MNM3710

Brand Management

Woolworths Brand Building Strategy

by

Kefiloe Moatshe 42360854

Unique number:728924

Date of submission

15.06.2020

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DECLARATION Commented [A1]: This declaration is compulsory.

Complete and sign the following declaration. See section on plagiarism in tutorial letter 101. You are
not allowed to copy and paste directly from the textbook
or internet sources. Please paraphrase otherwise you
will be penalised.

PLAGIARISM DECLARATION FORM

Name : Kefiloe Moatshe
Student No. : 42360854
Module code : MNM3710

I declare that this assignment entitled, “Woolworths brand building Strategy “for
“MNM3710” is my work and that all the sources that I have used or quoted have been
indicated and acknowledged utilizing complete references.

Signature : KGN Moatshe

Date : 15 June 2020

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 TABLE OF CONTENTS Commented [A2]: Right click, update field to update
the table of contents

DECLARATION ................................................................................................................II
1 INTRODUCTION ......................................................................................................... 2
2 BRAND STRATEGY ................................................................................................. 3
3 BRAND POSITIONING ..............................................................................................3
3.1 FIVE POSITIONING STRATEGIES CHOSEN FOR WOOLWORTHS .............. 3-5
4 BRAND EXTENSION ................................................................................................. 6
4.1 FOUR BRAND EXTENSION STRATEGIES FOR WOOLWORTHS ............... 6-8
5 BRAND ELEMENTS .................................................................................................. 9
5.1FIVE ELEMENTS OF CHOOSING A BRAND NAME…………………………..9-10
6 BRAND STRENGTHEN ............................................................................................11
6.1FIVE STRATEGIC TOOLS IN THE MATURITY STAGE……………………11-13
7 CONCLUSION ......................................................................................................... 14
8 LIST OF REFERENCES ..........................................................................................15

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 Woolworths Brand Building Strategy

INTRODUCTION Commented [A3]: Provide an overview of the SMME

based on the case study.
Brand Positioning
Specify what will be highlighted in the assignment.

Five positioning Strategies Commented [A4]: You cannot leave as “subheading”.

You need to change based on what you are discussing.

You may add as many subheadings as you wish.

Brand Extension

Four Brand Extension Strategies for Woolworths

Brand Elements

There are 5 elements that Woolworths used when choosing its brand name that
differentiated them from their competitors

Strengthening brands

Five Strategic Tools that a Brand Manager can follow in Strengthening the Brand in
Commented [A5]: Provide a conclusion to sum up your
the Maturity Stage discussion.
Commented [A6]: Use the Harvard referencing
CONCLUSION technique.

You need to use in-text references in your discussion as

well.

LIST OF REFERENCES Be consistent.

See guidelines for referencing under “Additional

Resources”.

Commented [A7]:
Any other additional information.
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1.Introduction

Woolworths Holdings Limited the South African retail company known as Woolies first
opened its doors to the public in cape town South Africa in 1931. Its founder Max
Sonnenberg captured the public's imagination with a dynamic store policy that set
Woolworths apart from other retailers. Woolworth's second branch was opened in
Durban and another in Port Elizabeth and Johannesburg in 1932 and since then
Woolworths has consistently built its reputation for superior quality, exciting innovation,
and excellent value.

Woolworths is the only retailer that is known for its brand name and the only retailer of
its kind in the country offering fashion, food, beauty and homeware and some carefully
selected well-known brands including country road and David Jones. In 1994
Woolworth's financial services which are a joint venture between Woolworths South
Africa and ABSA Bank which were incorporated in 2000 to provide Woolworths
customers with focused financial products and services.

The value proposition that Woolworths has stuck to and implemented has seen the
brand grow to over 400 stores across South Africa, Africa, and the Middle East.
('Superbrands ZA: Woolworths ",2010:1) Another major success of the Woolworths
brand has been the commitment to technology, innovation, and the best practice as
they can count several awards and points on their belt. Woolworths embraced
technology by coming to a lease agreement with the National Cash Registers (NCR)
in the late 1960s and began using computerized merchandising systems by the early
1970s; Woolworths forward-thinking extended even further by being the first South
African retailer to introduce 'sell-by dates ' on their products and food product
packaging. The portfolio has four main focuses on the positioning strategies that
Woolworths followed to build a stronger more profitable customer relationship, Brand
Extensions that Woolworths chose to grow their products, Brand name to differentiate
themselves from other retailers and strategic tools they used to strengthen their brand
name.

