25th Jun 2010
Branding originated from the practice of marking animals and other possessions with a sign of ownership. However, commercial branding really gained ground in the latter years of the 19th century with the more recent developments of mass communication and the internet adding explosive power to its proliferation.
More often than not a brand is linked by a name, sign or symbol(logo) used to identify items or services of the seller(s) and to differentiate them from goods of competitors. Signs and symbols are part of what a brand is, but brands have their own values and their own positioning.
The question “What is a brand?” raises many, often contradictory responses.
A succinct definition is: A brand is a collection of perceptions in the mind of the consumer.
Which raises some key points
:A brand is very different from a product or service. A brand is intangible and exists in the mind of the consumer.
This definition helps us understand the idea of brand loyalty and the 'loyalty ladder'. Different people have different perceptions of a product or service, which places them at different points on the loyalty ladder.
It explains how advertising works. Advertising has to sell, and it achieves this by positively influencing people's perceptions of the product or service.
Benefits of branding
Branding your business yields both internal and external benefits. Externally, you create an identity that resonates with customers. You form emotional relationships with customers. That's important because people don't buy products logically, they buy with their emotions.
Within the business, your brand serves as an internal compass of focus. If you clearly brand you business, you have an understanding of what you are about. You have a self awareness that dictates your actions. All decisions, not just marketing, are made in alignment with the brand. Over time, you build a stronger business identity.
Brands also have value, sometimes referred to as brand equity. This is particularly the case in the consumer market. In 2002 the stock value of Coca Cola was an estimated $136bilion, yet the net asset value of the company was only $10.5billion. The vast majority of this $125billion gap was in the value of the company's intangibles, its brand. Likewise it is estimated that 70% of McDonalds value comes from its brand. This is partly why brand are protected via trademarks.
However, it should also be remembered that perceptions linked to a brand's name and symbol that adds to can be negative and detract from an organisation's value. To this end brand’s must always seek to live up to their promise in terms of what they provide, functionally, emotionally, or both.If the reality of who you are doesn’t match the brand personality you project to the world-at-large you will end up with some very upset customers. The best brands are built from the inside out, based on real values that can be sustained.
Brand names fall into one of three spectrums of use — Descriptive, Associative or Freestanding:
brand names assist in describing the distinguishable selling point(s) of the product to the customer e.g. Snap, Crackle and Pop.
brand names provide the customer with an associated word for what the product promises to do or be e.g. Walkman
brand names have no links or ties to either descriptions or associations of use. eg Mars Bar.
These are many and varied and what follows below is by no means an exhaustive list.
Often, especially in the industrial sector, it is just the company's name which is promoted eg IBM.
In this case a very strong brand name or company name is made the vehicle for a range of products, for example, Mercedes-Benz, or even a range of subsidiary brands such as Cadbury Dairy Milk, Cadbury Flake etc.
Each brand has a separate name which may even compete against other brands from the same company eg Persil, Omo, Surf and Lynx are all owned by Unilever.
Attitude branding and Iconic brands
Attitude branding is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption - Nike, Starbucks, The Body Shop while Iconic brands are defined as having aspects that contribute to consumer's self-expression and personal identity eg Apple or Harley Davidson.
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, etc. Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide.
Alternatively, in a market that is fragmented amongst a number of brands a supplier can choose deliberately to launch totally new brands in apparent competition with its own existing strong brand to soak up some of the share of the market which will in any case go to minor brands. This is particularly true in the detergents and homeware markets.