Brand Management: A Critical Analysis of Lidl GB

Brand Management

Introduction

Brand management is an integrated process that sums up all the facets of design, positioning, marketing, advertising and distributing the products through the organisation’s identity. The report will critically analyse brand management tools, its development and positioning techniques, brand equity, brand reinforcement, revitalisation, and so on. It will evaluate various branding architectures, branding hierarchy along with the real-time examples.

Lidl GB is a supermarket chain which provides fresh foods and exclusive variety of wines (lidl.co.uk, 2021). Its first store was established in 1994, in Germany and now the business has expanded to all over Britain with 800 stores, 13 regional distribution centres and 25000 employees.

Task1 Building and managing a brand over time.

Explain why and how branding has emerged in business practice.

A brand is an identity of an organisation in the form of a name, logo, symbol, sentence, and others to distinguish its product from other market products (Marques et al., 2020). Lidl opened its first “Regional Distribution Centre” in Lutterworth along with ten British stores in the year 1994, with 800 products being sold. The second Regional Distribution Centre was opened in 1996. The organisation then established its head office in Wimbledon in 1999, where it sold meat and poultry. In 2005, a system of daily waste and recycling was introduced to reduce carbon footprint (lidl.co.uk, 2021). In 2006, Lidl had started the PWC (Personnel Welfare Consultant) role for enhancing employee commitment. In 2007, new energy-saving technology was implemented by Lidl. In 2009, the organisation opened its 500th store and increased staff holiday allowance by two days and in 2010 products were sold at half price on the weekends. In 2011, the organisation introduced its bakeries and employee awards and in 2012, the Lidl Olympics was organised and the company introduced pick-by-voice in its warehouses.

Lidl sponsored STV three weekends in 2013's summer campaign to survey its consumers about meal requirements. This activity was again conducted in September 2013 through which Lidl estimated the everyday meal requirements of approximately 2.6million adults. A few years later, Lidl telecasted a one-minute advertisement on television, which had a chef making a delicious recipe from Lidl’s products. This advertisement displayed Lidl’s rich products and encouraged the Scottish middle class to join the supermarket. Due to these activities, four big supermarkets lost to Lidl in 2013. In 2014, the organisation introduced healthy checkouts by releasing employee discount cards. In 2015, Regional Distribution Centre was launched in Southampton.

Explain the importance of branding as a marketing tool for Lidl’s and evaluate how its brands may be managed successfully over time.

The brand management process lets the consumers distinguish between the duplicates and the Lidl products. It is important for Lidl because it increases customer loyalty as the customers easily identify the desired products. The brand distinguishes the product and creates awareness among the consumers. This leads to better and repeated sales for Lidl. Brand management yields better customer satisfaction. The importance of branding for organisations, consumers and the intermediaries are as follows:

• To Lidl: Brand name helps efficient advertising. It helps in establishing the permanent identity of the product and encourages repurchasing thereby managing competition.

• To consumers: Consumers require less time to shop, as branded products are easy to identify. Quality is guaranteed in branded products. The companies fix prices of branded products and no frequent changes are witnessed. This assures customer the worth of purchase.

• To intermediaries: Branded products assure quick sales and let the wholesalers and retailers to acquire control over the market.

Managing Brands successfully over time: Innovation is a key to manage brands in a long run. Lidl should constantly search innovative methods to target the desired segment so that sales rise upwards. The organisation must include innovative and eco-friendly products, as it is the need of this era (Terech, 2018). Another technique for managing brands is to strengthen the marketing techniques so that consumers get used-to to the Lidl products. Constant marketing lets customers be loyal to a specific brand. The company must organise consumer promotion activity like discount offers, cashback offers and others.

Brand equity describes the reputation a brand name has in the minds of consumers (Marques et al., 2020). Lidl establishes brand equity by producing positive experiences to its customers so that they continue purchasing in future. Techniques for brand equity coverage are mentioned below:

• Promotions: Promotions are important for Lidl to survive in the market full of competitors. These may include television advertisements, social media promotion or exhibiting the organisation in social places like malls and so on.

• Customer feedback: Lidl must fix a customer feedback system in all the stores and also for online shopping customers. Feedback from the consumers will let the organisation understand its strengths and weakness.

Brand Positioning refers to the creation of a brand image in the consumers’ minds so that he/she prefers buying the particular organisation’s products. Following are the four techniques of brand positioning:

1. Perceptual Mapping: It refers to the systematic representation of what consumers think about products or services, people or ideas. It aims at distinguishing Lidl from competitors based on the specific characteristics or benefits offered by the organisation.

