The Importance of effective branding
The Importance of Effective Branding in Business
1. The Impact of Poor Branding on Financial Performance
Poor branding is not just specific to the difference between the more recognized brands. Small companies also suffer and won't be able to make up lost ground. In 2000, trade associations and small companies in the USA complained to the Better Business Bureau regarding a proposed rebranding of the US Postal Service. It was claimed that money was being wasted and would have no return for taxpayers and postal customers. A study on the financial impact of the rebrand showed the cost to be $35 million, but with no increase in customer awareness of the new brand or service changes. This hurt the organization's revenue, so much so that the previous year's discounts to consumers on mailing services were rescinded. Small express mail competitor companies claimed that the public was confused and thought that the postal service customer and brand image had changed even though the services themselves had not. This led to increased competition in an area largely dominated by the postal service and an increase in market entry by new players. It also reduced customer loyalty as the change in brand reflected a radical globalization of service meaning the new priorities were not national consumer-oriented. Evident by the fact that by 2003 $7.6 billion of mail contracts to transport mail from airlines to the postal service were delayed or canceled. This rebrand indirectly led to a loss of competitive focus and the express mail market proved to become too expensive with price increases from the postal service, the new market conditions no longer showing sufficient profitability caused many companies to dissolve or merge with larger firms. This damaged industry confidence in the postal service and its ability as a reliable business partner, with one such example of lost confidence being Airborne Express' and Air Transport International's $190 million lawsuit for breach of contract and services not rendered. A study of the effects of the US postal rebrand, using customer perception and Marketing Mix Theory might be an interesting if not depressing academic exercise. (Wedel et al.2020)
• High costs and poor returns
• Brand inconsistency
• Lower price resistance
• Lost distributor confidence
• Loss of competitive focus
• Reduced customer loyalty
• Decline in employee pride and morale
• Cause the need for a rebrand
2. Missed Opportunities: How Poor Branding Hinders New Business
Your brand must be communicated through everything that the customer can see, read, and hear. This includes your staff, your logo, your corporate message, phone/fax, business cards, etc. Your brand is what your company stands for. At the most basic level, your brand is your promise to your customers. It tells them what they can expect from your products and services, and it differentiates your offering from that of your competitors. Your brand is derived from who you are, who you want to be, and who people perceive you to be. A clear brand strategy is useful to most people who are involved with the business, including staff, clients, suppliers, and partners. It provides a clear understanding of what the company is about and makes it clear to the staff whether they are on or off-brand. Positive branding is essential for businesses, especially small businesses and start-ups. Many small businesses make the mistake of overlooking branding efforts because they feel it's unnecessary. Let's see how the lack of an effect has on new business and how it can hinder the process.
3. Key Elements of Successful Branding
The second P is price. What can often make or break a brand, if consumers feel your product gives good value they are more likely to recommend it to others or even buy it again. Penetration or skimming strategies are usually employed concerning price. The former involves setting the price of a new product artificially low to achieve a new, and may be higher, long-term market position and to do this it will be necessary to have cost-efficient production. A skimming pricing strategy involves setting the price high initially, then lowering it until the product meets its demand. This strategy is often employed if the product is considered a luxury. The first P is product. Your product has to be unique, or at least you have to market it as such. Attempting to sell a product as something it is not will lead to a tainting of your brand. Brand identity is what sets a company and/or product apart from everyone else. A company can use many different tools to express brand identity. These tools are traditionally referred to as the marketing mix, which is also referred to as the 4 P's. An understanding of the target market is crucial for building brand identity. Everything your company does should revolve around your brand identity.
4. Strategies for Improving Your Branding
5. The ROI of Investing in Strong Branding
Keep in mind that improving your all-important brand will be a time-consuming matter that will take the full attention of the whole company. Branding is a complete mindset. It's not just a new logo, new name, or new web design. These are only the tools of the brand. In order to affect real change, you must not think of the brand as a tactical investment, but as a central organizing principle: a mission at the very core of the company that informs every decision and action. Therefore, the more radical the change, the more thorough it will need to be and the more time it will consume. If you believe that your business does not have the resources to give the brand the focus it deserves, it may be a good idea to consult an expert in branding who will be able to give the objectivity, time, and dedication that the process requires. The cost will vary greatly depending on who and where you look, but it is an investment that will pay dividends in the long run.
A strong brand can allow a company to charge more for the same product. Observe these mobile phones. Although basically the same, the branded phone has an image and reputation to it. It's better. Would you say a luxury Mercedes is simply for getting from A to B? People very often spend money on things because of what the brand represents. A strong brand creates this image and provides an assurance of the product; it's a seal of quality. "45% of consumers agreed that they would pay more for a mobile phone from a brand they liked." The high end of branded mobile phone sales will generally be more than their non-branded counterpart, but one example you might find surprising is that of cleaning products. When a new product was designed by the Method Company, it was decided that this product should be marketed as a premium product. A new brand 'Minimal' was developed, changing "clean" into the culturally more aspirational 'minimal'. A study conducted found that participants were willing to pay up to 110% more for the product just because they thought it was a higher-quality brand.
A strong brand often ensures future business. When customers are satisfied with your products or services, they are likely to come back. If your brand instills trust, and if their experience was good, they are likely to return without hesitation. 82% of companies questioned agreed that the strongest impetus for brand development was a need to engage more effectively with their target audience. Particularly for the arts and non-profit sectors, building a strong brand can ensure continued survival with access to funding and a share of the increasingly competitive audience market.
When you've got to see beyond the bottom line, the rationale for the investment in strong branding is compelling. For the goods and services you provide, your brand is the promise that you make to your consumer. It is derived from who you are, who you want to be, and who people perceive you to be. Your brand will influence the product or service, and in many ways, becoming a product or service in itself. And your idea is to make something exclusive, let the brand reflect this. So what is the return on investment for this activity, and is it more than just a talk about what color to make a logo?
References:
Wedel, Michel, Enrique Bigné, and Jie Zhang. "Virtual and augmented reality: Advancing research in consumer marketing." International Journal of Research in Marketing 37.3 (2020): 443-465. google.com
