Regardless of the “new circumstances” that are current in 2020, frankly, it has never been easy to stand out in a sea of similar products and services in particular industries.
Whether you want to build a relationship on trust with your clients and partners in your city, state or even further away, you need to think about in what direction you want to build your brand. In what way do you want your brand to be represented, what values and culture will your brand support, should the expansion of the range be done by expanding the brand line, co-branding or introducing a new brand?
The following article tackles these and other questions, which can be helpful when you are creating a branding strategy for your business. But keep in mind that brand building is a time-consuming process and requires team work.
What exactly is branding and what is the significance of the brand?
The American Marketing Association (AMA) explains brand as “a name, term, sign symbol, design, or a combination of all these, with the intent of identifying the goods or services of one seller or group of sellers and differentiating them from competitors’ goods and services”.
Philip Kotler, who is called the ‘father of modern marketing”, says that the brand is in fact “the sellers promise that the he will consistently supply the consumer with a specific set of characteristics, benefits and services”. Namely, the brand represents a kind of guarantee of the manufacturer that it will offer stakeholders a product of the quality and properties they expect.
We are aware of the fact that branding seeks to attract consumers to buy the product. The consumer makes the purchase decision based on the positioning of the product and its name (brand) in his consciousness. Because, when the consumer already intends to buy a product of a certain brand before going to the store, faces the offer of other products and made the purchase itself, then we can say that the marketing function has successfully built the brand.
Today, more than ever, marketing requires a detailed knowledge and understanding of human needs, desires and actions. In an age of information bombardment from all sides, a brand needs to be offered in the form of simplified messages and advertisements, and the success of a product or service depends on the perception of potential consumers and users. It is no longer enough to have the best and highest quality product, the best price, the best distribution network and top promotion, the most important thing is how much and what the average consumer on the street knows and thinks about your product.
Classical marketing theory has gravitated around the so-called 4 P’s. When creating marketing strategies, the key ones were: product, price, place and promotion. Unfortunately, until recently, few people cared or thought about the consumer or the user of services. In a new economy, the consumer is everything, while his perception of a product or service is what will decide a decline or success in the market. Certainly, the 4 P’s still had the importance they had before, but today the position in consumer consciousness is the deciding factor of success. In the new economy, a good position is more valuable than all the other factors in business. It is said that the value of the brand “Coca Cola” is about 84 billion dollars, and we are only talking about the name, since this does not include all the other things which make this multinational brand.
Each brand has several dimensions, and Kotler lists the following characteristics, which you can be guided by.
The basic meanings of the brand that characterize it are:
Characteristics – They represent certain values or ideas about the characteristics of the product (e.g., the car brand “Mercedes” sublimates the characteristics: expensive, high quality, durable, safe, prestigious, etc.).
Uses – They can be rational (“Mercedes” is known for quality and reliability) or irrational (“If I drive a “Mercedes” I will be respected by my environment”), which spark the customers interest.
Culture – For example, “Mercedes” represents a German culture characterized by efficiency, quality, organization.
Users – The brand determines the type of consumer (“Mercedes” is not driven by young people).
Personality – A brand projects a certain person (“Mercedes” is driven by successful and ambitious people)
As characteristics can be copied from other manufacturers, the most important are culture and personality.
Value resp. “Brand equity” is something “intangible” and “invisible” that adds production and services and time increases the value of the company itself. The basic components of brand value are: recognizability or awareness, understanding of quality, associativity and brand loyalty evoked by consumers.
Brand identification includes under what name you want to place your products. The producer can choose between:
– the branding of individual goods, if the company wants to give every product an individual name (e.g. ,,Procter & Gamble” ,,Pampers” or ,,Ivory”) ;
– the branding of a range of products, this includes special brands which offer product ranges (e.g. ,,SEIKO” has a range / collection of lower quality watches called ,,Pulsar”) ;
– cooperative brands, when a company places all products under its name (e.g. ,,IMB”, ,, General Electric”).
A brand can be business (represents the differentiation of a company) and production (distinguishes one specific product of all others). This can be explained through a brand strategy that has several directions in which can move:
– Expansion of the brand line exists when a company introduces new products, with new features, under the sameby name. In addition to the advantages, in the sense that the new product relies on an established name, it can be confusing. For example, when we order Starbucks coffee, we have to specify which taste we want, if we want it with or without whipped cream, a larger or smaller cup, with or without sugar, etc.
– Vertical brand expansion is a situation when a new brand is created for a special assortment. For example “Telenor Serbia” has a brand “Go Smart”, intended for children. In this way the brand is positioned according to the needs, interests and payment possibilities of consumers.
– Brand expansion occurs when a company uses an existing brand to launch a product different categories, such as “Samsung” TVs, phones, cameras, but also air conditioners, washing machines, vacuum cleaners. Although the biggest advantage is the use of an already established name, there is also a risk from diluting the brand, when in the minds of consumers the name no longer carries the specifics of a particular product.
– A company applies a new brand when it is not suitable for it to place a new product on the market, with new features, under the old brand. That is how the company should act if “Crnagoracoop”, for example, decides to offer cosmetic products to the market.
– Co-branding includes the merging of brands and their joint appearance on the market, which will strengthen the position of both. There is a well-known case of joint performance of “General electric – Hitachi” light bulb.
– Licensing is the rental of the name of an existing and accepted brand. That way the company will, instead of developing and building its brand, simply “rent” an already popular name under it sell your products. Cosmetic and perfumery products often bear the names of celebrities, so we have “David Beckham” or “Kylie Minogue” perfume.
Vision is the most important factor for long-term success of a brand. The brand also has its own life cycle, a company needs to learn how to steer its brand in the direction in which it would move the consumers emotions. The “smell” of a new car is not accidental, because in every factory they know which spray is needed for the new car smell. Also, all “Singapore Airlines” flight attendants use the same perfume, which is used only by those. The sound of the Mercedes door closing is different from any other car door closing sound. Like the sound messages on a “Samsung” phone, the shape of a “Toblerone” chocolate or a “Voda-Voda” bottle. All these differences were noticeable even 50 or 100 years ago, but it was not until the beginning of the 21st century that they began to be taken more seriously.
By stimulating the senses and intertwining emotions, brands strive to build a quasi-religion. “Apple” has already succeeded in that, with a large number of users for whom their products are “lifestyle religion”.