Everything you need to know about branding. Branding is not a new concept. It has been around for centuries as a means to distinguish the goods of one producer from those of another.
Although primarily used for the purpose of distinguishing, branding today has evolved as a tool that helps the marketer in more ways than one.
Brands today play a number of vital roles that improve the consumer’s lives and help organisations fulfil their objectives.
The whole meaning of the brand includes business name, logo, colour scheme and design style that expresses the product and service, in symbols along with words and images the target audience understands.
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Branding has become a vital part of modern marketing. Kotler has pointed out that the growth of brand names has been so dramatic that today in the USA hardly anything is sold unbranded.
Brand identification is essential for the firm wanting to differentiate its product, giving the company some degree of control over the product’s resale by middlemen and at the same time enhancing promotional effectiveness. Through brand identification a company prepares itself to compete on a non-price basis.
Learn about:-
1. Meaning and Definitions of Branding 2. Concept of Branding 3. Purpose 4. Elements 5. Types 6. Components 7. Importance
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8. Levels 9. Approaches 10. Branding Decisions 11. Branding and Marketing Programme 12. Branding and Consumers 13. Benefits 14. Limitations.
What is Branding: Meaning, Definitions, Concept, Purpose, Elements, Types, Components, Importance, Levels and Other Details
Contents:
- Meaning and Definitions of Branding
- Concept of Branding
- Purpose of Branding
- Elements of Branding
- Types of Branding
- Components of Branding
- Importance of Branding
- Levels of Branding
- Approaches to Branding
- Branding Decisions
- Importance of Branding in the Marketing Programme
- Branding and Consumers
- Benefits of Branding
- Limitations of Branding
What is Branding – Meaning and Definitions Provided by Philip Kotler and American Marketing Association
Brand means a name, term, sign, symbol, design, or a mix thereof used to identify the product of one firm and to distinguish if from the competitive products. A brand is usually composed of a name and a mark or a mnemonic. A brand name is a part of a brand which can be vocalized. It consists of words, letters, and / or numbers.
A brand mark or mnemonic on the other hand is that part of a brand which cannot be vocalized but can be recognized only. It usually, consists of symbols, designs and conspicuous colorings or letterings. It is designed to aid easy and immediate identification of a product.
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The famous Indian brand marks include Air India’s ‘Maharaja’ Life Insurance Corporation’s Yogakshema’, State Bank of India’s blue circle with a central dot, Anacin’s four fingers and the palm, In and Murphy Radio’s Murphy baby, to mention a few.
When a brand receives legal protection and the right to its exclusive use by its owner, it is referred as a trade mark. Usually the R letter is suffixed to the brand name so as to denote its registration and legal status. In India, a brand receives, such legal protection under the Trade and Merchandise Marks Act, 1958 after it fulfills the following conditions as laid down under sections 11 and 12 of this act.
1. It is not likely to deceive or cause, confusion.
2. It is not contrary to any law for the time being in force.
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3. It does not comprise or contain scandalous or obscene matter.
4. It does not hurt the religious sentiments or feelings of any class or section of the citizens.
5. It is otherwise not entitle to protection in court.
6. It is not similar to any existing trade mark.
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A Brand is a name, term, sign, symbol or design or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of the competitors. – Philip Kotler
The American Marketing Association (AMA) defines a brand as a “name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers”.
A brand is essentially a seller’s promise to consistently deliver a specific set of features, benefits and services to the buyers. Best brands convey a warranty of quality.
What is Branding – 12 Important Concepts: Brand Loyalty, Brand Experience, Brand Architecture, Brand Equity, Brand Awareness, Brand Extension and a Few Others
Concept # 1. Brand Loyalty:
Brand loyalty has been proclaimed by some to be the ultimate goal of marketing. In marketing, brand loyalty consists of a consumer’s commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. True brand loyalty implies that the consumer is willing, at least on occasion, to put aside their own desires in the interest of the brand.
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Brand loyalty is more than simple repurchasing; however, customers may repurchase a brand due to situational constraints, a lack of viable alternatives, or out of convenience. Such loyalty is referred to as – “spurious loyalty”. True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior.
This type of loyalty can be a great asset to the firm – customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Joe has brand loyalty to Company A he will purchase Company A’s products even if Company B’s are cheaper and/or of a higher quality.
An example of a major brand loyalty program that extended for several years and spread worldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand loyalty is the fervent devotion of many Mac users to the Apple Company and its products.
From the point of view of many marketers, loyalty to the brand – in terms of consumer usage – is a key factor.
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A third dimension, however, is whether the customer is committed to the brand. Philip Kotler, again, defines four patterns of behaviour:
i. Hard Core Loyals – who buy the brand all the time?
ii. Soft Core Loyals – loyal to two or three brands.
iii. Shifting Loyals – moving from one brand to another.
iv. Switchers – with no loyalty (possibly ‘deal-prone’, constantly looking for bargains or ‘vanity prone’, looking for something different).
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The Loyalty Ladder – Turning a Prospect into an Advocate:
The loyalty ladder is a tool for marketing communicators. The idea is that consumers can be moved along a continuum of loyalty using a number of integrated marketing communications techniques (it is also referred to as a branding ladder). Essentially, consumers become loyal to a brand which has meaning to them in relation to a product, service, solution or experience.
As with continuums of behaviour such as UACCA – Unawareness, Awareness, Comprehension, Conviction, Action, or AIDA – Awareness, Interest, Desire, Action, the loyalty ladder begins from a point where the consumer has Not Yet Purchased, then he or she buys the product for the first time (Trialist), if the trial has been a success he or she returns to buy again and again (Repeat Purchaser) and finally the consumer buys no other brand (Brand Insistent).
At the Not Yet Purchased Stage the consumer is merely a Prospect. As he or she trials they become a Customer. The Repeat Purchaser is a Client since he or she is becoming loyal. Finally, the consumer becomes an Advocate (i.e., activist or campaigner) since he or she is Brand Insistent. At this point the brand is difficult to dislodge since it has so much meaning to the consumer. Great brands such as – Nike, BMW, Boss, and iPod are in this highly desirable position.
The marketing manager needs to decide or select integrated marketing communications that move the consumer from Not Yet purchased to Brand Insistent (i.e., from Prospect to Advocate). Once at Brand Insistent, the marketing manager should attempt to keep the level of customer loyalty at this point, again by using integrated marketing communications.
Concept # 2. Brand Experience:
Customer experience management involves five steps.
