Now a day, the companies have recognized the importance of branding as an important key to success. This assignment is aims to analyse the importance of branding and its role in ensuring success in business. The scope of assignment covers the introduction to the brand, need of branding, key concepts in branding, importance of branding, brand architecture and role of branding for creating value. The exploratory studies include the both business to business (B2B) and business to consumer (B2C) markets. The research is based upon secondary data, collected from secondary sources such as journal articles, scholarly reviews, books and websites. In the end, a conclusion has been presented, based upon the research findings along with recommendations.
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The American Marketing Association (AMA) defines the brand as, “a design, name, symbol, term, logo or symbol or combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”. The branding is, “endowing products and services with the power of a brand” (Kotler and Keller, 2009, p241). The Malhotra (2012) defines the branding as, “process of utilizing marketing strategies to enhance their products or service’s image so that it is more readily recollected by the customer”. A product or service is called brand only when its dimensions differentiate from others, but satisfy the same need. The point of difference can be related to products performance (functional, tangible and rational) or related to the image/abstract of brand (intangible, emotional or symbolic).
The success of branding strategy of a company is mainly dependent on its brand planning, consists of branding models. The Keller (2009, p2) presents two important models for building brand.
(a) Brand Positioning Model: The focus of the brand positioning model is to establish the competitive advantage in the minds of customers. It’s all about positioning brand better than others. The competitive positioning can be developed through four steps.
Competitive Framework of Reference: identify the competitors and the nature of competition in the market.
Creating Point of Difference (POD): identify the attributes and features, different from competitor’s products.
Creating Point of Parity (POP): Identify the attributes and features, similar to the competitor’s products.
Creating Brand Mantra: A core promise or brand essence, three to five word phrases, presents the spirit of the brand. Like Nokia “Connecting People”, TESCO, “every little help”, Sony Ericson “Finger Talk”, McDonald “I M loving it” (Gangal, 2011); (TESCO-Strategy, 2012).
(b) Brand Resonance Model: The brand resonance model focuses creating intense and loyal relationships with customers. The key components of this model are following (Appendix 1) (Keller, 2009); these four steps are also guided by brand pyramid (six building blocks) consist of brand salience, brand meaning, brand response, brand judgement, brand feeling and brand resonance, which help in connoting the sequence.
Brand identity: Describe “who are you?” Through brand awareness.
Brand Meaning: Describe “what are you”? Through defining POP & POD.
Brand Response: Describe “what about you”? Through positive actions.
Brand Relationships: Describe “what about you and me”? Through loyalty.
1.1 Need of Branding:
The marketers engage in creating brand and promoting brands due to many reasons, because they understand the significance of branding into their business. The different authors / researchers presents the different reasons (motives), behind making their brands. The Kotler and Keller (2009, p241) and CMS (2011) indicates towards differentiating motive as a major reason of branding. The marketers are engaged in branding, because they want to make their products different than other branded and non-branded products, so that the consumer can easily identify their brand, otherwise, without branding, the consumer cannot identify the products of a particular seller (brand).
The Malhotra (2012) presents the reason behind branding is to enhance the image of a product that can be recalled by customers. When consumers are having high image of product in their minds, they can easily recognize the brand among other brands. A chocolate lover can easily recognize “KitKat Chocolate” as it is his favourite chocolate brand and he is having high image in its mind, so he would be only KitKat chocolate among other chocolate brands. The ultimate impact of high brand image results in higher sales and higher customer loyalty.
The Foster (2011); Hankinson (2012, p974) states that the branding plays vital role in the success of business. When a company does create brands of its products and services, it enjoys many benefits such as, (a) branding differentiates the company’s products from other products. (b) branding provides the company with communication ways in order to communicate the messages, principles, values and characteristics of products to customers. (c) Branding builds the report of company in the market, as new products with good quality and reasonable quality are best known in the market. (d) Branding is an effective way of developing the loyalty of customers. (e) Once the brand is established, the companies also feel ease to launch a new brand or product under its established brands. (f) Strong brands also help the company in difficult times or at the time of crises. (g) branding helps the company’s in winning the purchase decisions of customers. (h) branding increases the branding recall among customer and ends up with strong customer loyalty.