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2.Brand Strategy

The brand strategy aims to enhance the internal and external opportunities of the
brand. The brand strategy must be strategic, and proactive rather than tactical and
reactive. Each brand must find its terminus to success in the shape of unique and
relevant brand identity and brand vision, which are the first element that must be in
place when developing a brand. Woolworth's strategy was to create “high quality and
better priced “own brands to close range gaps where branded alternatives exist. This
involved rebalancing its capital expenditure between stores and existing store
refurbishments, which allowed Woolworths to position its brand by becoming one of
the leading retailers in the country that provides customers with superior quality
products.

3 Brand Positioning

Brand positioning is the act of designing the company’s offer and image so that it
occupies a distinct valued place in the target customer’s minds (Kolter and
Keller,2016). It is also a way to delicately position the brands in the minds of customers
so that they think of the brand in the right or desired manner, which will, in the end,
maximize the potential benefit of the company.

3.1 Five positioning Strategies

The positioning offers a whole range of differentiating strategies for brand managers
to use in their pursuit. It is the responsibility of the brand manager to decide which of
these strategies will perceive the Woolworths brand as being unique and different
(Temporal 2002:37-49; Sengupta,2005:76-107).

• Positioning by corporate identity: This strategy is when companies rely on the

strength of their corporate name use, the company can claim competitive
superiority whenever new products are being introduced. Woolworths high
quality, constructive, trustworthy, and honesty and exemplary customer service
are part of its cooperate identity. Their customer can always expect top-level
products that have passed the Woolworths quality test and met the highest
customer expectation. Woolworths packaging design to outsourcing on the best
quality products with their exceptional customer service shows that Woolworths

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 is serious about its positioning by corporate identity. Its corporate culture which
reflects in its products and services and grows its identity has become the spirit
of Woolworths.
• Positioning by brand endorsement: This is in the event of a successful brand
for example Woolworths clothing can use the strength of the name to enter into
a different product category Woolworths food and beauty products. there should
be a perceptual fit to where the consumer perceives the new item to be
consistent with the parent brand. Woolworths considers itself a brand -value-
driven business, each of its sub-brands is aligned with the main Woolworths
brand. This differentiates them from quality fashion that is relevant to their
customers through quality segmented, they achieve this by continuing to build
fashion creditability and performance by delivering differentiated, design-led
Studio W brands. By having a centralized procurement process, Woolworths
can control their retail cycle allowing uniqueness, Authenticity, innovation, and
quality, Woolworths corporate branding has been successful and when
customers see the Woolworths logo, they can associate it with the brand value
and positive experiences.
• Price, Quality Positioning: Customers look at the different brands in a product
category, price differently with different standards of quality, where they will
then decide which price-quality levels are most suitable for a specific need.
Price /quality positioning can also be used to communicate the message of
value positioning. Customers play an important role in determining a company’s
brand. Woolworths customers perceive the organizations in terms what the
quality of its products and services. Customers' perceptions of a brand can
influence the customer's behavior, which will ultimately affect the profitability of
a business. Known as one of South Africa's most expensive retailers,
Woolworths has a reputation for fresh produce and high-quality foods combined
with innovative packaging Woolworths customers have become known of what
to expect from the brand.
• Target user Positioning: the strategy provides focus to the marketing programs
of companies who know their target market well, they use generic products for
example banking services and offer it to many different customer groups. When
Woolworths introduced its first financial services card in a joint venture with

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 ABSA it was to provide Woolworths customers with focused financial products
and services.
• Aspiration positioning strategy: Common themes when using this positioning
strategy my include status and prestige related to wealth achievements, self -
improvements, and non-monetary achievements. The focus of this strategy is
on self-expression as most people have a need to express themselves in some
way and will, therefore, associate themselves with brands that do so. If we look
at the Woolworths water challenge which made people change their accent.
Students claimed that after drinking the Woolies water their accents changed
and they started using words such as “metamorphosis” and photosynthesis “in
this way expressed themselves and therefore associated themselves with the
Woolworths brand.

