other product categories, but also to help gain entrance into other countries. The development of a successful brand into other countries is termed international branding. This branding can promote the financial condition of any corporation, and enhance the strategic position of the corporation in other countries (Marston, 1992).
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Corporations have a tendency to develop several brands in more than one market, and exactly how to control this situation is something must be looked at as part of the brand's management. Brand stock portfolio, brand expansion and endorsement are main varieties for a firm. Zara belongs to a brandname portfolio, Inditex Group. There are numerous advantages to accumulating a brand portfolio. For instance, this plan is relative to a greater amount of risk spread, and will be offering a more constant foundation for extension to the brand. In a very brand profile, four types of brand are differentiated. A bastion brand gets the greatest tactical and financial merits for the organization, as it is the most valuable brand in a brandname collection. A flanker brand is used to prevent potential rivals. Fighter brands defend the bastion brand from competitive discount brands. And finally the prestige brand is one with the best financial value (Riezebos, 1995b). Regarding to Stand 1, Zara is a bastion brand, which is the most profitable brand and has a higher strategic advantage. Other brands in the Inditex Group can assist Zara to stem possible competitors from entry into its market, and also to spread dangers in the competition. Additionally, three strategies can be used to set up a brand profile: brand development, brand acquisition and brand alliance (Riezebos et al. , 2003). The Inditex Group adopts a brandname development strategy. It is obviously
shown that, as a bastion brand in a brandname portfolio, Zara has been more uccessful. In other words, in case a brand stock portfolio is well governed, it can develop more efficiently than other companies with a single strategy. Zara can be an international branding because 68 countries across the world have its stores. In addition, it shows that Zara is an effective brand. This type of branding can boost the financial condition of your organization, and promote the tactical position of this corporation far away (Marston, 1992). A successful brand has a manifest value and a latent value. Within the international brand strategy, a robust brand has a distinctly express value, but the latent value of an brand can be exploited by brand extension and endorsement strategy.
In creating a brand's latent principles, the endorsement strategy can be utilized. Within an endorsement strategy, a new product has a fresh and unique brand. Inditex has seven endorsed brands: Zara, Massimo Dutti, Bershka, Oysho, Draw and Keep and Uterqјe (Inditex, 2007) Inditex selects the endorsement strategy rather than the extension strategy, since it is eager to appeal to more consumers than those in its modern day consumer franchise (i. e. different goal group) (Riezebos et al. , 2003). A brandname extension means the name of an existing brand is utilized for something in a dissimilar product group, such as Zara and Zara Home. Zara is an effective and strong brand, so it is extended to some other product school, Zara Home. Knowing of brand name Zara Home is higher as Zara, its parent brand, has already been recognized to consumers. In addition, Zara evokes thoughts of familiarity (positive relationship) within consumers, which perhaps results in a greater probability of purchasing Zara Home. It really is well-known that the popular design with the medium price is one main attribute of Zara, and then consumers think Zara Home also has the same feature. From corporation's view, Zara Home is prosperous. In the view of consumers, they aren't so sure whether Zara's expansion strategy is rewarding. Perhaps Zara Home continues to be a new brand for consumers, and there are not so many stores in the pub relating to this brand. Hence, no matter which strategy is chosen, it must be beneficial to develop a brand to be powerful. In summary, Zara chooses superior strategy and impressive approach placement, and the brand value of Zara is related to need-driven and inner-directed aspiration levels. It offers positive and strong images and high brand-added value. Although brand, design and advertising as an instrument own an important effect in the brand management, not absolutely all of them should be employed. It is better to use the most appropriate one, so they chose to make use of design and brand. Zara setup a brand profile, Inditex Group, which utilizes an endorsement strategy to exploit more brands. Zara also developed a new extended brand, Zara Home. Predicated on these factors, Zara is becoming one of the most significant global fashion companies.