2. Positioning a product to specific segments: In this positioning, few segments are focused and others are neglected. However, this approach is proved to be beneficial in seasonal sales of Lidl.

Analyse the key components of a successful brand strategy for building and managing brand equity for Lidl’s.

Keller's Brand Equity Model is referred as the Customer-Based Brand Equity (CBBE) Model and is in the form of a pyramid.

Figure 2: Kellar’s CBBE model

(Source: Kotler and Keller, 2015)

Kellar’s CBBE model is divided into four stages from bottom to top as follows (Kotler and Keller, 2015):

1. Brand Identity: This parameter analyses the Lidl’s value in the market. Consumers all over the UK recognise Lidl as a supermarket that delivers high-quality products at a low price. It uses the same logo and a distinguishing yellow colour to advertise its brand. The organisation maintains its identity by targeting the desired segment of the market.

2. Meaning of the brand: Lidl's purpose is offering its customers the best products at cheaper rates. The organisation’s vision is to provide good quality products at a reasonable market-leading value and maintain satisfaction of the customers. Lidl has a set of values including respect, responsibility, trust and recognition. It respects its employees, business partners, customers. It trusts its employees and their work efficiency and recognises the hard work of its employees. “Big on Quality, Lidl in price” is the tagline through which Lidl promotes its products.

3. Brand response evoked from customers: This parameter is based on Judgements and feelings of the consumers. In the early 2000s, Lidl had surveyed in Scotland. This survey depicted that people all over the country thought Lidl as a cheap brand and they needed a higher-quality brand. To overcome these results, the company changed its tagline to "Big on quality, Lidl in price". This fetched the attention of many customers and increased sales tremendously.

4. Brand resonance: It explains the way a customer identifies himself with the Lidl. Its brand essence is to be best in quality and low on price. The organisation tries to communicate with its consumers' through social media channels. After tracking down the customers on social media, the organisation surveys to know the customer requirements. Due to this consumers have long-lasting relationships with the supermarket.

In the early 2000s, Whole Foods Market encourages its food lover consumers to buy products from their store by changing the branding line (eu.wholefoodsmarket.com, 2021). The organisation changed it to “Passionately Picky” which drove more customers to it. In the pre Web period, Chat University started a free online chat with students all over the world. This brand strategy let the students interact with the tutors while facing problems during or later the sessions. This branding strategy boosted their business.

Provide suggestions of how the Lidl brand can be extended, reinforce and revitalised.

Brand Reinforcement: It extensively focuses on maintaining brand equity so that the brand name remains fresh in the market and the minds of the customers (Kapferer, 2012). Lidl should engage its consumers on social media through various campaigns to understand consumer requirements. Interacting with customers leads to better organisation sales.

Brand extension: Brand Extension is the activity to launch the organisation's latest product under the brand name of the previously launched product (Kapferer, 2012). The organisation should add local American brands to its retail stores to attract American consumers. Apart from the UK's clothing brands, Lidl must also welcome reputed clothing brands from America to ensure greater sales.

Brand revitalisation: The brand revitalisation may be defined as the strategy which is applied when a product reaches last stage of the product life cycle generating very less to zero profit. It is the process of bringing the product back to the market (Schiller, 2018). The product size and price must be compared to that of other competitors so that Lidl can achieve its target. Big data analysis will extensively help the supermarket to know the customer requirements and problems faced by them during or after purchase.

Task2 Brand portfolio and hierarchy management

Brand portfolio strategy may be defined as the systematic and strategic way of establishing and controlling the brand identity and portfolio to maximise returns and maintain brand equity (Swaminathan et al., 2020).

• Branded House: Under this strategy, an organisation represents all its products under one brand name (Chimhundu, 2018). FedEx Express, FedEx Ground, FedEx Freight are some of the examples of the organisation’s sub-brands. Each sub-brand has FedEx before its logo. FedEx is in bigger font size than that of the sub-brands.

Figure 2: Example of a Branded House

(Source: boltgroup.com 2021)

Advantages: Gielens and Steenkamp (2019) state that one marketing strategy and one brand code covers all the offerings and schemes. Competition and confusion are avoided in this strategy. Ease in evolution and innovation as people trust the brand.

Disadvantages: Chimhundu (2018) has argued that consumers have an all-or-nothing approach. If the parent brand is underperforming, the product might fail. However, if the parent brand is performing well, the product might boost sales.

• House of Brands: In this strategy, various brands come under a single parent brand (Swaminathan et al., 2020). Some individual brands reveal their parent firm’s identity on packages, in the form of address or a small logo. For example, P&G (Procter & Gamble) company has branded labels, such as Bounty, Gillette, Crest, and Olay. Each brand has a unique brand identity and attributes.