Positioning process and Identification and motivation

Woolworths positioned its brand according to its clients base they knew they had to
bring something different with quality and taste. The fisting they did was to find reliable
suppliers that will be able to supply quality products through out the year with out fail.
Most of Woolworths products are produced in south Africa especially on the food brand
but they do export some of their fresh produce from Abroad , Woolworths also looked
at the Price of their products and how it will affect their goods being bought ,because
Woolworths knew their product and its quality its customers are able to identify with its
products and have become known of what to expect from the brand.

Woolworths is known for a sustainable clothing in business, its textile industries ,

include fiber production (natural and synthetic).Woolworths actively take part in
farming and sourcing of its produce and raw material to offer its customers high quality
products and this allowed Woolworths to differentiate its self from other retailers as
their products can only be found in their stores and not in any other retailer .

By positioning its self as a financial services it has allowed its customers to know
and trust it as a reliable brand .Woolworths has positioned it self in a way that its brand
will always remain unique in any product they decide to launch ,its walk mate kids
shoes are the most trusted by parents as they strong and durable . their food range
and spices offers a taste and quality that cant be found in other retailers ,and with such
quality price is not a problem for many .

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‘

4. Brand Extension

Management study guide (2013) defines brand extension as the use of an established
brand name in new product categories. According to Jean-Noel Kapferer (2004) brand
extension is about business and growth opportunities and the act of using the mother
brand to launch new products in the market.

The most fascinating thing about brand extension is that many businesses find it easer
to extend on a current brand which is feasible rather than creating a new product
launch in the market that is not known to the public , customers find it easy to associate
and by a product that they are familiar to .one of the major results of brand extensions
is the benefit in cutting down on marketing and communication budgets as well as the
potential damage to the brand should an unknown product be launched in the market.
It provides an opportunity to build strong competition, to capitalize on the value
proposition of the mother brand and it increases the credibility of the mother brands
identity in other words its value proposition in the market.

4.1 Four Brand Extension Strategies for Woolworths

Brand extensions are flagship products and the extended product belong to one-of-a-
kind product classes, but the identical type of product. A company extension provides
an extra opportunity for customers to experience a appreciated brand in a new product
category (Fournier,1998:343:Park&Kim,2002:190) Brand extension involves making
use of and applying the installed core company name to new merchandise to reap the
fairness of the original core company and also to seize new and unexplored market
phase .Extended company both some distance and near with core brand are regarded
recommended for core brand due to extra profitability . According to Barone (2005),
Its commonly assumed that recognized brands require low fee and costs of
introduction such as advertising value and income promotions. A distinction can be
drawn between the following types of brand extension (Keller&Aaker,1998:356):

• product brand extension: In a product brand extension, an existing brand

name is used to introduce a new product. This is when organizations use
existing brand name that is distinct from corporate name to introduce a new

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 product outside its current offerings. When Woolworths opened it doors in
South Africa in 1931 it mainly operated as a clothing store which also sold
jewelry and tools at that time customers could not bowers around the shop but
had to buy over the counter. In the early 2000 Woolworths opened its first
Woolworths food store which introduced new age in innovation for Woolworths
that provided high-quality of food products combined with innovative packaging.
Woolworths did not only stop there on its product brand extension, but they also
introduced beauty products and cleaning products under the Woolworths
brand. Woolworths food ranged from organic food, freshly baked bread and
cakes and free-range eggs, Woolworths also offers A grade meat and is the
first retailer to introduce “sell by dates” on their products and food product
packaging.
• corporate brand extension: A corporate brand extension occurs when
organizations relies on the corporate brand name to launch a new product. A
corporate brand extension clearly identifies an organization with the product
and evokes different reactions from consumers than brand extension.
Woolworths focused its brand on direct service by selling their own store brand
rather than selling other well-known manufacturing brands. The Woolworths
corporate brand extension is highly controlled by Woolworths Holdings Limited
and cannot be found in other places. Woolworths could have easily sold other
brands like Clover, Albany bread or Robertson’s spices but they stuck to
growing the corporate brand by producing more of their own brands
.Woolworths corporate branding has been successful ,as when customers see
the Woolworths logo they associate it with the brands unique value and positive
experiences. Woolworths reputation has allowed the company to differentiate
its products in highly competitive market and attract more customers to the
company products resulting in Woolworths premium pricing and positive
reputation.
• Line Extension: Is when an organization exploits only one brand in the market,
it can decide to launch different products variants within the same product
class under an already -existing brand name. Byline extension the product will
be a slight variation to the existing product. Woolworths implemented several
growth strategies such extending their product line in terms of fashion with

