Frameworks useful for developing brand strategy

To continue being chosen by consumers, it is essential to establish a clear brand strategy.
That said, many people may feel that while they have a general sense of what “brand strategy” means, it remains somewhat ambiguous or difficult to fully grasp.
Brand strategy refers to the process of defining the desired brand, executing various initiatives to enhance brand value, and ultimately gaining a competitive advantage in the market.
Consumers form impressions by comprehensively perceiving a company’s atmosphere, logo, products, and services. This collective perception is what constitutes a brand. Whether a product is chosen among many alternatives depends not only on its performance and price, but also on the value of the brand itself. Therefore, it is crucial to ensure that consumers correctly understand the intended brand image—what the brand represents, what it offers, and what it aims to achieve—and perceive its value as intended. This is precisely where brand strategy plays a vital role.

By developing and executing a brand strategy, brand awareness increases and consumer trust is strengthened. It also helps establish a clear brand image, making it possible to cultivate a larger base of loyal customers. Below are some of the key benefits in more detail.

A well-defined brand strategy enables companies to clearly communicate the value of their products and services to consumers, allowing for effective differentiation.
By establishing a strong brand concept and consistently implementing related initiatives, consumers will come to automatically associate certain characteristics with the brand at a glance. This enables clear differentiation in the marketplace. For example, the beef bowl chain Yoshinoya is widely recognized for being “tasty, affordable, and fast” across all its locations. This illustrates how differentiation is achieved only when consumers clearly perceive and internalize the brand’s value.

Customer loyalty refers to a state in which customers trust a company, feel an attachment to it, and have a strong intention to purchase its products or services. By carefully developing a brand strategy in advance and defining the value to be delivered—as well as the image the brand aims to convey—over the long term, companies can cultivate strong customer loyalty.
Consumers are constantly comparing options among competing brands. However, when a brand’s value is strongly recognized, consumers are able to make decisions without hesitation.
In addition, beyond improving repeat purchase rates and average transaction value, a strong brand strategy can lead to an increase in customer lifetime value (LTV), which represents the total amount a customer spends on a brand over a certain period or even throughout their lifetime.

A well-executed brand strategy can help companies avoid price-based competition.
In competition with other companies, the most common battlegrounds are technological advancement and pricing. For example, in the case of electronic products such as personal computers, competition often centers on performance, features, and price. However, for consumers, technology and price alone do not inherently constitute value. Instead, value is derived from how well a product or service solves their problems, as well as the sense of security and trust they associate with the brand. By building this perceived value, companies can move beyond simple price competition.

Step 1: Conduct analysis
Step 2: Define the target
Step 3: Clarify the brand identity
Step 4: Visualize and communicate the brand image

In this section, we will introduce some of the most commonly used analytical frameworks for Step 1, the analysis phase. The three frameworks are “PEST Analysis,” “3C Analysis,” and “SWOT Analysis.”

PEST analysis is a framework primarily used in business strategy and marketing to understand and anticipate how the macro environment (external environment) surrounding a company—such as political, economic, social, and technological factors—may impact the business now and in the future.
Because PEST analysis can feel somewhat abstract and does not directly lead to immediate sales or profits, it is sometimes overlooked. However, neglecting it can result in a company falling behind the times without realizing it, and in some cases, even large corporations may face the risk of failure. It is therefore a critically important framework.
Specifically, PEST analysis examines and evaluates environmental changes and their impact from the following four perspectives:

● Political Factors (Politics)
Legal reforms, changes in government, diplomatic conditions, etc.
● Economic Factors (Economic)
Economic trends, inflation/deflation, financial indicators, etc.
● Social Factors (Social)
Demographic trends, cultural changes, etc.
● Technological Factors (Technological)
Advancements in new technologies, investment trends, M&A, etc.

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The next step is 3C analysis. This framework involves researching three key elements—company, competitors, and customers—to identify strengths and weaknesses and uncover the key factors for success.

● Customer / Market (Customer)
Customer purchase intentions and capabilities, market growth potential, etc.
● Competitor (Competitor)
Competitive landscape, differentiation from competitors, etc.
● Company (Company)
The company’s management resources, current strengths and weaknesses, etc.
By examining external factors—namely the market and competitors—alongside internal factors, which pertain to the company itself, it becomes possible to clearly identify the company’s strengths and weaknesses.

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The final framework is SWOT analysis, which is used to assess the current state of a company or business. While PEST analysis focuses on a detailed examination of the external environment, SWOT analysis enables a comprehensive understanding of the business environment (both internal and external), as well as specific situations, to identify how to leverage strengths and address areas for improvement.
In addition, by documenting the strengths and weaknesses identified through 3C analysis, and mapping the external environment identified in PEST analysis as opportunities and threats, it becomes possible to compile more detailed insights and conduct a more concrete analysis.

It is necessary to compare the internal factors—“Strengths” and “Weaknesses”—with the external factors—“Opportunities” and “Threats,” as outlined below.

● Strength (Strength)
　The company’s advantages and key assets
● Weakness (Weakness)
　Areas where the company lacks capability
● Opportunity (Opportunity)
　External factors that present potential opportunities for the company
● Threat (Threat)
　External factors that may pose risks to the company

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In this article, we analyzed the business model of the increasingly popular flea market app Mercari using three frameworks: PEST analysis, 3C analysis, and SWOT analysis.
As a result, it becomes clear that Mercari has successfully differentiated itself from competitors by thoroughly pursuing usability and strengthening its unique services, thereby establishing a service brand that is resilient against price competition. Furthermore, by not only gathering information but also structuring the analysis in the proper sequence, companies can gain a more comprehensive, bird’s-eye view of their optimal market positioning and develop more effective strategies.