In the last decade, without any doubt Branding has emerged as a top management priority due to the growing realization that brands are one of the most valuable intangible assets that firms have.
First, let’s talk about what “Brand” means.
Brands serve several valuable functions. At their most basic level, brands serve as markers for the offerings of a firm. For customers, brands can simplify choice, promise a particular quality level, reduce risk, and/or engender trust. Brands are built on the product itself, the accompanying marketing activity, and the use (or non-use) by customers as well as others.
Brands thus reflect the complete experience that customers have with products. Brands also play an important role in determining the effectiveness of marketing efforts such as advertising and channel placement. Finally, brands are an asset in the financial sense. Thus, brands manifest their impact at three primary levels – customer-market, product-market, and financial-market. The value accrued by these various benefits is often called brand equity.
Table of Contents
- What Is Brand Equity?
- What is Branding?
- Four effective steps in brand development strategy
What Is Brand Equity?
How to create a Brand is in no way different from founding your business. It takes time. Gradually you can create Brand Equity. Brand equity is the differential effect when consumers react more favorably to a brand than to a generic or unbranded version of the same product. Whenever we think of buying a smartphone the very first name that strikes us is – the iPhone. Ask why? It’s because of the comfort and authenticity delivered by iPhone to its users.
Apple throughout their years of research and experience has created a state in our mind of ultimate luxury and comfortability in using their products. There may be a few more similar products of others in line with Apple iPhone and may be superior to that, but theidentity of the iPhone gives it the edge over others- no matter what the price tag is. This edge is Brand Equity.
Branding on the other hand is simply making a business known to the public in a unique and creative way which differentiates it from competitors and also increase the standard of the brand It typically includes a phrase, design, or idea that makes a product or service easily identifiable to the public. It’s no longer a hidden fact that companies that thrive do because they choose to create a brand that resonates with the people. And that’s why every reputable organization do one thing “Brand development”. It is imperative to understand that what defines the quality of an organization is how they pay attention to branding. In this article, I will give you a snippet of of essentials of brand development.
What is Branding?
Branding is the marketing practice of actively shaping your brand in the minds of the consumers through advertisements and other means.
Four effective steps in brand development strategy
There are four effective steps in brand development strategy to create a brand:
- Choose the brand name and logo
- Establish the brand in the minds of customers
- Brand Sponsorship
- Develop the brand
Choose the brand name and logo
While building a brand development strategy name plays a vital role. A good name and style can add positives to a product’s success. It is the most difficult task to start with. Simplicity is the first step. The name should be easy to pronounce, recognize and remember. Moreover, it should suggest something about the product’s benefits and qualities. This is very important.
Names like Google, Nike, Facebook, Apple, KFC, etc. are among the most established brands all over the world. An interesting fact about those names is that they are easily translatable in different languages around the world. Hence the meaning of a particular word should not be something that indicates bad, wrong, or negative. Again the name should be extendable to cover up multiple product lines. For example, Amazon.com started its business with bookselling and now has been extended to multiple product categories. Once chosen, the brand name should also be protected. This means in many instances brand names were eventually mixed up with the product category and people cannot differentiate the brand identity from the product category. For example, Xerox is a company that builds copier machines, but doing a photocopy is often termed as doing xerox.’Xerox’ is to be pronounced as a noun and not as a verb. Many people find it hard to distinguish between the product and the service which ultimately hampers the brand name of the Company. On the other hand, a company whose service is printing named “Printivo” reveals the value of the company even before being told. Many brands whose pursuit is to become global structures plan to define their brand name.
Establishing the brand in the minds of customers
Many brands or organization take this with levity. An interesting saying by a marketer- Products are created in the factory, but brands are created in the mind. This can be done in multiple ways- At the basic level, it starts with introducing the target customers to the product and its distinguishing characteristics. Let’s take the example of Amazon’s Kindle- e-book reader. Amazon targets its customers, saying that it’s an e-book reader having a distinguished feature of reading books in a virtual format.