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 David Jones Limited, Country Road Limited, Woolworths Financial services
with joint venture with Barclays Africa Group. Woolworths also specializes in
selling food as well as clothing, beauty products and home-ware products and
provides financial services to its customers as part of its line extension.
Woolworths stores have the food section as well as clothing section in one
shopping space, whereas most of their competitors do not, except for Pick and
pay who launched their first standalone clothing store in 2002. The line
extension strategy for Woolworths increased its profits and customer
satisfaction and loyalty.

Line Extension

• Co-branding: According to Simonin & Ruth (1998:30) co-branding is defined

as company alliance which entails manufacturers from one-of-a-kind
organizations that mix to have interaction in fine, strategic or tactical brand-
building programs, or to create co-branded market choices. For example, When
Woolworths introduced Taste as part of the Woolworths brand extension, Taste
is a consumer magazine with a cover price to some extent Woolworths felt the
same challenges that other print media experienced today it was important for
them to make sure that the content remained curated and relevant and not just
a selling marketing tool. It had to provide creditable product to the shifting
audience while also meeting the client’s objective. Taste brand is fundamentally
different from other Woolworths marketing it is an independent product which
can be considered as co-branding of Woolworths products, the intention is to

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 use Taste as a lean-back brand experience which can offer end to end solutions
for Woolworths customers who love food.

5.Brand Elements

Brand elements are referred to brand identities, those trademark devices that serve to
identify and differentiate the brand (Keller;2003:175). Brand elements that identify and
distinguish one product from another are brand names and brand marks. According to
Kolter (2008:211) choosing a brand name depends on the destiny that is assigned to
the brand. One must therefore distinguish the type of research related to creating a
full-fledged brand name. ninety percent of the time companies want a brand name that
describe the product which the brand is going to indorse, Woolworths is a well-known
brand in South Africa. They are known for general high-quality products and services.
They’re branding carries this through with clean images, often with white and black
background and clean fonts and advertising.

5.1 There are 5 elements that Woolworths used when choosing its brand name
that differentiated them from their competitors.

• Memorability: in order to achieve high level of brand awareness, brand

elements can be chosen that are that are inherently memorable and therefore
facilitate recall or recognition in purchase or consumption setting
(Keller,2008:140). Customers associate the Woolworths logo and hear of the
name Woolworths with the brands unique value and positive experiences,
reliability of the organization, the quality of is products and services .With Pick
n Pay the main reason why people shop at pick n pay is because customers
largely describe pick n pay as friendly and trustworthy . People have a positive
image of the Pick n Pay brand therefore causing the customers to be loyal to
the retail supermarket.
• Meaningfulness: Brand elements may take all kinds of meaning, varying in
descriptive, as well persuasive content. Through the Woolworths logo history
of 80years the design of the brand has been basically consistent throughout the
years the meaning to the color font, and shape of the “W” is that of simplicity,
balance and stability. The Pick n Pay brand aspects such as font, graphic
devices and color palette was changed in order to drive grater appeal while
optimizing clarity and impact.