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They are:
Step 1 – Analysing the experiential world of the customer
Step 2 – Building the experiential platform
Step 3 – Designing the brand experience
Step 4 – Structuring the customer interface
Step 5 – Engaging in continuous experiential innovation
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The third step, designing the brand experience involves deciding what the brand experience should be like. Brand experience consists of all the static elements that the customer encounters (e.g. the product itself, logos, signets). There is the need to protect the brand experience legally, to keep competitors from copying it.
Concept # 3. Brand Architecture:
Brand architecture is the structure of brands within an organizational entity. It is the way in which the brands within a company’s portfolio are related to, and differentiated from, one another. The architecture should define the different leagues of branding within the organisation; how the corporate brand and sub-brands relate to and support each other; and how the sub-brands reflect or reinforce the core purpose of the corporate brand to which they belong.
There are three generic relationships between a master brand and sub-brands:
1. Monolithic brand or Branded house – Examples include Virgin Group, Red Cross or Oxford University. These brands use a single name across all their activities and this name is how they are known to all their stakeholders – consumers, employees, shareholders, partners, suppliers and other parties.
2. Endorsed brands – Like Nestle’s KitKat, Sony PlayStation or Polo by Ralph Lauren. The endorsement of a parent brand should add credibility to the endorsed brand in the eyes of consumers. This strategy also allows companies who operate in many categories to differentiate their different product groups’ positioning.
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3. Product brand or House of brands – Like Procter & Gamble’s Pampers or Henkel’s Persil. The individual sub-brands are offered to consumers, and the parent brand gets little or no prominence. Other stakeholders, like shareholders or partners, know the company by its parent brand.
Concept # 4. Brand Equity:
Brand equity is the value built-up in a brand. It is measured based on how much a customer is aware of the brand. The value of a company’s brand equity can be calculated by comparing the expected future revenue from the branded product with the expected future revenue from an equivalent non-branded product.
This calculation is at best an approximation. This value can comprise both tangible, functional attributes (e.g., TWICE the cleaning power or HALF the fat) and intangible, emotional attributes (e.g., the brand for people with style and good taste).
In other words, Brand equity measures the total value of the brand to the brand owner, and reflects the extent of brand franchise. The term brand name is often used interchangeably with “brand”, although it is more correctly used to specifically denote written or spoken linguistic elements of a brand.
In this context a “brand name” constitutes a type of trademark, if the brand name exclusively identifies the brand owner as the commercial source of products or services. A brand owner may seek to protect proprietary rights in relation to a brand name through trademark registration.
According to Biel, 1992, “Brand Equity can be thought of as the additional cash flow achieved by associating a brand with the underlying product or service.” “Brand equity is a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers”.
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In the words of Keller, “Brand equity is defined in terms of marketing effects uniquely attributable to the brands -for example, when certain outcomes result from the marketing of a product or service because of its brand name that would not occur if the same product or service did not have the name”.
The marketing literature is laden with works, which explore, interpret, and expose the concept of brand equity. The advantages of brand equity directs the academic and the managerial attention to its measurement and management. There appears to be broad consensus on the value of brand equity but it comes with a slight area of darkness around it. At the most fundamental level differing views guide our understanding as to what it is.
The best way to achieve this is by conceptualising the brand equity in terms of the input throughout output model. The product and its attributes both tangible and intangible – are the inputs to the equity model. It is the brand, which is the basis of equity or value. In the absence of a brand, achieving equity is impossible. It is the fundamental core/block.
The value that a brand generates is not itself generated. A brand generates more value as a result of discriminating responses that customers exhibit in favour of a brand or the willingness to pay more for a brand. All these are outcomes. It is monetisation of these that is called financial worth or value that is added by the brand.
But the most crucial link between the input and output is the consumer—the consumer’s mental framework to be more precise. It is the consumers’ knowledge structure or image or perceptions that a customer has about the brand that drive the outcomes. Operationally, it is the brand and its constellation of knowledge structure in a customer’s mind that a brand manager needs to manage to achieve desired equity.
a. Value to Customers:
Brand Equity assets can enhance or decrease value for customers.
A brand’s equity is valuable to customers because:
Firstly, it helps customers in information processing. A brand is useful in aiding customers in interpreting, processing and storing information about the products and the brands. It simplifies this process.
Secondly, a brand’s assets enhance customer confidence in the purchase decision. One feels more confident in purchasing a brand. It happens because of familiarity with a brand. Familiarity creates confidence.
The final value to customer comes in the form of usage satisfaction. The brand associations and quality move the product beyond its thingness boundary enveloping it with images that customers value and identify with.
b. Value to Marketers:
Brand equity also plays a critical role in enhancing value for the marketer.
A firm benefits from the equity in the following ways:
Firstly, the Brand equity assets increase the effectiveness and efficiency of marketing programmes. The expenditure associated with a brand to achieve a goal generally tends to be less than an unbranded product aiming to achieve the same goal.
Secondly, Brand equity dimensions allow a firm to have greater customer loyalty. The customers can exhibit preference and commitment to a brand only. Thirdly, Brand equity allows a firm to change premium. That is, a customer may willingly support a brand in spite of greater sacrifice that needs to be made.
Finally, Brand equity provides great opportunities for growth. Most of the firms now are relying on brand extensions – to achieve growth rather than launching new brands.
Positivity:
It can be positive or negative. Positive brand equity is created by effective promotion and consistently meeting or exceeding customer thoughts. Negative brand equity is usually the result of bad management.
The greater a companies brand equity, the greater the probability that the company will use a family branding strategy rather than an individual branding strategy. This is because family branding allows them to leverage off the equity accumulated in the core brand. This makes new product introductions less risky and less expensive.
Examples:
In the early 2000s, the Ford Motor Company made a strategic decision to brand all new or redesigned cars with names starting with “F”. This aligned with the previous tradition of naming all sport utility vehicles since the Ford Explorer with the letter “E”.
The Toronto Star quoted an analyst who warned that changing the name of the well-known Windstar to the Freestar would cause confusion and discard brand equity built up, while a marketing manager believed that a name change would highlight the new redesign.
The aging Taurus, which became one of the most significant cars in American auto history, would be abandoned in favor of three entirely new names, all starting with “F”, the Five Hundred, Freestar and Fusion. By 2007, the Freestar was discontinued without a replacement, and Ford announced record losses.
In a surprise announcement, the discarded Taurus nameplate would be re-used on an improved Five Hundred which had disappointing sales and whose nameplate was recognized by less than half of most people, but an overwhelming majority was familiar with the Taurus.
