These associations represent at least two things: your business name and the perception of what that name means to your customer or client. It grows out of every experience that people have when they interact with your product or service.
The brand experience of your company can be actively promoted, for example through marketing or event promotion or it may be beyond your control, for example bad press or dissatisfaction put up on social media sites and shared with a large group of people. During the Industrial Revolution, the production of many household items, such as soap, was moved from local communities to centralized factories to be mass-produced and sold to the wider markets.
When shipping their items, factories branded their logo or insignia on the barrels they used. These new brand marks enabled packaged-goods manufacturers to communicate that their products were distinctive and should be trusted as much as or more than local competitors.
A successful brand is much more than just a name or logo. As suggested in one of the definitions above, brand is the sum of perceptions about a company or product in the minds of consumers. Effective brand building can create and sustain a strong, positive, and lasting impression that is difficult to displace.
Brands provide external cues to taste, design, performance, quality, value, or other desired attributes if they are developed and managed properly. Brands convey positive or negative messages about a company, product, or service. Brand perceptions are a direct result of past advertising, promotion, product reputation, and customer experience. Effective branding encompasses everything that shapes the perception of a company or product in the minds of customers.
Names, logos, brand marks, trade characters, and trademarks are commonly associated with brand, but these are just part of the picture. Branding requires a deep knowledge of customers and how they experience the company or product.
In consumer and business-to-business markets, branding can influence whether consumers will buy the product and how much they are willing to pay. These issues are contemplated by most business people at some point in the growth of their ventures so being clear about what your brand represents will make acquiring your market share a much easier experience.
The evolution of humanity has been consistent in at least one aspect: our need for social interaction. The ability of a business to understand and create or meet the needs of its potential and existing customers is the secret of its success.
Dr Abraham Maslow hypothesized that people are motivated by a hierarchy of needs. His thinking was that individual needs must be satisfied at the lower levels before they progress to higher, more complex levels. The basic physiological need for food and shelter, for instance, had to be met before higher levels of esteem such as respect for others and self-confidence could be reached.
The psychology of your client base is effectively understood within its direct social context. Once this is accomplished, spinning off a cheaper version of a brand is a great way to achieve higher levels of growth. Tesla is a great example of this. Tesla began by selling extremely high end vehicles, with the plan to utilize the return on those sales to begin producing higher quantities of lower cost models, all of which maintain the powerful Tesla brand.
A broad term, which can be applied to a variety of tactics, differentiation is all about identifying a unique need that users are willing to pay a premium for. Consider the beer and wine industry.
Microbreweries have seen enormous growth and, in turn, acquisition by big companies in recent years. Microbreweries focus on creating a unique, specialized beer which often costs more. Due to the unique experience, local support and potential variety, customers are willing to pay a premium for a differentiated product compared to the bigger brand names. Another interesting example is co-branding. Sometimes co-branding can help an organization spread into new markets.
For example, some cars come with built in surround sound systems. These cars are often partnered with strong brands, such as Bose, which provides mutual benefit and enables Bose to enter a new market. In this situation, the Bose brand is noted by car purchasers just as the car brands are considered in the context of good sound systems. While extending product lines and spinning off the brand into new product formats can be a great opportunity for revenue growth, it also exposes the brand to new market forces and new risks.
Careful quality control and brand maintenance is a key consideration in any new extensions to the brand. With proper execution, a brand can be a powerful asset for new product development.
A branding strategy helps establish a product within the market and to build a brand that will grow and mature in a saturated marketplace. Making smart branding decisions up front is crucial since a company may have to live with the decision for a long time. The following are commonly used branding strategies:.
Each brand has a separate name, putting it into a de facto competition against other brands from the same company for example, Kool-Aid and Tang are both owned by Kraft Foods. This is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption of the product at all. It was simply recognized by the color of the cap of this cleaning products company. Some suppliers of key components may wish to guarantee its own position by promoting that component as a brand in its own right.
The existing strong brand name can be used as a vehicle for new or modified products. For example, many fashion and designer companies extended brands into fragrances, shoes and accessories, furniture, and hotels. Frequently, the product is no different than what is already on the market, except it has a brand name marking.
The risk of over-extension is brand dilution, which is when the brand loses its brand associations with a market segment, product area, or quality, price, or cachet. Alternatively, in a very saturated market, a supplier can deliberately launch totally new brands in apparent competition with its own existing strong brand and often with identical product characteristics to soak up some of the share of the market.
The rationale is that having 3 out of 12 brands in such a market will give a greater overall share than having 1 out of In the hotel business, Marriott uses the name Fairfield Inns for its budget chain. Cannibalization is a particular problem of a multi-brands strategy approach, in which the new brand takes business away from an established one which the organization also owns.
This may be acceptable indeed to be expected if there is a net gain overall. Also called own brands, or store brands, these have become increasingly popular. These are types of branding that treat individuals and organizations as the products to be branded. Personal branding treats persons and their careers as brands. Faith branding treats religious figures and organizations as brands.
These are brands that are created by the people for the business, which is opposite to the traditional method where the business creates a brand. This type of method minimizes the risk of brand failure, since the people that might reject the brand in the traditional method are the ones who are participating in the branding process.
This is a field of theory and practice which aims to measure, build, and manage the reputation of countries closely related to place branding. Privacy Policy. Skip to main content. Branding and Packaging. Search for:. Learning Objectives Discuss the characteristics and connotations around branding products and services. Brands provide external cues to taste, design, performance, quality, value, and prestige if they are developed and managed properly.
Brands convey positive or negative messages about a product. They also indicated the company or service to the consumer, which is a direct result of past advertising, promotion, and product reputation. Key Terms watermark : A translucent design impressed on the surface of paper and visible when the paper is held to the light. Trademark : A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify for consumers that the products or services on or with which the trademark appears originate from a unique source, designated for a specific market.
It also distinguishes its products or services from those of other entities. Value of Branding Branding is a long term exercise, but one that reaps long-term profitability through increased customer loyalty. Learning Objectives Explain why a strong branding strategy is essential to the success of a company. Key Takeaways Key Points Branding is crucial to the success of any tangible product.
Branding helps the manufacturer create loyalty, decrease the risk of losing market share to the competition by establishing a differential advantage, and allow premium pricing that is acceptable by the consumer because of the perceived value of the brand.
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