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 • Likeability: Brand elements can be chosen that are rich in visual and verbal
imagery and inherently fun and interesting, which are also aesthetically
pleasing. When comparing Woolworths alcohol ads with the Spar Tops
advertisements most of Woolworths customers buy their wine because of the
sweet and authentic taste while Spar Tops thrive in its fun and funny TV adds.
Spar Tops customers buy their alcohol because of what they can get for the
value of their money and the different types of brands they can buy at tops.
• Transferability: This refers to a brands transferability both in a product category
and in a geographic sense. In general, the less specific the name the more
easily it can be transferred across categories. Woolworths focused its brand on
direct service by selling their own store brand rather than selling other well-
known manufacturing brands. The Woolworths brand is highly controlled by
Woolworths Holdings Limited and cannot be found in other places. while
products produced by its fellow competitors like Tiger brands and Unilever
brands are sold in number of retailers such as Makro, Checkers Hyper, Shoprite
and Pick n Pay.
• Adaptability: This refers to the adaptability of the brand name overtime due to
changes in customer values and opinions, or simply because of a need to
remain contemporary for example logos and characters can be given a new
look or new design in order to make them appear more modern. Woolworths
modified its logo in 2010 the company stuck to simple design and the color
remained unchanged .The “W” placed in white square and the Word
“Woolworths” in white against the black back round .Woolworths black and
White color implies openness and professionalism the color combination
depicts commitment towards quality and balance. The Pick n Pay log was
changed in 2007 in a way of making its brand to appear modern and relevant
while.

6. Strengthening brands

Strengthening of brands can be defined as new brands learnings and paradigms to

address new opportunities without destroying what has been built already and how to
broaden the appeal without diluting the brands positioning and success date (Brands
& Branding ,2007:73). Brand Strengthening is closely related to brand equity, the value
that is carried by the brand is essentially a marketing term that donates the perception

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of customers towards the brand value invested in over a period of time. Woolworths
has managed to strengthen its brand by delivering on its promise to its customers and
stakeholders. Its process was influenced by products and services, employees, top
management, relationship with suppliers, investors the e environmental society,
strategic partners, competitors and innovation value creation and its financial strength
and strategy.

6.1 Five Strategic Tools that a Brand Manager can follow in Strengthening the
Brand in the Maturity Stage

• Strengthening by adding further differentiation: According to Kotler

(2003:315) differentiation can be defined as the process of adding a set of
meaningful and valued differences to distinguish the company’s offerings from
competitors offering. Woolworths used the differentiation method by producing
high-quality food products, combined with innovative packaging, fresh food
produce and freshly cooked ready to eat meals. This allowed Woolworths to
become known for its brand reputation and to differentiate its products from the
competitive market. Woolworths brand delivers highly important valued
products as its slogan says, “Woolworths with a difference”. It offers a distinctive
product with different quality and taste that no other brand offers. Woolworths
products remain Superior to other brands as it made from the best quality
organic products. Most of their products remain pre-emptive as their sell by
dates its 24 hours which is something that other retailers do not practice their
meat is usually marked down every afternoon at 2pm and its sold at a lesser
price this allows Woolworths to pack fresh meat on a daily bases which is on
health practice that other retailers fail to do. Woolworths offers affordable bulk
sales on a monthly basis like their vegetable pack for R129 and 5 Woolworths
pastas for R50.00. Woolworths is considered expensive by many but the value
for your money is one thing that its customers know they won’t regret.
Customers perception of the brand has the ability to influence customer
behavior which affects the profitability of the business.
• Strengthening by using brand Icons: A brand icon is anything that is unique
to your brand and that brings up an image of the Woolworths Icon in the
customers mind icons can be categorized according to the five senses

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 Visual icons: The Visual Icons include the Woolworths logo, its distinctive and
quality packaging and its black and white corporate color.
Sound icons: Woolworths does not offer many TV adds but one thing about its
slogan it clearly states, “Woolworths with a Difference”.
Touch icon: Woolworths products says a lot about its quality, the quality clothing
brands and food they offer are one of a kind. They build the fashion creditability
and performance by delivering differentiated, design-led private label brands.
Smell icons: Woolworths understand this category very well when you enter the
Woolworths food store the first thing you smell is their freshly brewed coffee.
their vegetable section smells of fresh herbs then you get the sent from the
bakery and rotisserie isle. When you enter the Woolworths, clothing stores you
get hit by the scent of fresh cotton and the lavender sent from their skin
products.
Taste icons: The Woolworths taste is one of a kind the ingredients they use in
their food is A grade quality products that are only produced for their stores.
• Strengthening by using brand characters: (Marketing week ,2010:17-19)
Customers heart strings are pulled by using memorable characters .In the kids
clothing isle Woolworths has a section of Pajamas for boys with action
characters like superman , batman and ninja turtles they also have a section in
the girls range like hello kitty , Hanna Montana and micky mouse this brand
icons is what makes kids love the kids section , Woolworths also introduce this
super hero and cartoon characters on their dairy items like yogurt and milk
shakes .
• Strengthening by brand hijacking: Brand hijacking means to strengthen its
brand via better experience. A brand hijack ignores the conventional definition
of quality in brand hijack quality is still crucial but redefined. Customers hijack
brands because they looking for a meaningful physical or emotional connection
(Wipperfurth;2005:107).let’s take the Woolworths water brand that was
hijacked by university student who stated that drinking Woolworths water
changed the way they used words ,many brands followed after that trying to
hijack new trending way of advertising their branded water.