Figure 2: Example of House of brands

(Source: boltgroup.com 2021)

Advantages: Das and Dube (2017) state that demographic expansion is broadened in this strategy. This architecture has strong testing brands. In the case of a bad reputation, the individual brand can take the heat while securing the company’s reputation.

Disadvantages: Managing several brands under one wing is costly. The parent company does not retain much power. Significant confusion is formed between the association and disassociation of brands.

• Hybrid Branding: This branding involves more than one branding strategy where a parent brand endorses other sub-brands of similar products (Asif et al., 2019). For example, Pepsi has several food snacks and beverages of its own and it offers different brands under its name.

Figure 3: Example of Hybrid branding

(Source: boltgroup.com 2021)

Advantages: Chimhundu (2018) found that Hybrid branding allows flexibility to stand-alone brands in displaying the parent brand in its labelling. When a brand is neglected or has a negative image, it gets support from the parent brand, which leads to an increase in its performance.

Disadvantages: Asif et al. (2019) stated that the model inherits the inflexibility shown by branded house model. It can create confusion between the brand managers and consumers regarding the association and disassociation between the parent and sub-brands.

Lidl applies to Hybrid Branding architecture. Crownfield, Baresa, Deluxe, Aura and others are the various brands, which are exhibited under Lidl. A house of brands provides the roof to several food and clothing brands all over the UK. Following table shows the difference between brand architectures:

Bases	Branded House	House of brands	Hybrid brands
Parent Brand	One brand represents all its products.	A parent brand represents the sub-brands of other firms.	It is the combination of Branded house and house of brands.
Product Failure	Product failure affects brand reputation.	Product failure does not affect parent brand reputation.	Product failure does not affect parent brand or any brand from the hierarchy.
Product Success	Product success enhances brand reputation.	Product success does not affect brand reputation.	Product success does not affect brand reputation.

Table 1: Difference

Brand Hierarchy

It is a branding structure of a brand’s different products and services (Barghash et al., 2017).

• Corporate branding: It refers to branding the product or service by the name of the corporate entity (Pranjal and Sarkar, 2020). For example, Microsoft is a corporate brand having its products like Microsoft Office, Microsoft Word and others under its brand name.

• Umbrella branding (family branding): It refers to representing several products under a single brand. For example, Apple Inc. Covers brands like iPhone, iPod, Mac Air, Mac Book and others.

Task 3 Brand leveraged/extended domestically and internationally

Critically evaluate how each of the following techniques may be used to leverage and extend brands

Brand extension

The brand extension (or brand stretching) may be defined as the marketing strategy where the company uses the existing brand name which is established for any new product or new product category (Marin et al., 2018). Lidl GB has planned to extend its growing network of 58 stores in Wales and has decided to add 70000 sq ft of space to a distribution centre. By the end of 2023, they are intending to grow its estate from 790 to 1000 stores (thegrocer.co.uk, 2020). This will create more job opportunities which will in turn support the local community and this is indeed a positive impact of the brand extension. Due to COVID-19 pandemic, it will be time-consuming on the part of Lidl in focussing on the expansion plans and store growth due to the massive surge in employment. According to uxconnections.com (2020), Lidl has introduced technology (AI WhatsApp chatbots) to leverage during the COVID-19 pandemic. This has enabled the customers of Ireland to avoid long queues and therefore find the quietest times to shop.

Lidl will be extending its business in the US; by the end of 2021, 50 new stores will be opened in the eastern United States. The total number of stores in the country will reach 150 by the end of 2021. The new location for the new stores will be in nine states including Delaware, South Carolina, North Carolina, Pennsylvania, Maryland, Georgia and Virginia (grocerydive.com, 2020). According to in.finance.yahoo.com (2021), Lidl will be leveraging technology (integrating 5G) in 2021 to deliver higher data speeds and huge network capacity.

Brand extension has strengthened the brand image of Lidl and will in future do the same. On the contrary, the brand extension might create a negative brand image of Lidl and thereby weaken it, prohibiting it from a further extension, if the recent COVID-19 situation is taken into consideration (mmrstrategy.com, 2020).

Stretching/vertical extension

Vertical extension/Stretching refers to the initiation of a new product or service in the existing category with a difference in price or quality level.

Lidl had launched Red Hen Breaded Chicken Nuggets (450 gram) and around the same time they also launched Red Hen Southern Fried Chicken Pops (210 gram), the only difference was the quantity of the two products (hertfordshiremercury.co.uk, 2017).

