Report on Online Brand Communities–ARoute to Brand Loyalty?

The American Marketing Association, AMA, define a brand as; “A name, term, design, symbol
or any other feature that identifies one seller’s good or service as distinct from those of other
sellers…” (AMA, 2013). Philip Kotler, one of the world’s foremost experts on branding define brands as; “A name, term, sign, symbol or design, or a combination of these that identifies the goods or service of one seller or group of sellers and differentiates them from those of competitors.” (Kotler, Armstrong, Wong, Saunders, 2008, p. 51

1). In addition, a brand is a sign of quality and for consumers, brands help to identify a certain product, reduce search costs and perceived risk, according to Carroll (2009) and hence it becomes a shortcut in decision-making
process. Mörling and Strannegård (2004) and Rosenbaum-Elliott, Percy and Pervan (2011, Ch.

2) also state that brands can help consumers to reinforce their individuality as brands provide
meaning.When it comes to brands there are two major views in looking at its added value for a company;
brand value and brand equity. The concepts are very different, yet intricately linked together.
Brand value is what the brand is worth to management and shareholders, whereas brand equity is
what the brand is worth to a customer (Tiwari, 2010).]

Kotler et al. (2008, ch. 11) argue that brand building can generate strong brands and that a strong
brand, in turn, can contribute with many advantages. The authors mention that brands can help
make the customers’ decision-making process more efficient as well as saying something about
the quality of the product. The brand also simplifies for the company when widen their product
range, entering new markets and add to the customers’ identity building.

Rosenbaum-Elliott et al., (2011, Ch. 5) state that strong brands also can contribute with financial value as they can
sustain future sales and allow for higher price points, as well as creating low price elasticity, meaning that price changes affect sales very little. A strong brand also allows for higher margins versus competitors and acts as a barrier for new competitors, according to Rosenbaum-Elliot, etal. (2011, pp. 92). To become a competitive advantage, however, a brand has to be managed correctly and must show the companies uniqueness and added value (Janonis, et al., 2007).

Source: mba.final year projects

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