Concept of Brand

Introduction

The word “brand”, when used as a noun, can refer to a company name, a product name, or a unique identifier such as a logo or trademark.

The concept of branding also developed through the practices of craftsmen who wanted to place a mark or identifier on their work without detracting from the beauty of the piece. These craftsmen used their initials, a symbol, or another unique mark to identify their work and they usually put these marks in a low visibility place on the product.

The Meaning of Brands

Brands are a means of differentiating a company’s products and services from those of its competitors.

There is plenty of evidence to prove that customers will pay a substantial price premium for a good brand and remain loyal to that brand. It is important, therefore, to understand what brands are and why they are important.

One complete definition of a brand is as follows:

“A name, term, sign, symbol or design, or a combination of these, that is intended to identify the goods and services of one business or group of businesses and to differentiate them from those of competitors”.

Example

MacDonald sums this up nicely in the following quote emphasizing the importance of brands:

“…it is not factories that make profits, but relationships with customers, and it is company and brand names which secure those relationships”

Businesses that invest in and sustain leading brands prosper whereas those that fail are left to fight for the lower profits available in commodity markets.

What is Branding?

Branding is the business process of managing your trademark portfolio so as to maximize the value of the experiences associated with it, to the benefit of your key stakeholders, especially current and prospective:

•       employees

•      customers

•      stock/share holders

•      suppliers

•      intermediaries

•      opinion leaders

•      local communities

•      purchasers and licensees

Experts argue as to which stakeholders should be the main focus of the branding process, but this is probably the wrong question as their experiences are all inter-related:

•      Employees - the more your employees value your brands and understand what to do to build them, the more your customers, suppliers, local communities and opinion leaders will value them. The more attractive your brands are to potential employees, the more they are likely to want to work for you

•      Customers - the more your customers value your brand, the more they will buy your products and services, and recommend them to other people. They will also pay a premium for them and make the lives of your employees easier. This, in turn, will enhance the value of your brands to prospective purchasers and licensees. Research has shown that strong brands are more resistant to crises of reputation

•      Stock/share holders - strong brands multiply the asset value of your company (90% of the asset value of some major corporations lies in their intellectual property), and assure them that your company has a profitable future.

They also allow you to afford to give competitive dividends to your current stock/share holders

•      Suppliers - suppliers like to be associated with strong brands as this benefits their own reputation in the eyes of other current or potential customers. You are therefore likely to get better service at a lower total acquisition cost

•      Intermediaries - retailers, distributors and wholesalers value strong brands as they improve their own profit margins. They are likely to give you more “air time” and shelf space, thus enhancing further the value of your brands in the eyes of your current and prospective customers

•      Opinion leaders - the media, politicians and non-government organisations are more respectful of strong brands

•      Local communities - supportive local authorities can make your life easier in many ways, and offer you better deals, if you have prestigious brands. Your local communities provide you with your work force and can be highly disruptive if they perceive you as damaging their environment

•      Purchasers and licensees - the question prospective purchasers and licensees ask is “how much more profit can I get for my products and services sold under this brand than under any brand I might build?” Strong brands can be spectacularly valuable.

Characteristics of Brands

Our definition of a brand adheres to a model which shows the extent to which a product or service can be augmented to provide added value to increasing levels of sophistication. This model, views a brand as consisting of four levels

•      generic

•      expected

•      augmented

•      potential

The generic level is the commodity form that meets the buyer, or user’s basic needs, for example the car satisfying a transportation need. This is the easiest aspect for competitors to copy and consequently successful brands have added values over and above this at the expected level.

Within the expected level, the commodity is value engineered to satisfy a specific target’s minimum purchase conditions, such as functional capabilities, availability, pricing, etc. As more buyers enter the market and as repeat buying occurs, the brand would evolve through a better matching of resources to meet customers’ needs (e.g; enhanced’ customer service).

With increased experience, buyers and users become more sophisticated, so the brand would need to be augmented in more refined ways, with added values satisfying non-functional (e.g. emotional) as well as functional needs. For example, promotions might be directed to the user’s peer group to reinforce his or her social standing through ownership of the brand.

With even more experience of the brand, and therefore with a greater tendency to be more critical, it is only creativity that limits the extent to which the brand can mature to the potential level.

Brand Evolution

This is evolved from the company’s core vision and values, building on what is important to the organisation, then translated into impactful, purposeful design.

Brand Evolution is a collaboration of strategists, and people specialists who come together to work with organisations to help them identify what makes them unique, their positioning in the market place and competitive advantage.

Branding challenges and opportunities

Brands build their strength by providing customers consistently superior product and service experiences. A strong brand is a promise or bond with customers. In return for their loyalty, customers expect the firm to satisfy their needs better than any other competitors.

Brands will always be important given their fundamental purpose – to identify and differentiate products and services. Good brand makes people’s lives a little easier and better. People are loyal to brands that satisfy their expectations and deliver on its brand promise. The predictably good performance of a strong brand is something that consumer will always value.