This vertical extension of Lidl mostly has increased the demand for the respective products in the market, but these two products have been suspected to get recalled as salmonella contamination has been found in some of the products in the batch. The customers will be taking them back to the Lidl GB store for a full refund. In 2021, Lidl might be launching new bakeries in the bakery category across Europe, though they have not yet confirmed the names of the products in the bakery category (lidl.com, 2020).

By controlling its brands, Lidl will be more able to control and deal with the problems regarding the feedbacks of the customers regarding the brand, which in turn will have positive impacts on the company. However, the management at Lidl might lose focus on the core competencies and focus more on the newly added assets, which will have negative impacts on the company.

Line Extension

Line extensions aim at providing more variation and capture more of the market within a given category (Liu et al., 2018). Dave’s Killer Bread organic bread (21 whole grains and seeds) and Dave’s Killer Bread organic bread (Good Seed) are line extensions of Lidl, which were launched one after the other in the organic bread category.

Lidl already has aims regarding focusing more on more leveraging in the introduction of line extensions in their product categories, which will in turn attract the customers towards the most demanding product categories. Lidl will be adding new wine in the Rose wines and Summer Whites series respectively, by the end of the year 2021 as during the COVID-19 pandemic they were unable to launch any new products (reversewinesnob.com, 2020).

Through line extensions, Lidl will get an established and loyal customer base and will meet the variety of needs of the customers. Since line extensions involve variations attached to a brand, it might tempt the managers of Lidl to add too many variants to the core brand and the brand loyalty might thus get weakened.

Evaluate how the Lidl could be managed collaboratively and in partnership both at a domestic and at a global level.

At Domestic Level

Lidl sourced millions of euro worth of products from over 275 suppliers on the island of Ireland. A significant portion of this is for the Lidl supermarkets in Europe and the United States, providing the opportunity to the local suppliers to grow and extend their exports into other markets. Lidl has been collaborating with domestic suppliers for local supply of fruits and vegetable and their domestic supplies include Preferred Selection brand’s Marcona Almonds, Balsamic Vinegar and olive oil, cashews with honey and salt, a product called ‘Lidl Love It’, pasta and little private lines including personal care products like colognes and moisturizer.

At the domestic level, Lidl can manage its brands and boost brand equity through the development of strong brand partnerships. With the establishment of successful domestic brand partnerships, Lidl brands can build trust among the consumers who in turn will be having a positive experience with the brand. Lidl can work more on the development of its application for providing better online grocery shopping services to the consumers as online shopping has become the new normal’s important segment in the COVID-19 times.

At Global Level

At the global level, Lidl has various partners such as Red Tractor, UTZ Certified, RSPCA Assured, Fairtrade, RSPCA Assured, MSC, Sedex, BRC, SECLG and BSCI (corporate.lidl.co.uk, 2020):

The partnership of Lidl with Red Tractor aims at ensuring that meat, poultry, fruits and vegetables go under strict food hygiene, animal welfare and environmental standards. This in turn provides assurance to the customers on receiving fresh locally sourced high quality meat and poultry. Lidl GB partnered with BRC, aiming at a 2020 ethical labour policy stating that workers in the supply chain would not pay for their job. BSCI initiative supports 1800 retailers, importers and brands to improve the working environment in factories and farms. Lidl has recently entered into a partnership with esports through SK gaming (esportsinsider.com, 2021). This is the first time Lidl will be making its move into the esports gaming community and is expected to provide SK Gaming with a range of fresh foods and products at the organisation's player facilities in Cologne and Berlin, Germany.

At the global level, Lidl GB can focus more on co-branding to increase the possibilities for brand revitalization, growing more market share as due to COVID-19 there were market share losses in 2020 along with high unemployment rates. Lidl can collaborate with their strategic partnerships, such as LGFA, supporting more of women empowerment through sports and other activities. Lidl can also aim at a 'BETTER TOMORROW' sustainability programme in the future. In this context, Lidl can focus on working with various business partners in the future for building up sustainable relationships, which will in turn contribute the local communities. Since global brand management requires coordination amongst various countries, Lidl can also extend their business to Southern and Western Asia.

Task 4 Evaluate techniques for measuring and managing brand value over time.

Brand value

The brand value may be defined as the financial value of a particular brand, which governs its sale or replacement (Sinclair et al., 2017). Techniques to measure it are as follows:

Market share may be defined as the percentage of total sales in any industry generated by a particular company. For example, Lidl has a 5.9% market share in the UK that indicates a better position. The pros of market share include increment in competitive advantage by increasing market shares. The con includes the requirement of capital investment in the expansion of the market to increase market shares. Unilever is one of the world's top consumer goods company, and their total brand portfolio is US$ 42.9 billion and they had spent $7.6 billion on brand and marketing initiatives in 2017 to attain a good market share.

