In my previous post I have defined the term brand and how are they different from products. Now let us see what are the characteristics of a brand that define it to be a successful brand.
A successful brand is distinguished from rest of the brands using 3 Acid tests and 1 Decisive test.
Let us first talk about the 3 Acid tests that define a successful brand.
- Dominant leading market share in the market in the segment in which you are competing.
A large dominant presence on the shelf
A large share of voice/communication in terms of money spend than your competitors
Share of innovation must be very high
Share of customer wallet should also be high
- Dominant leading market share means that you must have a share 2-3 times higher than that of your rivals.
Example: Maruti has 60% of market share whereas Hyundai has 30%.
You must command premium prices for your brand compared to rival.
- You must innovate continuously so that you get higher profit, higher price sustainability over a high period of time against attack from new competitors.
- Strong brands must only be “profit rich but also be cash rich”
The above four points talk about the tests on which we can characterise a brand as a successful brand in the market compared to rivals.
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