1.2 Key Concepts of Branding:
The key concepts of branding are the pillars, which help the companies to promote their brands towards their target customers.
(a) Brand Positioning: Branding positioning is all about placing an image of the brand in the minds of customers. The Keller (2009, p6) describes the positioning as, “act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market”.
(c) Brand Attributes: The brand attributes are bundle of features and characteristics which highlights personality aspects of brand (Managementstudyguide.com, 2009). The brand attributes are developed through actions, images and advertising.
(c) Brand Elements: The brand elements are components, which creates the identity of brands such as name, slogan, colour, characters, symbol, sound, jingle, shape, graphic, tastes and movements etc. (Kerr, 2012). For example, the symbol of Honda (H), slogan of TESCO “every little helps”, character of KFC “KFC + old man”, the yellow colour of McDonald’s (M) and jingle of Nokia (Tune) etc. are the examples of brand elements, which creates the brand.
(d) Brand Personality: The personality of brand is, “sum total of characteristics of the organization or its culture, which reflects the organization’s philosophy and mission (brandXpress.net, 2008).
(e) Unique Selling Propositions (USP): The effectiveness of branding strategy can be enhanced through better identification and highlighting the USPs. The USP’s are the key characteristics and factors, which presents that the company’s product is better than competitor’s products (Kerr, 2012).
(f) Brand Image: The brand image is basically “customer’s set of beliefs about a specific brand” (Managementstudyguide.com, 2009). The image of a brand is built up with the core association about brand in the mind of customers.
(g) Emotional Branding: The emotional branding is “consumer’s attachment to a specific, relevant and strong emotion (bonding), love or companionship to the brand” (Rossiter and Bellman, 2012, p291). The focus of companies is to gain the emotional attachment of people, because when people are emotionally attached to a brand, it creates attitudinal loyalty that is beyond of behavioural loyalty. The emotional branding is effective for those products, which seeks the high involvement of people and positively motivated. The traditional advertising (based upon USPs) is also much effective for creating emotional attachment, but the impact of customer’s positive experience of products is effective in highly competitive dynamic & environment.
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(h) Internal Branding: Due to the paradigm shift from product to services, a need of internal branding has been increased rapidly. There people actually deliver the services to final customers, so their role is vital in service delivery. They can deliver the service only when they truly understand the brand identity, commitments, values and elements, which can be communicated to internal employees through internal branding (Patla and Pandit, 2012, p115). The effectiveness of internal branding can be measured through employee complaints and feedbacks. Further, employee’s emotional attachment and lesser communication gap also enhance the efficiency of internal branding (François-Gagne, 2012).
1.3 Importance of Branding:
The most distinctive capability of marketing managers is to create, maintain, enhance and protect the brands, because they know the importance of branding for their business. It is said that the great brands, such as Nike, Sony, Mercedes etc. are not accidently become great, but they are the result of planned and thoughtful branding strategies (Keller, 2009). The important aspect of branding is that it enables the companies to launch their own brands and also protect their brand through registering copyrights (Kotler and Keller, 2009, p242). The high street clothing brands such as Next, Nike, Levis and Wallis etc. are running their own branded products through registering their own brands, which not only differentiate them from market competitors but also protect their brands from the copy. The big retailers such as TESCO, Sainsbury’s, Morrison’s and Primark etc. have also launched their private label brands, which helped the companies establish their own brands in competition and their brands and trade market are registered, so its protection for them due to branding.
According to CMS (2011), branding also supports the advertising strategy of a company, because when people are quite familiar with the brand name, colour, logo, symbol or any other brand element, then people, when they see advertised, feels their emotional attachment and feelings for the brand. In addition, if the people are having a good branding experience, then a high level of attachment will be formed and it will take the customers towards buying decisions and remain loyal.
The key aspect of a brand is that, an effective branding strategy does not work for a sole brand but also works for the entire company’s brand. The Kerr (2012) states that an effective branding increases the sales, but the impact of effective branding is not limited to the one brand or service, but all other brands receive the impact, associated with a particular brand. An effective branding of Apply iPhone 4 is not only promotes the brand equity of Apple and promotion of iPhone 4, but also promotes the other iPhone models and products of Apple.
