Great Small Business Ideas to Start: Branding
The creation of a powerful and well-respected brand is the key to increasing market share and company value. Brands are key intangible resources that need to be carefully developed and maintained. Their features include reputation, trust, loyalty, and understanding among customers.
The idea
A brand is a design, name, or identity that is given to a product or service in order to differentiate it from its competitors. Customers know they can expect certain values associated with brands. For example, Rolls-Royce cars are associated with quality, reliability, and prestige, while Wal-Mart built its reputation on homely convenience and low price.
Brands are complex assets. One method of managing brands is to view them as having “personalities.” This concept of brand personality highlights their power. Rolls-Royce is a brand with an almost mythical status: a byword for engineering standards that have long been met or even surpassed by others.
The advantages of trusted brands are clear:
- Pricing. A successful and established brand can command a substantial price premium, exceeding the extra cost in terms of production and marketing. This derives from the element of trust that a brand provides. Research in Britain has shown that consumers are often prepared to pay 30 percent extra for a new product from a trusted brand than for one from an unnamed one.
- Distribution advantages. An established brand can ensure manufacturers get the best distributors. Distributors are more receptive to a new product from an established brand.
- Brand identity or image reinforces the product’s appeal. The Rolls- Royce brand has a stately identity and is associated with values of craftsmanship, tradition, and prestige; Volvo has a different brand identity, with associated values of safety, functionality, and family orientation. The brand values of different products reinforce their appeal to specific market segments.
- Brands help to build customer loyalty, because of the trust and affection they generate.
- Brands make it easier to introduce new products by exploiting “brand equity.”
- Brands provide opportunities to open up new market segments.
- For example, food manufacturers create sub-brands with diet versions of products.
- A strong brand enables products to overflow from one geographic market into another. This is particularly the case in industries affected by fashions.
- Brands can extend the life of a product. As brands combine trust and respect, careful marketing can exploit these qualities and inject new life into a stagnating product. For example, Danish toy maker Lego produces toys linked with movies.
- Brands provide a valuable, market-oriented focus around which firms can organize themselves. The brand manager is often directly responsible for what the product offers, as well as how it appears to the customer.
In practice
- Understand how the brand will be used. Is it to provide reassurance, to enable a premium price, or to create a desire to buy? Understand what benefits the brand offers customers, and how reliable and trustworthy it is.
- Know what the brand means to customers, then deepen this appeal. Ensure the tone of marketing is commensurate with the brand values and target market.
- Identify how the brand differentiates a product from competitors, to decide which attributes to emphasize.
- Conduct an audit of the brand to determine how strong it appears to customers. This will reveal how the brand can be used in new markets.
- Ensure there is sufficient investment in the brand, and discover how the brand can be strengthened. This active brand management will build customer value and loyalty.