Brands and Branding: Enhance the Image, Charge Premium Prices

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.

The firms that carry 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.

Brand Equity

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!

Brand Loyalty

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! Ka-ching!

Brands and Branding: Take Action!

For those who wish to understand brands and branding in depth, visit the article:

Brands, Branding, and Brand Awareness

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:

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.

Brand, Branding, and Brand Awareness will help you cut through the confusion and emerge with a clear grasp of important branding concepts.

Learn and practice the premier approach to case building at a  Solution Matrix  Business Case Seminar. Learn more about case building and case design from the Business Case Guide, or the best-selling business case authority in print, Business Case Essentials.

By Marty Schmidt. Copyright © 2004-2018.
Published by Solution Matrix Limited.
Find us on  Linkedin   Google+   Facebook