Brand recall may be defined as the factor helping in getting more customers to stick with any brand as well as to buy products of the brand repeatedly. The pros of brand recall include cheap pricing of the products and the cons include difficulty in receiving information regarding the company and the products. The store layout is extremely simple and Lidl has planned to improve the grocery shopping experience more and more shortly. The products which have faced problems in the market in the past and are facing problems at present, regarding their reviews from the customers, will be taken into account and by 2022 will be recalled. Marks and Spencer (M&S) transformed from creating clothing sub-brands, food, lifestyle sectors and homeware categories. When brand values and management are considered, M&S has proved to companies throughout the world about the importance to accommodate the needs of changing audience and maintaining consistency in brand management simultaneously. Their brands nowadays come with the new slogan "Spend it well", which proves that their business has undergone evolution with time (medium.com, 2017).

Brand Awareness

Brand Awareness is the marketing term describing the degree by which a consumer recognises any product by its name (Foroudi, 2019). Following techniques can be used:

Surveys conducted by a company on consumer behaviour and their feedback on the products. Surveys conducted mostly have a positive impact on the company as the company gets to know what its consumers are thinking. However, negative impacts might also arise due to false feedbacks by some of the customers regarding particular products. According to Oliver Wyman (2019), the views of the customers and their shopping habits at Lidl stores opening in their area were accounted and it was found that 48% of 600 consumers shopped there regularly.

Search engines are software systems which are designed to carry out web searches. The pros of search engines include protection of data, absence of targeted ads, getting unbiased search results. However, the cons of search engines include less advanced results and lack of privacy of some searches. Lidl has optimised its website and search engines for better shopping experience because consumers prefer online shopping more than the offline one (campaignlive.co.uk 2020).

Social media may be defined as the computer-based technology which provides sharing of ideas, thoughts and information through virtual networking and communities. The pros of using social media include the huge audience, fast networking and easy interaction procedure with the audience. The cons of social media in brand management include the risk of negative publicity and loss of control on the existing customer reviews. Lidl keeps pace with the upcoming social media trends and updates their social media pages regularly. They introduced their social media campaign on Christmas 2019 and appointed We Are Social as a social media agency (campaignlive.co.uk 2020).

Consumer Attitudes

To measure the consumer attitudes, the following techniques can be used:

This can be done through observation (qualitative method) of the customer behaviour and conduction of psychological tests for focusing on the attitudes of the customers. Pros include positive or negative behaviour from the customers can be noted down and necessary improvements can be made to solve their problems. The cons include misinterpretation of the results obtained from the tests conducted on the behaviour of the consumers. According to progressivegrocer.com, (2018), customers showed a positive attitude towards the products of Lidl. Customers stated that their main reasons to shop from Lidl were good quality, satisfying promotions and freshness of the products.

Survey (Quantitative methods) on the consumers’ attitudes towards the products of the company has both positive and negative results. Though in the general survey is a time-consuming process and quite risky, it helps in identifying the consumer needs and demands; through this process, a company gets to know where it is lagging behind and in which segment they have flourished till date. According to a survey by progressivegrocer.com (2018), Lidl had been winning over the food retail market with their younger consumers ageing between 18 and 34. These consumers were reported to have shopped there regularly as they were impressed by the product quality and value prices of Lidl.

Purchasing Intent

The most widely used 5 point scale (Likert Scale) is a measurement of attitudes, beliefs and opinions. The advantages of the 5 point scale are that they are quite easily understood methods and this makes question-answering easier on the part of the customers. But there are disadvantages too, as the 5 point scale gives only 5-7 options of choice and therefore failure occurs in measuring the true attitudes of the customers. The loyal customers rated Lidl well on the 5 point scale as 5 (strongly agree) thus creating most value regarding buying more from Lidl, longer customer retention and making positive referrals to the potential customers. Some of the new customers did not rate Lidl well on this scale and therefore did not exhibit the value-creating behaviours (customer.guru, 2021).

Conclusion

It is found from the article that brand management may be elucidated as the process where a brand's reputation is managed and the audience perception is improved in a way which can build brand awareness, equity and loyalty. This study has highlighted the brand leverage or extension of Lidl in terms of domestic and global level. Furthermore, it has also focussed on the evaluation of the measurement and management of brand value and critical analysis of the brand extension, vertical extension and line extension of the Lidl. The techniques to measure brand value. Purchase intention and others have been discussed with some examples.

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