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Brand v. Product?
A product is something that is made in a factory whilst a brand is something that is bought by a consumer. A product can be copied by a competitor whilst a brand is unique. A product can be quickly outdated whilst a successful brand, properly managed can be timeless. Stephen King
Brand Differentiation
Brands put up two major barriers to competition through differentiation: Brands create a legal barrier protecting a bundle of rights covering names, colours, logotypes and even smells and sounds.
Brands create a psychological barrier to competition relating to a package of functional and emotional attributes.
Brand Attributes
Brands create a pact between company and customers through the creation of an emotional tie linked to the brand attributes:
Functional attributes: Ensuring recognition Simplifying selection Guaranteeing origin Confirming quality
Why Brand?
Successful brands have the capability of securing higher prices or volume Brands help to stabilise long-term demand in the market Established brands provide a more effective means of stretching into new product or geographical markets Brands therefore add real bottom line financial benefit
Differentiation
Market advantage is gained through differentiation. This differentiation means moving from the tangible to the intangible, which is the emotional pact that secures consumers. Examples? The chemical Aspartame was re-branded Nutrasweet The man made fibres Elastomeric became Lycra Hutchison mobile phones became Orange Silicon chips became Intel Inside.
Types of Branding
There are many factors to take into consideration in order to understand which type of branding is suitable to a particular company and sector, most importantly: Market research is essential Understanding the consumer is vital Define the audience Establishing how to reach them
Endorsement branding
Endorsement branding works well to add credence to a product or company. It can be a considered as a partnership or a branded network. A good endorsement can help meet targets, increase cost-effectiveness, improve overall brand identity and increase awareness Endorsement branding can provide advantages over rivals, and can give consumers the emotional security attached to firms which are respected and well-known
Personality Branding
Individual partner, character, founder, or an historic figure can represent the ethos the brand pervades. Characters or individuals within a company are promoted as experts in their field, or media personalities, and become established gurus. Individuals can be built up through the media, and lend credibility and interest to the company, eg: Virgins Richard Branson and the Virgin brand Luxury goods sector Calvin Klein, Tommy Hillfiger Computer games characters Lara Croft, Super Mario and Sonic the Hedgehog
Sub Branding
To effectively work amongst different audiences companies need to use different brands to represent different qualities Globalisation and competition forces many companies to expand both geographically and by product/ service therefore creating sub-brands Acquiring companies and keeping them as subbrands is also increasing in business practice Careful positioning of the sub-brands is required as to maintain the equity of the mother brand. The desire to sub-brand partly stems from the success of niche brands.
How to
Company brochures, newsletters, forums and meetings, annual conferences and, increasingly popular, TV and radio stations are used to promote internal branding Consistency of media, regularity and measurement of success of the internal marketing are all needed to ensure that it is successful. Treat the internal communications as external communications Ultimately success is measured by the fundamental acceptance of brand values by employees.
How to
External communications terms there is a vast array of elements involved in successful brand building In professional services and B2B markets, use client events and presentations, marketing materials and brochures, PR and promotional research. In the mass consumer markets, media advertising, sales promotion, direct marketing, packaging and design, point of sale, publicity and PR, event marketing and direct response advertising can all be key.
Virgin Holidays 6%
Cost of branding
Good branding is an investment in a key corporate asset. It can be a costly exercise, but only when the returns are not recognised. It is not easy to estimate what good marketing costs, and it can vary greatly according to the target audience, the size of the company and the personnel conducting the marketing PR and marketing department must be accountable for these expenses.
Benefits of branding
DEMAND trade/ consumer recognition and loyalty lower sales conversion costs lower average trade discounts/ commissions lower staff acquisition/ retention costs more favorable supplier terms lower cost of capital production economies of scale UPPLY growing the total market new-user acquisition switching-user conversion existing customer retention cross-sell new products like-for-like price premium
Conclusion
Brands add intangible value to products and businesses and redefine the value of their company owners. A new recognition of the financial value of brand assets is now emerging in company Boardrooms and in the City. Sir George Bull, Chairman of Sainsburys It is now time for companies to fully recognise the value of brands and create brands that provide long-term advantage.