The value of strong brands and branding is clear to everyone familiar with names such as Coca-Cola, Apple, IBM, BMW, Ericsson, Armani, Louis Vuitton, and Disney.
In competitive industries, branding plays a central role in competitive strategy.
The companies that own these names have built successful brand names over many years. Their brands now work as powerful assets for market pricing and selling. Why do they spend so much and work so hard to build strong brands? And, why do they pay so much attention to protecting their brands from misuse, damage, or slander?
The answer, of course, is that strong branding pays off at the bank. The financial payoff stems from customer qualities that every company founder, officer, and marketer aims for: strong brand equity and strong brand loyalty.
Sellers with real brand equity can charge premium prices for products that their competitors must sell for less. Apple, for instance, now sells a charging cable and plug package for US$39. Other sellers with weaker brands sell essentially the same items for about $10.
That is brand equity at work. Brand equity, of course, means higher margins. Ka-ching!
Marketers generally see Brand loyalty as the greatest payoff for strong branding. Brand loyalty is the propensity of customers to buy the brand again and again. Brand loyal customers buy their brand over and over, even when other brands are more accessible or less expensive.
Loyal customers hold to their own brand, even in the face of advertising or marketing pressure from competitors to do otherwise. It is easy—apparently—to create brand loyalty for some kinds of products and services: Cigarettes, baby food, and “fast food” brands seem to have this characteristic.
With other products and services, however, customers always seem ready to change providers the moment a cheaper offering turns up elsewhere. Mobile phone service providers and automobile service station owners know this problem very well.
In any case, businesspeople of all kinds know that strong brand loyalty means greater customer demand, higher competitive win rates, and lower cost of selling. Ka-ching! Ka-ching!
Brands and Branding: Take Action!
For those who wish to understand brands and branding in more depth, visit the article:
The article is a complete introduction to the subject for those working in all areas of business—especially those who must find answers to questions like these:
- What are the steps in building and establishing our brand?
- How do we strengthen our brand?
- And, how do we know if we’re winning or losing the branding challenge?
Businesspeople know that the field of branding is awash with similar-sounding terms that confuse even professional marketers: Brand awareness, brand franchise, brand recognition, brand recall, brand loyalty, brand equity, and brand love—to name a few.
The article Brand, Branding, and Brand Awareness will help you cut through the confusion and emerge with a clear grasp of important branding concepts.
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By Marty Schmidt. Copyright © 2004-2019.
Published by Solution Matrix Limited.