The Ashton and Pressey (2011, p1027) claim the branding reduces the competition. This concept is similar to the differentiation strategy, opposite of cost leadership strategy. A company that is facing high competition from its competitor can avoid the competition through differentiating its products from others with the help of branding. There are many examples about avoiding competition from branding. The Mercedes is a brand of automobiles, but it positioned itself as premium and luxury brand, bring out itself out from competition of regular car brands. TESCO belongs to the retail industry, but it positioned itself as wholesaler or cheaper product brand. Redbull belongs to the beverage industry, but it positioned itself as energy drink” and separated itself from other beverage brands. This is how branding differentiates the products from the competition. The red action and blue ocean strategy also help the companies to avoid from competition (Appendix 2) (Kim and Mauborgne, 2010).
The key responsibility of brands is to create value for their stakeholders. According to Kotler and Keller (2009, p242), the branding works for both consumers and companies. For consumers, brandings help them in identifying their favourite brands, because when brands are identical, consumer can easily recognize them. It also helps the consumers to identify the brands, based upon the experience, which brands satisfy their needs and which don’t. Consumers are also saving from risks of buying such products, which are not giving them the true value of money. In the modern world, in which consumers are time starved, complicated and more rushed, so branding makes their lives easy with decision making and reducing risk.
From the perspective of the firm, the key form of the value of a company is “monetary benefits” that means branding increases the returns on investment for their company’s stakeholders through increasing sales. Further, brands also provide other benefits to companies. Branding simplifies the product tracing, product handling, maintaining accounting records, organizing inventory, legal protection and predicting demand for a particular product. Nestle UK & Ireland is dealing in many brands across the UK, so branding of Nestle provides the company to differentiate its products from other company’s products. The in-house facilities include locating the product, handling inventory and maintaining records of products (Kotler and Keller, 2009).
Apart from internal attribute characteristics, brand elements and associations the branding strategy also leverages the brand equity from secondary sources such as Things (third party endorsements, events, causes), places (channels, country of origin), People (employee, celebrities, endorsements) and other sources (company, alliances, ingredients and extensions) (Appendix 4). The brand uses the foreign brand names, language and country of origin (Coo) in order to enhance brand equity of their product (Melnyk, Klein and V-lckner, 2012, p21); (Herstein, 2012, p147).
The branding creates the value for its stakeholders through increasing sales, profitability and return on investment. When a strong brand is successful in achieving loyalty (both behavioural and attitudinal), then customers make repeat purchase and also recommends its fellows and friends to buy from the particular company (called positive word of mouth and referral group impact) (Kapferer, 2008, p20). Further, the strong brand can easily charge higher from their loyal customers, so using the premium pricing strategy for strong brand is an easy and strong brand also makes the customers less elastic to price increase (Kotler and Keller, 2009, p244). In short, from a financial perspective, the strong brands can get higher returns on investments.
1.5 Role of Brand Architecture:
The brand architecture represents the structure of brands in an organization. Brand architecture basically sets of all components of the brand, like brand’s visual requirements, operational requirements, story, promises, meaning and personality traits, under a single unified structure (Moderandi Inc, 2006). In brand architecture, the corporate brands or umbrella brands (overreaching brand, top brand) are used across the products in the company such as; Virgin Train, Virgin Cola, Virgin Mobiles and Virgin airlines etc. Brand architecture can be unitary (one company name for all brands: Virgins), hybrid (sub-brands work individually but linked with company brand: Nestle SA), and diversified (brands are marketed individually: Yams Food (Pizza Hut, KFC) & Pepsi Brands) (MarketingforWAHM.com, 2012, p260). There are several benefits of advantage of brand architecture (Verma, 2009); (Kotler and Keller, 2009); (KENNEDY and McCOLL, 2012); (a) the company can easily manage the products across family brands. (b) The consumers can easily recognize the brands as part of their favourite brand. (c) It develops understanding about brands, how brands are related to specific portfolio and how they are different from each others. (d) It also reflects that how sub-brands along with corporate brand support the core purpose of the overall corporate brand. (d) It helps to develop new brand elements for new products. (e) It can help to assess performance of corporate brand, family brand and sub-brands individually. The characteristics of brand architecture, simplicity, no more than two levels, flexibility and proper arrangement of brands improves the performance of brand architecture (Daye, 2009).
