Brand Analysis

Discribe about the Brand Management for Retailing in International Markets.

Brand strategy is a long-term strategy for developing a successful brand for achieving specific goals. A brand strategy of an organization helps in reinforcing positioning in the market (Lerman 2013). The aim of this report is to compare two global consumer brands of retail and technology categories. A general contrast and comparison is made between the two brands. The brand equity, cultural resonance and competitive strategy of both the brands are considered. The two organizations chosen for formulating a brand marketing strategy are Apple and Tesco. Apple was founded in the year 1976 as a major technological advancement (Lüsted 2012). It is an American multinational corporation that designs and manufactures consumer electronics such as desktops, laptops, tablet, mobiles and various other gadgets (Lüsted 2012). Tesco Plc is a British retail grocery and general merchandise retailer with a mission of helping the customers enjoy better quality of life. They help the shoppers’ everyday to meet the needs of people and act responsibly for the communities (Tesco plc 2016). 

Brand Equity

According to the figures, the brand value of Apple in the year 2015 was $M 246,992 (Wpp.com 2015). The brand value changed 67% than the figures of 2014 (Wpp.com 2015). The home country, America had the biggest market for Apple (Popper 2015). However, according to the reports, Greater China showed a positive growth up to 71% in the year 2015 (Popper 2015). The Chinese New Year celebration led to rise in such figures in China (Popper 2015).

The reports suggest that Tesco is UK’s top retail store. However, according to the annual BrandZ index, Tesco’s brand value declined to $9.4 million in the year 2015 (Davidson 2015). Tesco is one of the biggest supermarkets in UK (Davidson 2015).

Consumer Cultural Resonance

According to perceptions and history, China has not been the friendliest country for American brands. Apple is selling its products at a greater price in China instead of cheaper. Chinese have a cost-conscious culture but they are making room for the unique Apple products due to its quality (Panzarino 2011).

The lifestyle of Malaysians for shopping is ever growing. The tools of advertising are well advertised by the retailers. Therefore, the retailers intend to understand the needs of Malaysians and provide a unique shopping experience to the customers (Chan 2011).

Brand Positioning

Apple follows a single brand positioning as a luxury brand in the global market with one size fits all strategy (Hovivian 2014). It has tightly controlled narrative, metered supply and premium pricing makes it a premium brand globally (Frick and Berinato 2014). India is the world’s second large smartphone market in which Apple uses premium brand positioning. The one strategy fits all market model is applied in which the main challenge is to lock more consumers. There is a need to strengthen the distribution network in smaller cities. There is a delicate balance of premium branding with customer-friendly pricing (Rai 2013).

Tesco is a brand for the consumers looking for value and who are greatly quality conscious. Tesco offers a wide range of products and attracts a specific customer segment. The organization also positions itself as price positioning by attracting specific target segments. Products sold via functional positioning are generally more expensive compared to Tesco’s basic range of products, since higher quality and enhanced functionality can only be achieved for additional costs (Perkins 2015).

PESTLE Analysis

Competitive Strategy

Apple follows premium pricing strategy and product differentiation. Apple uses “minimum advertised price” or MAP for prohibiting sellers to sell Apple products below a certain minimum price. In China, Apple follows cost innovation and product innovation for maintaining competition (Nielson 2014).

According to Perkins (2015), Tesco does not have a material leg up on its peers. The competitors have a strong hold in the market. However, its loyalty programs are a significant advantage over other competitors. The convenient locations of the stores are add-ons. It runs campaigns for fresh and easy food that helps them in gaining advantage.

Apple Inc.

Political

Apple is mostly dependent in China for the manufacturing of lower cost materials (Sandoval 2015). However, there has been threat of restricting the imports in the US from China as a mark of an effort by the US Government to boost the manufacturing process within the country. Moreover, the cost of finding alternatives of the low cost Chinese products could be very high for the company. Thus, this political unrest could increase the cost of manufacturing within the country.

Economic

There has been evidence of the increase in the labor costs in China which could act as one of the threats for Apple that could take way the cost advance of some of the products of the company (David, Dorn and Hanson 2013). Moreover, the increment in the strength of the US Dollars in the market could increase in the exchange rates which in turn, could be more expensive for the company to conduct business in the Chinese market.

Social

The close association of the company with China could also offend the potential customers in the country if the tensions in the country rises (Liu and Berkowitz 2014). Moreover, the manufacturing of the products of Apple in China could give rise to ethical concerns which could limit appeal of the products of the company among the social conscious consumers.

Technological

With the rolling out of the Android play with the Apple play having the same capabilities, then signature services of Apple are found to be no longer unique such that the competitors of the company including Samsung and Google have stronger capabilities to duplicate the services and products of Apple (Rempel 2015).