Concept # 5. Brand Awareness:
Brand Awareness is the second brand equity asset. It includes brand recognition and brand recall. Brand Recognition is the ability to confirm prior exposure and recall is the ability to remember the brand when a product category is thought about. The awareness is essential for a brand to be able to take part in the decision process. Brand Awareness may exist at three levels – brand recognition, brand recall and top of the mind recall.
Brand recognition is at the bottom level of the awareness pyramid. When a person is able to confirm prior exposure, the brand said to have been recognised. Recognition means some sense of familiarity, which sometimes is sufficient in choice decision. Still higher level of awareness is reflected in a person’s ability to recall a brand without any aid when a cue about a product class is given.
The top of the mind awareness indicates the relative superiority a brand enjoys over others. Sometimes a brand is able to achieve such a dominant position that it becomes the only recalled brand in the product category. Dominant brand is one that is only brand considered while purchasing.
Concept # 6. Brand Extension:
A brand extension decision strategy is any effort to use a successful brand name to launch product modifications or new products. A successful brand is like a powerhouse containing enough energy to illuminate distinct territories. Such a brand name holds enormous appeal for consumers. It is a useful strategy which creates a lot of goodwill in the market.
For example, Dettol antiseptic to Dettol soap. The reason for the success of this strategy is reduction of launching media cost. A brand extension also, gives a new product instant recognition and fast appearance.
The existing strong brand name can be used as a vehicle for new or modified products; for example, many fashion and designer companies extended brands into fragrances, shoes and accessories, home textile, home decor, luggage, (sun) glasses, furniture, hotels, etc.
Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide, Adidas and Puma to personal hygiene.
a) Compatibility – The category chosen for the brand extension must be seen as compatible with the nature of the parent brand and the expertise it represents.
b) Consistency – There should be consistency in the value perception of the brand in the new category as compared to its parent brand. For example, Dettol represents trusted, hygienic household and personal care product.
c) Quality – The extended brand must have some inherent quality perception which gives it an edge in the new category. This might be the case if Dettol were to launch a shaving cream, it would approach consumer with a built in edge.
d) Competitive Edge – The brand name should have some in-built advantage that gives it competitive strength against established brands in the new categories.
Concept # 7. Brand Engagement:
Brand Engagement is a term loosely used to describe the process of forming an attachment (emotional and rational) between a person and a brand. What makes the topic complex is that brand engagement is partly created by institutions and organisations, but is equally created by the perceptions, attitudes, beliefs and behaviours of those with whom these institutions and organisations are communicating or engaging with.
As a relatively new addition to the marketing and communication mix, brand engagement sits in the space between marketing, advertising, media communication, social media, organisational development, internal communications and human resource management.
There is still lack of clarity and debate about whether this is a “soft” or hard measure, and whether it can be linked to any consumer or employee behavior change – e.g., sales activity, trial, or recommendation.
From an internal organisational perspective, brand engagement is about making sure the employees (and close stakeholders, such as – franchise staff, call centres or intermediaries) of an organisation completely understand the organisation’s brand, and what it stands for and to make sure that their activities on a day to day basis are contributing to expressing that brand through the customer experience.
In general, this requires an ongoing effort on the part of the organisation to ensure that its employees and close stakeholders understand what the brand is promising to its customers, and to help all employees clearly understand how their actions and behaviours, on a day to day basis, either support or undermine the effort.
This often raises the issue of the value of investment in “brand engagement.” It is a discretionary expense on the part of the organisation. Proponents of brand engagement would argue that this is an investment — that is, the benefits to the organisation outweigh the cost of the programme.
Within any organisation there is competition for resource, so there is a significant need to demonstrate Return on Investment in employee engagement/internal communications. While it is generally accepted that it is important for internal communication professionals to demonstrate the value this function delivers to the organization, it is difficult to place a discrete figure on this contribution.
Concept # 8. Brand Rationalization:
Brand rationalization refers to reducing the number of brands marketed by a company. Some companies tend to create more brands and product variations within a brand than economies of scale would indicate. Sometimes, they will create a specific service or product brand for each market that they target.
In the case of product branding, they may do this to gain retail shelf space (and reduce the amount of shelf space allocated to competing brands). A company may decide to rationalize their portfolio of brands from time to time to gain production and marketing efficiencies. They may also decide to rationalize a brand portfolio as part of corporate restructuring.
A recurring challenge for brand managers is to build a consistent brand while keeping its message fresh and relevant. An older brand identity may be misaligned to a redefined target market, a restated corporate vision statement, revisited mission statement or values of a company.
Brand identities may also lose resonance with their target market through demographic evolution. Repositioning a brand (sometimes called rebranding), may cost some past brand equity, and can confuse the target market, but ideally, a brand can be repositioned while retaining existing brand equity for leverage.
Brand managers must also manage their marketing mix in promoting their products. Measuring the marketing effectiveness of each of their marketing elements is a critical activity in understanding how to optimize their brand.
A vibrant brand helps the customer understand better what your firm is all about. A stellar brand will increase visibility and presence while differentiating your business from the competition.
Concept # 9. Brand Energy:
Brand energy is a concept that links together the ideas that the brand is experiential, that it is not just about the experiences of customers/potential customers but all stakeholders and the idea that businesses are essentially more about creating value through creating meaningful experiences than generating profit.
Economic value comes from businesses’ transactions between people whether they are with customers, employees, suppliers or other stakeholders. But for such value to be created people first have to have positive associations with the business and/or its products and services and be energised to behave positively towards them – hence, brand energy.
Brand energy has been defined as – ‘The energy that flows throughout the system that links businesses and all their stakeholders and which is manifested in the way these stakeholders think, feel and behave towards the business and its products or services’.
The act of associating a product or service with a brand has become part of pop culture. Most products have some kind of brand identity, from common table salt to designer clothes. In noncommercial contexts, the marketing of entities which supply ideas or promises rather than product and services (e.g., political parties or religious organizations) may also be known as – “branding”.
Consumers may look on branding as an important value added aspect of products or services, as it often serves to denote a certain attractive quality or characteristic. From the perspective of brand owners, branded products or services also command higher prices.
Where two products resemble each other, but one of the products has no associated branding (such as – a generic, store-branded product), people may often select the more expensive branded product on the basis of the quality of the brand or the reputation of the brand owner.
Advertising spokespersons have also become part of some brands. For example – Mr. Whipple of Charmin toilet tissue and Tony the Tiger of Kellogg’s.
