Leveraging your Brand

Today, there are many companies that are finding new ways of leveraging their brands by "moving the brand down" as some experts like to say. More and more buyers are turning from high end luxury brands and finding other, good quality and better value products as a replacement. This is largely due to technology as it has allowed commerce to reach unprecedented levels through ecommerce. From a company's perspective however, they have to find new ways of reaching more customers with an abundance of options by leveraging their brand and selling other less expensive products.

A good example of this is found in the computer industry. Netbooks have surfaced the market in just the last couple of years. Companies have found a product that will sell for nearly a 1/4 of the price using software technology that was available almost a decade ago. They have basically come up with a new way to market an old product. In fact, these computers have less storage, performance, and capacity.

One of the reasons that companies have increased their sensitivity to quality and price is that markets have reached overcapacity in both new competitors and also because of fairly static markets. The problem however, is that brand loyalty can erode and customers focus on features and price instead of quality. Their more concerned with paying more for quality and as a result market share starts falling. As mentioned earlier, another huge reason driving this type of leveraging is technological change. Technology can influence the cost structure because brands are becoming cheaper and simpler and therefore creating new price points for companies. With all these changes going on in the market, companies are having to adjust to new and dynamic ways of marketing their products. They need to adjust to these pivotal changes otherwise they will just have to accept to a declining share of the market and similarly, significant loss in revenues.

http://groups.haas.berkeley.edu/marketing/PAPERS/AAKER/BOOKS/BUILDING/moving.html