The challenges to brands

1) The shift from strategy to tactics: – With the increasing pressure to generate ever-improving profitability, it is often considered a luxury for managers to develop long-term strategic plans. This is further exacerbated by short-term goal setting, which is frequently designed primarily for the convenience of the financial community.

2) The shift from advertising to promotions: – As a consequence of the increasing pressure on brand manager to achieve short-term goals, there is a temptation to cut back on advertising support, since it is viewed as a long-term brand-building investment, in favour of promotions which generate much quicker short-term results.

3) On-Line shopping: – The Internet is facilitating on-line shopping. On-line shopping is different from traditional mail order because:

• Brands are available all the time and from all over the world;

• Information and interactions are in real time;

• Consumers can choose between brands which meet their criteria, as a result of selecting information which is in a much more convenient format for them, rather than the standard catalogue format.

This poses threats to brands, some components of added value, agent or the retail outlet which originally added value by matching consumers with suppliers, may be eliminated.

4) Opportunities from technology: – Brand marketers are now able to take advantage of technology to again a competitive advantage through time. Technology is already reducing the lead time needed to respond rapidly to changing customers need and minimizing any delays in the supply chain.

5) More sophisticated buyers: – In business-to-business marketing, there is already an emphasis on bringing together individuals from different departments to evaluate suppliers’ new brands. As inter departmental barriers break down even more, sellers are going to face increasingly sophisticated buyers who are served by better information system enabling them to pay off brand suppliers against each other.

6) The growth of corporate branding:- With media inhabiting individual brand advertising, many firms are putting more emphasis on corporate branding, unifying their portfolio of brands through clearer linkages with the corporation, which clarifies the those all the line brands adhere to. Through corporate identity program functional aspects of individual brands in the firm’s portfolio can be augmented, enabling the consumer to select brands through assessment of the values of competing firms. Firms developed powerful corporate identity programmes by recognizing the need first to identify their internal corporate values, from which flow employee attitudes and specific types of staff behavior secondly, to devise integrated communication programmes for different external audiences.

Brand Strategies

Branding is crucial for products and services sold in huge consumer markets. It’s also important in B2B because it helps you stand out from your competition. Your brand strategy brings your competitive positioning to life, and works to position you as a certain “something” in the mind of your prospects and customers.

Think about successful consumer brands like Disney, Tiffany or Starbucks. You probably know what each brand represents. Now imagine that you’re competing against one of these companies. If you want to capture significant market share, start with a strong brand strategy or you may not get far.

Successful branding also creates “brand equity” – the amount of money that customers are willing to pay just because it’s your brand. In addition to generating revenue, brand equity makes your company itself more valuable over the long term.

Best Case	Neutral Case	Worst Case
Prospects and customers know exactly what you deliver. It’s easy to begin dialogue with new prospects because they quickly understand what you stand for. You acquire customers quickly because your prospects’ experience with you supports everything you say. You can charge a premium because your market knows why you’re better and is willing to pay for it.	The market may not have a consistent view or impression of your product and company, but in general, you think it’s positive. You haven’t thought a lot about branding because it doesn’t necessarily seem relevant, but you admit that you can do a better job of communicating consistently with the market. You’re not helping yourself but you’re not hurting yourself either.	You don’t have a brand strategy and it shows. It’s more difficult to communicate with prospects and convince them to buy. They don’t have an impression of your product/service or why it’s better. What you do, what you say and how you say it may contradict each other and confuse your prospects. Competitors typically have an easier time acquiring customers.

Develop your brand around emotional benefits

·         List the features and benefits of your product / service. A feature is an attribute – a color, a configuration; a benefit is what that feature does for the customer.

·         Determine which benefits are most important to each of your customer segments.

·         Identify which benefits are emotional – the most powerful brand strategies tap into emotions, even among business buyers.

·         Look at the emotional benefits and boil them down to one thing that your customers should think of when they think of you. That’s what your brand should represent.

Define your brand personality, story and positioning statements

·         Think of your brand as a person with a distinct personality. Describe him or her, then convey these brand personality traits in everything you do and create.

·         Write positioning statements and a story about your brand; use this brand messaging throughout your company materials.

·         Choose colors, fonts and other visual elements that match your personality and create your corporate identity.

·         Determine how your employees will interact with prospects and customers to convey the personality and make sure your brand “lives” within your company.

After Brand Strategy

Together with your competitive positioning strategy, your brand strategy is the essence of what you represent. A great brand strategy helps you communicate more effectively with your market, so follow it in every interaction you have with your prospects and customers.

If you’re wondering how to choose a great brand name, complete your written brand strategy before you start the naming process. Since your name is an extension of your brand, it’ll be much easier to evaluate the quality of your name choices (instead of starting with the name) with it completed.