Concept # 10. Brand Community:
A brand community is a community on the basis of attachment to a product or marque. Recent developments in marketing and in research in consumer behavior result in stressing the connection between product identity and culture. Among the concepts built to harness the behavior of consumers, the concept of a brand community focuses marketers on closely connecting consumers.
A brand community can be defined as an enduring self-selected group of actors sharing a system of values, standards and representations (a culture) and recognizing bonds of membership with each other and with the whole.
The term “brand community” was firstly presented by Albert Muniz Jr. and Thomas C. O’Guinn in 2001. In a scholarstic essay titled “Brand Community” published on Journal of Marketing (SSCI), they defined the concept as – “a specialized, non-geographically bound community, based on a structured set of social relations among admirers of a brand”. Brand communities are characterized in shared consciousness, rituals and traditions, and a sense of moral responsibility.
Brands which are used as examples of brand communities include Harley Davidson motorcycles, Royal Enfield motorcycles etc.
Concept # 11. Brand Monopoly:
In economic terms the “brand” is, in effect, a device to create a “monopoly” — or at least some form of “imperfect competition” — so that the brand owner can obtain some of the benefits which accrue to a monopoly, particularly those related to decreased price competition. In this context, most “branding” is established by promotional means. However, there is also a legal dimension, for it is essential that the brand names and trademarks are protected by all means available. The monopoly may also be extended, or even created, by patent, copyright, trade secret (e.g., secret recipe).
Concept # 12. Attitude Branding:
Attitude branding is the choice to represent a large feeling, which is not necessarily connected with the product or consumption of the product at all. Marketing labeled as attitude branding include that of Nike, Starbucks, The Body Shop, Safeway, and Apple Inc. In the 2000 book, No Logo, attitude branding is described as a “fetish strategy”.
“A great brand raises the bar — it adds a greater sense of purpose to the experience, whether it’s the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee you’re drinking really matters.” – Howard Schultz (CEO, Starbucks Corp.)
What is Branding – Purpose
Branding is not a new concept. It has been around for centuries as a means to distinguish the goods of one producer from those of another. Although primarily used for the purpose of distinguishing, branding today has evolved as a tool that helps the marketer in more ways than one. Brands today play a number of vital roles that improve the consumer’s lives and help organisations fulfill their objectives.
i. Brands help the consumer to identify the source or the maker of the product and allow consumers to assign responsibility for its performance to a particular manufacturer or producer.
ii. Brands help consumers in decision making and help them to reduce the risk associated with the purchase of products and services.
iii. Brands help organisations to organise inventory and maintain accounting records.
iv. Brands offer organisations legal protection for unique features of the product/service. The brand name can be protected through registered trademark; and similarly manufacturing processes can be protected through patents.
v. Brands help organisations by influencing consumer behaviour. They can also be bought and sold and are a source of future revenue for organisations.
vi. Organisations are known to have paid large earnings for brands in mergers and acquisitions, justifying the premium paid on the basis of extra profits to be extracted and sustained from the brands.
Thus we can see that strong brands lead to better earnings, and profit performance for the organisation, and create greater value for shareholders as well as other stakeholders.
What is Branding – Elements: Brand Image, Brand Identity, Brand Franchise, Brand Preference and Brand Patronage
i. Brand Image:
A great brand has the power to create and reinforce a visual image. Often it takes a lots of advertising to imprint a brand image into the hearts and minds of the company customers.
A great brand is nothing if the product doesn’t deliver or if the business plan is flawed. Creative advertising may be writing, but if people don’t remember the brand name or message, it has failed in building the brand image. All companies are vulnerable. A brand image can live on, or it can lose its luster.
A brand is a visual image, a cure that people associate with a company. Building quality and purpose into a brand helps to sell the product and create a loyal customer base. Many products have become commoditised, that is, and one brand is (perceived) as good a substitute as the other.
ii. Brand Identity:
‘Brand Identity’ is the total proposition that a company makes to consumers – the promise it makes. It may consist of features and attributes, benefits, performance, quality service support and the values that the brand possesses. The brand can be viewed as a product, a personality, a set of values and a position, it occupies in people’s mind.
Brand identity is everything the company wants the brand to be seen as. It represents what is true and authentic about a brand. It is the cognitive and emotional understanding of the products, or organisation in the minds of existing customers and future customers. It is a state of mind that the marketer attempts to create in customers he wants to reach. To create this state of mind, all kinds of marketing techniques such as – advertising, logos, celebrity endorsements, musical themes, event sponsorship etc., may be employed.
Through brand identity, the marketer’s goal is to create a compelling connection in customer’s mind between the product or company and some other attributes of value to the customer.
iii. Brand Franchise:
The essence is to build up steadily the brand franchise or privilege. Branding enables a company to influence customers and develop customer preferences towards brands. Advertising and sales promotion can create initially brand awareness and recognition. Then, it can develop brand preference and, if possible, brand loyalty. The most desired objective is brand insistence. It is the stage when consumers so prefer a given brand that they will insist upon buying it and will not settle for substitute.
A seller has a brand franchise if customers exhibit brand insistence, brand loyalty or brand preference towards his product or service, rather than gaining mere brand awareness or recognition. A seller would always try to move buyers from brand awareness to brand preference, loyalty and insistence. Brand preference indicates that customer regards the brand favourably but he will accept a substitute if the said brand is not available in the market.
Brand recognition indicates the customers, favourable attitude towards the brand. This is the minimum expectation of the advertiser while developing brand franchise.
iv. Brand Preference and Brand Patronage:
Branding not only gives separate identity and easy recognition to the product but it also creates special brand preference and brand loyalty. Branding is a powerful instrument of demand creation and demand retention. Popular brands such as – Lux, Liril, Vimal, Colgate etc., have very great pulling power in the market.
Development of loyal customers, acting as a talking advertisement and repeat buyers is the greatest reason in favour of branding. Such customers will always insist on buying their favourable brand. In a competitive market, a clear message of service and appreciation, responsiveness to the customers and value in the brand and brand name produces consumer loyalty to the brand.
What is Branding – 5 Major Types: Individual Brand Name, Family Brand Name, Umbrella Brand, Combination Device, Private or Middlemen’s Brand
1. Individual Brand Name:
Each product has a special and unique brand name, such as Ranipal, Surf, Chelpark ink, Ovaltine, Aspro, etc. The manufacturer has to promote each individual brand in the market separately. This creates a practical difficulty in promotion. Otherwise, it is the best marketing strategy (art or tactics).