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• Strengthening by building brand trust and brand resonance: Building trust
is about building trust in the company and trust in the brands. Trust is about
honest, integrity and fairness. At a corporate level, trust is about being honest,
not taking advantage of suppliers or customers (Brands & Branding,2008:45).
Woolworths has succeeded in providing high quality products, convenience and
fast service. Woolworths can be held accountable for their products and
services across various platforms even after it suffered a blow when it was
accused of plagiarism when they designed a baby carrier similar to Shannon
Mc Laughlin they also used her brand name and sold the baby carries on line
Woolworths admitted in using MC Laughlin brand and later removed they baby
carries off the shelves .The Woolworths group is committed to transparency
and accountability .Woolworths is already led by great value and cultures , the
brand needs to maintain its strong corporate identity .

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7.Conclusion

Woolworths main focus is on retaining its current customers, by acquiring customers

in their target market. Woolworths has been successful in its branding cause when
their customers see the log or hear the name Woolworths, they associate the brand
with unique value and positive experiences. Woolworths has successfully positioned
its brand by building a corporate brand that understands the role that their customers
play in its transparency. Woolworths managed to build and maintain its reputation by
delivering on its promise to customers and stakeholders. As being known as the most
expensive grocery store through the sale of premium products Woolworths used brand
extension strategies to grow from fashion, beauty, food and financial services.

Woolworths products have unique products that can be differentiated from their retail
competitors they offer high quality packaged products with innovation packaging.

The Study has shown that Woolworths has Grown as a brand with more than 80 years
in the retail business Woolworths has proven that it is a trusted brand and value its
customers’ needs and wants.

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 8. List of references

[1] Aaker, D.A and K.L. Keller .1990. “Consumer evaluations of brand extension” The journal
of Marketing :27-41
[2]Africa.No5.Available:http://www.governance,usb.ac.za/no5_woolworths_case.pdf
(Accessed 11 October 2017).
[3]Anon.2017.WoolworthsMarketingMix.Available:
www.mbaskool.com/marketingmix/services/17155-woolworths.html(Accessed11October
2017).
[4] Chen Kuang-Jung, and Liu Chu-Mei .2004, “Positive Brand Extension Trail and Choice of
Parent Brand”, Journal of Product and Brand Management, Vol13(1), pp 25-36
[5] DelVecchio Devon .2000,” Moving Beyond fit: The Role of Brand Portfolio Characteristics
in Customer Evaluations of Brand Reliability”, Journal of Product and Brand Management,
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[6] Desai KapleshKaushik; and Keller Kevin Lane .2002,” The Effects of Ingredient Branding
Strategies on Host Brand Extendibility”, Journal of Marketing, Vol.66(1) pp.73-93
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Strategic Thinking, Kogan Page Publishers
[8] Keller, K.L. .2000.” The Brand Report Card” Harvard Business Review 78(1): 147-158.
[9] Keller, K.L. .2003.” Brand Synthesis: The Multidimensionality of Brand Knowledge”. Journal
of Consumer Research 29(4):595-600
[10] Klopper, H.B and North, E. 2016” Brand Management “Fifth Edition of Brand
Management, Pearson Education of South Africa

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[11] Inui, T., Ito, K. and Miyakawa, D. 2017. Export Experience, Product Differentiation and
Firm Survival in Export Markets. The Japanese Economic Review, 68 (2): 217-231)

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