Environment

One of the biggest issues that the company has been facing is the environmental issue related to the disposal of the non working or used electronic devices (Cole 2015). Moreover, the pollution and the related environment side effects are also the main concerns is the manufacturing facilities in China. This situation could lead to higher manufacturing costs and increased regulation for Apple at the near future.

Legal

Apple is dependent on a wide variety of products for much of its income including music and software which are governed by the intellectual property laws. Moreover, its financial service sector, Apple Pay is highly regulated and thus, entering into the Chinese market could increase the insurance, regulatory and litigation costs for the company in the long run (Liu, Kauffman and Ma 2015).

Political

Tesco is operating in a globalized platform where the business performs of the company has been highly influenced by the legislative and political conditions of the countries in which it is operating including Malaysia and other EU countries (Alexander 2013). The government of the countries has been encouraging the retailers for providing job opportunities in order to meet the demand from the population inclined the students, senior citizens and working individuals.

Economic

The economic factor is one of the major concerns for the company as it is most likely to influence the demand, profits, costs and prices for the company. The developing countries like Malaysia have been experiencing the high un-employability which is decreasing the demand of the various products or goods and has been adversely affecting the demand of the same in the market (Awang et al. 2015).

Social

The current trends indicate that the customers are preferring “bulk shopping” and “one stop” purchasing owing to a variety of social changes (Fernie 2013). As the population in Malaysia is aging rapidly, the decline in the home meal preparation and the increase in the female workers have lead the company to focus on the supply chain, share of business mix and other operational improvements for driving the costs out of the business.

Technological

One of the major macro-environment variables for the company is the technology that has been influencing the development of its products. In order to make the shopping experience more soothing for its customers, the company has been utilizing the latest technology wireless devices, self check out machine, intelligent scale, electronic shelf labelling and Radio frequency identification (Chapagain and Ahokangas 2015).

Environment

The company has been pressing emphasis on the global warming and the related consequences being associated with it. With the average temperature around the globe being increasing exponentially, the company needs to emphasize on an eco-friendly business practices which could lead it to higher environmental sustainability (O’Neill and Smith 2014). Thus, in order to implement the same, the company has been implementing various measures with the main objective to protect the environment.

Legal

As the company markets a wide variety of predicts and services, there are a number of laws governing the business processes of the company. According to the FRC (Food Retailing Commission), the company should be implementing a code of practice including the banning of the current practices such as changing agreed prices, demanding payments from the suppliers as well (Ward,  A.M., Judith and Hamill 2013). The company has also been offering price reduction on fuel purchases such that to implement the politically correct pricing policies in the countries like Malaysia.

Certain factors reduce the performance of Apple. There is aggressive competition in the market. Apple needs to have strong fundamentals for retaining its position in the market. The local and regional firms imitate Apple’s products that could be a threat to the product design. The rising cost in China can reduce the profit margins and increase costs. Apple has a significant opportunity for its distribution of network. An expanded strategy can help in reaching more customers in the same time. Apple can consider exploring new product lines that can lead to their success. Developing new product lines can lead to company success despite aggressive competition.

Apple can consider introducing new product lines and quality for the middle class consumers who prefer low priced goods. Apple currently targets only the premium segment consumers. It can also extend its product lines for the economical customers. Be obsessed with the user experience. The company must make the product look good inside and out (in design conception, this can mean starting with the look & feel). The user experience needs a healthy combination between aesthetics and functionality. Apple does not use promotional programs for advertising. It should use programs that can help in differentiating its products from others while maintaining premium prices. Apple can also enhance its reach through direct stores.

Tesco can consider expanding its retail stores by opening convenience stores. These stores can be opened at every few kilometres. Tesco can set up and invest small stores and online sales stores. Each convenience store can be opened with a wide selection of items that would offer ease and convenience to the consumers. The convenience stores can help in overtaking the supermarket concept. Tesco can gain customer loyalty and increase its sales. Tesco can focus on non-food products to hold a dominant position on the market. Tesco can also encourage online shopping to shift according to the consumer tastes and preferences. Tesco makes sure that it satisfies all the requirements and prospects of its customers.

Conclusion    

Conclusively, Apple and Tesco must plan strategies for efficient branding. The lifestyle of Malaysians for shopping is ever growing. Tesco Plc is a British retail grocery and general merchandise retailer with a mission of helping the customers enjoy better quality of life. The tools of advertising are well advertised by the retailers. Apple follows one strategy fits all market model in which the main challenge is to lock more consumers. Tesco is a brand for the consumers looking for value and who are greatly quality conscious. Apple is mostly dependent in China for the manufacturing of lower cost materials. The close association of the company with China could also offend the potential customers in the country if the tension in the country rises. One of the biggest issues that the company has been facing is the environmental issue related to the disposal of the non working or used electronic devices. Apple can consider introducing new product lines and quality for the middle class consumers who prefer low priced goods. Tesco can set up and invest small stores and online sales stores. Tesco makes sure that it satisfies all the requirements and prospects of its customers.

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