2. Family Brand Name:
Family name is limited to one line of a product, i.e., products which complete the sales cycle, e.g., ‘Mohuns’ for breakfast foods, ‘Amul’ for milk products, ‘Dipy’ for fruit squashes and syrups, ‘Erasmic’ for toiletry, ‘Acme’ or ‘Ponds’ for cosmetics, etc. Family brand name can help combined advertising and sales promotion. However, if one member of the family brand is rejected by consumers, the prestige of all other products under the family brand may be adversely affected.
The manufacturers have to take extra-ordinary care to guard against this danger. This method of branding assumes that end-uses of all products under a family brand are similar and the products are not dissimilar.
If ‘Kissan’ food manufacturers manufacture tractors or agricultural machinery, they should not use the same ‘Kissan’ ‘brand’ name for these goods. Similarly, products exclusively for men and those specially for women should not be sold under the same family brand name, as these two classes of customers who demand them are different.
Family brand name enables creation of strong shelf display. It helps to secure quick popularity. It is preferable to separate brands for each product.
3. Umbrella Brand:
We may have for all products the name of the Company or the manufacturer. All products such as soaps, chemicals, textiles, engineering goods, etc., manufactured by the Tata Concerns, will have the “Tata’s” as one umbrella brand. Such a device will also obtain low promotion cost and minimise marketing effort.
The pulling effect for all products will be considerable when the company’s name or the name of the business house is outstanding and shining in the market. However, a single bad experience in any one of the lines of products, a solitary failure, may be very dangerous to the rest of the produces sold by a particular business house under the umbrella brand.
4. Combination Device:
Tata house is using a combination device. Each product has an individual name but it also has the umbrella brand to indicate the business house producing the product, e.g., Tata’s Tej. Under this method, side by side with the product image, we have the image of the organisation also. Many companies use this device profitably.
5. Private or Middleman’s Brand:
Branding can be done by manufacturers or distributors such as wholesalers, large retailers. In India this practice is popular in the woolen hosiery, sports goods, and such other industries. It helps small manufacturers who have limited resources and who have to rely on the middlemen for marketing. It is also used by big manufacturers. The manufacturer merely produces goods as per specifications and requirements of distributors and he need not worry about marketing. Middlemen enjoy more freedom in pricing products sold under their own brands. They have more control over distribution.
Manufacturers make both national and private or middleman’s brands. Brand label points out either the name of the manufacturer or the name of the distributor but not both. Consumer rarely knows who is the manufacturer of the private or dealer’s brand.
What is Branding – Basic Components: Personality, Name, Logo Design, Slogan, Packaging, Standards, Product Range, Performance and Promise
The whole meaning of the brand includes business name, logo, colour scheme and design style that expresses the product and service, in symbols along with words and images the target audience understands.
These are the basic components of branding:
1. Personality- This is the speciality or area of expertise of a particular brand. These are the points of comparison the customers will depend on to differentiate a brand from the competition.
2. Name, logo design and slogan- A strong brand name and slogan must be easy to say and remember. The name and logo paint a picture of the company in the customer mind.
3. Packaging- This includes not just the physical packaging, but also the website, blog, the colour scheme, design elements as well as the advertisements, flyers, business cards, sales letters and other business materials.
4. Standards- This will determine the business objectives. It decides how the business will develop, behave and react in the social set up.
5. Product range- This is regarding the range of products (product mix) that the company has to offer. It also considers whether the company has local, national or international presence.
6. Performance- It is the way the business is promoted, the selling style, the approach in customer service, how the business responds to emails or answers the phone, how they negotiate contracts, how they meet client deadlines, how they pay up their bills, how they treat their employees and how their staff thinks of them.
7. Promise- This is the assurance, the guarantee for meeting customer expectations. This will include product benefits, price value, and overall customer shopping experience.
To build a strong brand, every marketing communication must be clear and should consistently deliver the promised value to the customer. When customer expectations are met, the brand is strengthened, instilling long-lasting customer confidence and loyalty to the brand.
What is Branding – Importance
Branding has become a vital part of modern marketing. Kotler has pointed out that the growth of brand names has been so dramatic that today in the USA hardly anything is sold unbranded. Brand identification is essential for the firm wanting to differentiate its product, giving the company some degree of control over the product’s resale by middlemen and at the same time enhancing promotional effectiveness. Through brand identification a company prepares itself to compete on a non-price basis.
Branding is a powerful instrument of advertising and sales promotion in order to secure consumer loyalty towards the brand.
More specifically the importance of branding is as follows:
1. Product differentiation by branding enables manufacturers to establish their own price and eliminate price competition to some extent. Branding establishes an image for the product and the company which widens the market and promotes sales. It creates an exclusive market for the product.
2. The manufacturer can build up a bright image of his product around the brand. A brand image is built up through years by the quality of products produced, services rendered and the company’s marketing efforts.
3. Branding not only gives a separate identity and individuality to the product but it creates special brand loyalty and brand preference. Branding is a very effective instrument for demand creation and demand retention.
4. If a company has one line of branded goods, it can add a new item to its lists easily and the new item can enjoy all the advantages of branding immediately.
5. When a particular brand of a product is used by a consumer with satisfaction, he will obviously ask for it repeatedly. In this way, the brand name becomes its own advertisement in the course of time. This leads to economy in selling costs.
6. The middlemen like wholesalers may be eliminated through branding. The manufacturers of popular brands generally find it economical to set up their own retail stores for selling their branded products. The producer as well as consumers will be benefited if the middlemen who appropriate a sizeable proportion of price are eliminated.
From the standpoint of consumers, branding has many advantages. It saves his time in shopping and selecting his product each time he makes a purchase. It guarantees product quality and the brand owner has a tendency to improve the quality of his products in order to maintain his reputation in the market.
What is Branding – 6 Important Levels: Attributes, Benefits, Values, Culture, Personality and User
A brand conveys up to 6 levels of meaning.
These can be briefly described as follows:
1. Attributes.
2. Benefits.
3. Values.
4. Culture.
5. Personality.
1. Attributes:
A brand first brings to mind certain attributes, e.g., a Mercedes suggests expensive, well built, well-engineered, durable, high prestige fast and so on.
One or more of the attributes are generally used to advertise the car. Tagline “Engineered like no other car in the world”.
2. Benefits:
A brand however is more than a set of attributes. A customer does not buy attributes; he buys benefits that these attributes offer. Hence the attributes need to be transferred into functional/emotional benefits.
Example – Durable – I do not need to buy a new car for next 10 years – Functional Benefit.
Example – Expensive – The Car helps me feel important and admired – Emotional Benefit.
3. Values:
A brand also says something about the producers’ values.