1.6 Branding for Business to Business (B2B) markets:
The previous discussion on branding and its importance presents the role of branding for business to consumers (B2C) markets. The business to business (B2B) branding is almost same as B2C branding but there are few differences, which indicates towards using slight approach for B2B branding. (a) The corporate brand is more visible in B2B branding than product branding. (b) The B2B target market is smaller than B2C large customer population (selection of advertising strategy is important). (c) The contracts with customers are long term (so pricing and product details are important). (d) The decisions of branding in B2B are more inclined towards functional aspects. (e) B2B buyers are using rational decision making rather than emotional decision making. (f) B2B buyers focus business relationships more than individual sales. (g) B2B buyers are elastic more on price (Brown, 2009); (Miller, 2007). These differences stimulate the marketers to take different approach for branding in business to business markets.
In B2B branding, the companies build their brand equity and achieve competitive advantage through their core brand values. For example, the brand value of Dell is flexibility, Sony is famous due to innovation and IBM is having brand value of quality. So, when buyers (other companies) would like to make purpose decisions, they would focus on key value of company before making buying decision (Hague, 2010). Secondly, the B2B buyers make buying decisions on the basis of product performance, product availability, product price and services (guaranty & warranty), so marketers of B2B markets highlights these particular benefits of their products in advertising rather than focusing on attributes of products. Further they focus on tangible advertising materials such as indoor and outdoor material, one to one marketing, relationship marketing etc. One research findings states brands when personified as a human can be used to manage B2B customer’s relationship with in a B2B network (Gupta, Melewar and Bourlaskis, 2010, p395).
1.7 Implications for Brand Managers:
This section highlights the implications for brand managers, because there are some counter arguments on a few concepts of branding and suggestions for brand managers to understand these keep points in order to correct their focus and ripe the optimal benefits of branding (Malhotra, 2012) (Royston, 2006).
Branding should be simple: The people can remember and recall the brands, which are simple and having positive associations. The complex brand elements and ideas are difficult to remember and recall.
Brandings should be safe: The game of branding should be played safe. Especially in global brand marketing, brand managers must focus on following local culture, customs, norms and legislations that would keep the brand safe from social or legal threats.
Branding should be different: The success of branding is only when it is different from competitors through using innovative strategies and methods as part of branding strategy. It’s all about creating opportunities through telling the customers that you are different than competitors.
A brand is not only a Logo: Although the logo and brand name is an important element of branding (CMS, 2011), but brand is not only the logo.
Brand Loyalty never was telling: The success of branding strategy is not evaluated how good you are doing advertising and promotions in order to tell the people they should trust you, but this trust must be initiated by people by themselves that would reflect the true effect of branding.
Positioning is presence: Now a day, actions speak louder than words. The positioning of brand is not what people feel about your brand, but what you really make them feel about your brand.
The findings of secondary research conclude that the branding is having significant importance for the success of business. The marketers get several advantages of branding such as, greater financial returns, greater loyalty, improved brand perception, larger margins, improved employee performance, opportunities of extensions and licensing, improved communication, less threat from competition and more elastics to price increase and less elastic to a price decrease and overall success of the business. For consumers, the branding helps the customers to select their favourite brand, make buying decisions easily and reduce the risk of buying less valued product against their money. Apart from business to consumer markets, the branding is also very helpful for business to business markets. Brand architecture is good practice of arranging the brand into sequence in accordance with their positions in architecture as corporate brand, sub-brand, line extensions etc. The use of brand architecture is helpful for companies to manage their brands effectively. The implications for brand managers are to understand the true spirit of the brand, develop effective associations and manage the brand across the architecture in order to reap the maximum benefits of architecture.
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