In this stage, they are simply introduced to the product and have a very low level of impact. The more effective way a brand can be positioned is by associating its name with desirable benefits. Thus, Kindle is beyond an e-book reader- it is a lightweight, and go dictionary, stores thousands of books that are easy to search, has no glare, and has zero distractions. The strongest brands go beyond establishing features and benefits in customers’ minds and position themselves on strong values and beliefs, rooted in a deep emotional bonding. Like reading books on Kindle is an absolute pleasure and presents itself as booklover’s new best friend. When placing a brand in the human mind, the marketer should establish a mission for the brand and a vision of what the brand must be and do.
Brand sponsorship can be of three types.
- Private Brand sponsorship
- Licensed Brand sponsorship
Private Brand sponsorship
Lots of advertisements and social marketing strategies work behind the big brands to emerge and are termed National brands. But for smaller companies, it may not always be possible to endorse brands with huge out-of-pocket expenses. In those scenarios, brand sponsorship is very important. As against National or Manufacture’s brands, there are Store brands. In recent decades store brands are gaining more from the market. Here’s why? Big shopping malls like Big Bazaar, Walmart resale products at significant discount rates especially the generic or no-name brands. They endorse the products citing their advantages or putting side-by-side comparisons with the top brands. The association of the big resellers with less known products works as an aid in uplifting the brand value of the product once termed as ‘no-name’. Private brand sponsorship is also followed in online shopping too. As we can see small or lesser-known mobile manufacturers are recently tying up with Amazon to sell their phones. In fact, this strategy is working great as the ‘no-name’ brands are getting the support of the big brand stores be it online or offline.
Licensed Brand sponsorship
In this brand sponsorship, some companies buy the names and symbols of other manufacturers or creators with a fee and endorse their products under such brand name. This is a common thing in the fashion industry like Calvin Klein, Tommy Hilfiger, Gucci, Armani, etc., where the Companies are using the names and initials of well-known fashion innovators. This type of branding turns out as an added fillip but with a pinch in the pocket.
Under such a brand sponsorship strategy, established brand names of different companies are used on the same product. Because each brand dominates in a different category, the combined brands create broader consumer appeal and greater brand equity. For example, Bajaj Allianz Life Insurance where Bajaj is a dominant player in the automobile sector and Allianz is a German financial service major. Now since Bajaj wants an entry in the insurance sector and Allianz wants an entry into the Indian market, they jointly made a brand ‘Bajaj-Allianz’ to reap the fruits of the Indian insurance market. Co-branding carries some limitations too. Such relationships usually involve complex legal contracts and licenses. Co-branding partners must carefully coordinate their advertising, sales promotion, and other marketing efforts. The onus lies on both the partners to carry the co-brand with trust and dignity.
To augment the brand equity it is very important to prepare a brand development strategy incommensurate with changing business scenarios. There is no hard and fast rule to dictate over.
Brands name of a product can be extended to an existing line of products to accredit new forms, colors, sizes, ingredients or flavors of an existing product. However, line extensions involve some risks. An overextended brand name might cause consumer confusion or loss of some of its specific meaning.
It happens when a current brand name is extended to a new or modified product in a new category. For example, Nestlé’s popular brand of noodles Maagi has been extended to its tomato ketchup, pasta, soup, etc. A brand extension gives a new product instant recognition and faster acceptance. But one should be careful while extending the brand as it may confuse the image of the main brand.
Multi-branding offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space and capture a larger market share. For example, a reputed company sells multiple varieties of soft drinks under different brand names. These brands are fighting each other to reign the market and as a result, they individually may have a smaller share of a pie, but as a whole, the Company is dominating the soft drink market. The major drawback here is the individual brands obtain only a small market share and may not be very profitable.
Brands are not created in a day or two; you ought to have the patience to grow them. The above-mentioned points suggest some best practices to build a brand, but the real test begins in the field. Brand development strategy differs from place to place, even urban branding and rural branding are way different in their practical applications. Remember that behind a successful brand development strategy, there lie lots of endeavors, a vividly clear vision, and above all an uncompromised quality of product or service.