E.g., Mercedes stands for High performance, safety and prestige, TATA’s stand for quality, fair price and so on.
4. Culture:
The brand may represent certain culture.
Example – The Mercedes represents German Culture – Organised, Efficient and High Quality, Coke is an icon of American Culture, and Shilpa Bindis represent typically Indian culture.
5. Personality:
The Brand can also project certain personality. To understand this one needs to ask, if the brand were a certain person, animal or object, what would come to your mind?
Example – Animal – Mercedes might suggest a reigning, royal Lion, or Object – An austere palace, Personality – A No-nonsense Boss.
MRF suggests a muscle man; Cherry Blossom refers to Charlie Chaplin.
6. User:
The Brand suggests the kind of a consumer who buys or uses the product.
Example – An advertisement showing a 20 year old secretary driving a Mercedes would seem out of place, whereas a 55 year old CEO or top executive driving a car would fit the image.
While studying brands, it is important to contrast/compare a commodity (Product) with a brand.
A product or commodity is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a need or a want.
Thus a product may be:
i. Physical goods.
ii. Service.
iii. Idea.
A brand on the other hand is therefore a product, but one that adds another dimension that differentiates it in some way from the other products designed to satisfy the same needs.
The differences may be rational and tangible (Related to product performance of the brand) or more symbolic, emotional and intangible (related to what the brand represents).
What distinguishes a brand from its unbranded commodity counterpart is the sum total of the consumers’ perception and feelings about the product’s attributes and how they perform, about the brand name and what it stands for, about the company associated with the brand.
What is Branding – Approaches: Individual Product Branding, Family Branding, Co-Branding, Private or Store Branding, Multiple Branding, Brand Licensing and a Few Others
Branding approaches include the following:
Approach # 1. Individual Product Branding:
Under this branding approach new products are assigned new names with no obvious connection to existing brands offered by the company. Under individual product branding the marketing organization must work hard to establish the brand in the market since it cannot ride the coattails of previously introduced brands.
The chief advantage of this approach is it allows brands to stand on their own thus lessening threats that may occur to other brands marketed by the company. For instance, if another company brand receives negative publicity this news is less likely to rub off on the company’s other brands that carry their own unique names.
Additionally, brands can create financial gains through the concept known as brand equity. Under an individual branding approach, each brand builds its own separate equity which allows the company, if they choose, to sell off individual brands without impacting other brands owned by the company.
The most famous marketing organization to follow this strategy is Procter and Gamble, which has historically introduced new brands without any link to other brands or even to the company name.
Approach # 2. Family Branding:
Under this branding approach new products are placed under the umbrella of an existing brand. The principle advantage of this approach is that it enables the organization to rapidly build market awareness and acceptance since the brand is already established and known to the market.
But the potential disadvantage is that the market has already established certain perceptions of the brand. For instance, a company that sells low-end, lower priced products may have a brand that is viewed as an economy brand. This brand image may create customer confusion and hinder the company if they attempt to introduce higher-end, higher priced products using the same brand name.
Additionally, as observed with individual branding, with family branding any negative publicity that may occur for one product within a brand could spread to all other products that share the same name.
Approach # 3. Co-Branding:
This approach takes the idea of individual and family branding a step further. With co-branding a marketer seeks to partner with another firm, which has an established brand, in hopes synergy of two brands on a product is even more powerful than a single brand. The partnership often has both firms sharing costs but also sharing the gains.
For instance, major credit card companies, such as Visa and MasterCard, offer co-branding options to companies and organizations. The cards carry the name of a co- branded organization (e.g., University name) along with the name of the issuing bank (e.g., Citibank) and the name of the credit card company.
Besides tapping into awareness for multiple brands, the co-branding strategy is also designed to appeal to a larger target market, especially if each brand, when viewed separately, does not have extensive overlapping target markets with the other brand. Thus, co-branding allows both firms to tap into market segments where they did not previously have a strong position.
Approach # 4. Private or Store Branding:
Some suppliers are in the business of producing products for other companies including placing another company’s brand name on the product. This is most often seen in the retail industry where stores or online sellers contact with suppliers to manufacture the retailer’s own branded products.
In some cases the supplier not only produces product for the retailer’s brand but also markets their own brand so that store shelves will contain both brands.
Approach # 5. No-Name or Generic Branding:
Certain suppliers supply products that are intentionally “brandless.” These products are mostly basic commodity-type products that consumer or business customers purchase as low price alternatives to branded products. Basic household products such as – paper products, over-the-counter medicines such as – ibuprofen, and even dog food are available in a generic form.
Approach # 6. Multiple Branding:
Multiple Branding strategy consisting of seller’s developing two or more brands in the same product category. Each of the brand is positioned somewhat differently in the consumers mind. The multi-brand approach is the logical consequence of a differentiation strategy and as such cannot co-exist with a low cost policy, in view of reduced economies of scale, technical specialization, specific sales networks and necessary advertising investments.
Approach # 7. Brand Licensing:
Under brand licensing a contractual arrangement is created in which a company owning a brand name allows others to produce and supply products carrying the brand name. This is often seen when a brand is not directly connected with a product category. For instance, several famous children’s characters, such as – Sesame Street’s Elmo, have been licensed to toy and food manufacturers who market products using the branded character’s name and image.
What is Branding – Branding Decision Process: Branding Decisions, Brand Sponsor Decision, Brand Strategy Decision, Brand Repositioning Decision
The organisations have to make several decisions with regards to branding of their products.
Let us take a detailed look at this process:
Step # 1. Branding Decision:
The first branding strategy decision is whether to develop a brand name for a product. In today’s competitive situation, this actually is a foregone decision. It is quite difficult to find an unbranded product today.
Step # 2. Brand Sponsor Decision:
This decision is about the control of the brand and with whom it stays. If the organisation produces or manufactures a product and wants to brand the product on its own, it is called as a manufacturer’s brand. As against this the manufacturing organisation may decide to let the stores that sell the product to brand their product and sell it; in this case it would be a Distributor’s brand. Similarly an organisation can license a brand and use it on their product. Here it is a licensed brand.
Step # 3. Brand Name Decision:
The organisation now has the responsibility of choosing a brand name for its product.
Four general strategies are often used to choose a brand name:
i. Individual Names:
Here the organisation gives different names to different products, even within the same product line. To cite an example – Hindustan Unilever gives different names to its various products like Lux, Lifebuoy, Dove, Liril for the Soaps (Personal Care), Surf, Wheel and Sunlight for the detergents (Fabric care) and Lipton, Red Label and Taj Mahal (Tea Brands). A major advantage of using individual names is that the organisation does not tie up its reputation to the brand. That is if, the product fails for some reason, it does not hurt the image of the organisation.
ii. Blanket Family Names:
Organisations using this strategy use the same blanket family name for the diverse product categories. This strategy is seen with the TATA group. TATA brand name is used for diverse categories such as – salt, tea, automobiles as well as for steel. The advantage of this strategy is that the organisation does not have to spend heavily on advertising and promotion as the brand name is already known and consumers are able to identify with it.
iii. Separate Family Names for All Products:
Here the organisation uses separate names for separate category of products. The Aditya Birla Group follows this strategy. Hindalco for aluminium, UltraTech fro Cement, Grasim and Graviera for fabrics.
iv. Corporate Name Combined with Individual Product Names:
Here the organisation combines its corporate brand name with the individual product names, for example, Nestle. Nestle Munch and Nestle Kit-kat in chocolates, and similarly Nestle Everyday Dairy Whitner, Nestle Milkmaid and Nestle Slim Milk in Milk and dairy category. Another example is Cadbury, which has Cadbury Five Star and Cadbury Dairy Milk in chocolates.
Step # 4. Brand Strategy Decision:
This step is about the brand strategy decision. The organisation needs to take a call on the type of strategy that it will follow.
The organisation can select from the five common strategies:
i. Brand Extensions:
An organisation may decide to use an existing brand name to launch a product in a new category. The advantage of this strategy is that a well-established brand name gives the new product instant recognition and quicker acceptance. This also helps in saving advertising costs that would be required otherwise to familiarise consumers with the brand.
However there are also certain risks associated with this strategy. The new product may not be up to the consumers’ expectations and may end up damaging the organisation’s reputation. Although it is a good strategy, the brand name should suit the new product category as an inappropriate brand name may end in a marketing disaster for the organisation.
ii. Line Extension:
In this strategy, the organisation introduces additional items in the same product category, under the same brand name, usually with new features like Flavours, Colours, and Sizes etc. The advantage is similar to that of Brand Extension strategy. Infact recognition and acceptance is more, since the newly introduced product belongs to the same product line.
The risk however is that if the product fails, it may damage the reputation of the entire product line. Besides, the brand name may lose its specific meaning.
iii. Multi-Brands:
An organisation that introduces additional brands in the same product category is said to be using the multi-brand strategy. This strategy is generally used when the organisation is trying to establish different features or target different customer segments/markets having different buying motives.
The main advantage of this strategy is that it helps organisations to lock up more of the distributor shelf space and to protect its flagship brands or major brands by introducing other brands which are also called as flanker brands. The risk associated with this strategy is that, each brand might obtain only a small market share with none of the brands being particularly profitable, with one brand cannibalising the others.
iv. New Brands:
In certain cases the existing brand names do not suit the new product category or are found inappropriate for the new product category. In such cases the organisation finds it suitable to create new brand names.
While this strategy gives the new brands a distinct image and detaches it from existing brands, the advertising costs to familiarise the consumers and create a trust amongst them is considerable.
v. Co-Brands:
Also known as dual branding, it is a strategy in which two or better known brands are combined in an offer. Each brand stands to benefit from the others in terms of influencing the preference or purchase intention of the consumer. In case of co-packaged products, organisations entering into co-branding hope to reach newer audiences by associating with the other brand.
There are various forms of co-branding. When Lenovo advertises its laptops indicating the usage of Intel processors, it is component co-branding. Another form is same-company-branding, as in when an organisation brands two of its products. Another form is joint venture co-branding when two or more organisations brand their products together.
Step # 5. Brand Repositioning Decision:
No matter how well a brand is positioned, a company may often have to reposition its brand. This happens when a competitor may place a brand next to the organisation’s brand, or there may be a decrease in demand for some reason.
What is Branding – Importance of Branding in the Marketing Programme: Product Differentiation, Brand Image, Creation of Market, Brand Reference and a Few Others
A product strategy ignoring the problem of product identification and differentiation through branding omits a most important element in the marketing mix. Branding is a powerful instrument of advertising and sales promotion in order to secure consumer loyalty toward the brand.
The reasons for granting unique importance to branding in the marketing programme are given below:
1. Product Differentiation:
Product differentiation by branding enables manufacturer to establish his own price and eliminate price competition to some extent. A branded product enjoys a separate individuality.
2. Brand Image:
The seller can build up a bright image of his product around the brand. A brand image is built up through the years by the quality of product produced, services offered, and the company’s reputation, policies and marketing efforts. It is very difficult to estimate a brand image.
3. Creation of Market:
Ever-increasing competition leads to branding of product by a manufacturer to face competition and create exclusive market for the product.
4. Advertisement and Publicity:
Branding helps advertising, display and sales promotion. Branding and packaging go hand in hand. Package itself can act as a medium of advertisement. Brand names make word-of-mouth advertisement very effective.
5. Brand Preference:
Branding not only gives separate identity and easy recognition to the product but it also creates special brand preference and brand loyalty. Branding is a powerful instrument of demand creation and demand retention. Popular brands such as Lux, Liril, Vim, Colgate and Sunlight have very great pulling power in our market.
6. Brand Patronage:
Development of loyal customers, acting as talking advertisements and repeat buyers is the greatest reason in favour of branding. Such customers will always insist on buying their favourite brand. In a competitive market, a clear message of service and appreciation, responsiveness to your customers and value in the brand name produces consumer loyalty to your brand.
7. Expanding the Product Mix:
Many successful multiproduct firms today began with a single product whose success created an umbrella under which additional products could be launched with less risk. Customers remember the familiar and the successful. After winning the battle of customer recognition they have simply to win market acceptance for their new offerings. All products in their product mix are sold under one blanket or family brand. A new product associated with respected brand is willingly received by consumers and dealers.
What is Branding – Branding and Consumers
Consumers while buying pre-packed branded goods use the following guidelines to measure quality in relation to price- 1. Tips from friend, 2. Advertising, 3. Slogans, 4. Brands and trademarks, 5. Labels, and 6. Comments from salesman. Generally, price is used as a measure of quality. There is a firm belief in the minds of many consumers that high price is an indication of quality.
The sellers fully capitalise this consumer belief. Lack of confidence and lack of precise knowledge compel consumers to rely heavily on the familiar, heavily advertised, and generally high-priced goods. Repetitive advertisement tells consumers that advertised brands assure high quality, but consumers are rarely given facts and figures or factual evidence to prove higher quality. Price is no reliable indication of quality.
Comparative testing conducted by consumer organisations has led to the Conclusion that there is no dependable correlation among brand, price and quality. Though the goods sold under the manufacturer’s brand and dealer’s brand are produced by one producer in the same factory, the price spread between these two brands is quite appreciable. Manufacturer’s brand is a national brand and it is heavily advertised, hence, sold at a higher price.
Branding process may be against public interest. It needs attractive packaging, heavy advertising and promotional expenditure. These raise the retail prices of branded goods even by 20% to 25%.
When goods are sold under a brand name, they appear to be different from each other even though basically they may not be really different. For example, detergents are sold at least under 5 to 8 brands. All are practically alike. We are deceived into believing that each brand is unique from the other. Such a practice is wasteful. Consumers get similar experience in different brands of same drugs, e.g., antibiotics.
The utility of branding diminishes as the consumers’ faith and confidence in the product increases. Until that stage is reached branding is desirable as it is the best means of identification. In India we have yet to reach that stage.
As long as branding is considered desirable and as long as we do not have overflow of branded goods, consumers in India may have the following benefits of branding:
1. Right kind of brand advertising and personal selling provide ample information to the consumer about the branded products.
2. Branded goods have uniform and standardized quality as the owner of the registered brand is personally responsible to maintain the quality. There is no need of personal inspection and no danger of adulteration.
3. Rapid sales turnover assures fresher product due to frequent replacement of stock with the retailer.
4. There is considerable saving in time in the selection of goods and also in the making up of orders.
The consumer demands the product by quoting the special brand name, e.g., Arrow shirts, Brooke Bond Tea. Retailer is saved from botheration of separate weighing, measuring, packing, etc. He merely displays the brands and takes money acting only as a distributing agent.
In Western countries due to numerous brands for similar products, at present, brand names are not dependable guides as to quality and performance and there is no close relationship between brand, quality and price. To that extent, consumers cannot totally rely on branding as a sure guide of quality.
The variety and complexity of products create a practical difficulty for average consumer in choosing a product to satisfy his wants. Thus, consumer has become dependent on branding. The manufacturers have taken full advantage of this dependency by spending crores of rupees on advertising to keep their brand names constantly before the consumer. Consumers buy Brand X because the advertisements tell them constantly to buy Brand X only and not any other brand.
What is Branding – Benefits: Recognition, Builds Loyalty, Command a Price Premium, Attract Non-Users, Helps in Extension and Lesser Risk for Customers
Companies can enjoy many benefits as a result of branding. Brands enable a company to command a price premium, increase goodwill, build customer loyalty and facilitate extension of business in the long run.
Benefit # 1. Recognition:
A brand helps a customer to recognize a product and know its source of origin. A memorable brand name is retained in the mind of the customer and increases the chances of his choosing the company again in future.
It is the company mascots, colour and design that are more easily identified by the customer. The bright yellow packaging of Maggi noodles is immediately recognized by children.
Benefit # 2. Builds Loyalty:
Customer loyalty is built up as a result of good branding. If a customer chooses a product and is satisfied after using it, he is more likely to buy the same brand of product. The brand identity helps to create loyalty.
Loyal customers are the best source of advertisement for any company as they promote a brand through way of mouth recommendations. If a girl uses a certain brand of cosmetics, she will definitely tell her friends about it.
Benefit # 3. Command a Price Premium:
Brands enable a company to command a price premium in the market. People are often willing to pay more for a recognized brand than for an unrecognized brand or unbranded goods.
Brand loyalty also plays a role here—loyal customers are less price-sensitive and would not change brands even if their favourite brands raise their prices. MDH spices are costlier than unbranded spices, yet loyal customers prefer to buy it because of brand image.
Benefit # 4. Attract Non-Users:
Branding not only builds loyalty among users, but it also attracts non-users of the product towards people who are aware of a particular brand even if they have never personally used it may be attracted to try it.
Branding helps to expand customer base by appealing to non-users. If a user of Pears soap is aware about the image or benefits of Lux soap, she may try it once for a change. In case she likes it, she may shift to this brand in future.
Benefit # 5. Helps in Extension:
A good brand name is of great help to the company when it wants to extend its product line. Introducing a new product under a well- known existing brand is less risky than launching a product under a new brand name.
Hindustan Unilever introduced a new range of conditioners under the popular existing brand name Sunsilk. The product found immediate acceptance in the market.
Benefit # 6. Lesser Risk for Customers:
People are not aware about the quality of unbranded goods, so it is riskier to buy them. But when a customer buys a reputed brand, he knows that he is minimising his risks. Consumers look upon the brand name as a symbol of quality of a product’s characteristics and features.
Brands assure the buyer of quality and standards, and the customer knows that he will get value for the money he spends.
What is Branding – Limitations and Demerits: Cost, Social Restriction, Image, Brand Maintenance, Complex, Difficult and Expensive to Change
If there are many advantages of branding, there are several limitations also.
Following are some of the demerits of branding:
1. Cost – Certain costs arise in branding on account of various promotional and advertising techniques. One inexpensive method is by going viral, in which word of mouth and the Internet provide momentum for the company.
2. Social Restrictions – Branding is effective for commercial products as costs are passed on to the consumer in terms of higher prices. However, branding suffers when applied to social industries.
3. Image – When an individual or group is associated with a brand program; problems arise if the image suffers. This could happen due to a high profile legal case against the company because of an exceptional problem. However the entire image suffers due to this.
4. Brand Maintenance – For a brand to succeed, effort must be expended in maintaining the brand presence. For this large companies, in particular, need a brand division. Finding the right balance between maintaining the brand is important.
For example, in order to protect its brand trademark, McDonald’s sues any and all businesses using the McDonald’s name or variation of the name. A restaurant bearing the name “Little Mac” changed its name when McDonald’s corporate lawyers threatened legal action. Actions such as this have the potential to tarnish a brand image.
5. Complex – The brand identity building process is complex. This is especially true for organizations that offer a range of services and products. The process entails extensive research, including market research, marketing audit, competitive audit and usability, and a clear branding strategy. Marketers have to keep this in mind and ensure that the brand identity is aligned with, and relevant to, its customers.
6. Difficult and Expensive to Change – Changing and modifying brand identity is difficult and entails extensive planning and managerial skills. Managers responsible for the change are required to possess sound public relations, branding, communications, productions, marketing and management expertise. Information about the change must be conveyed to customers and other stakeholders. Change often is met with resistance and a brand may lose valuable customers.