Why is building a brand so important to the success of your company? Let’s take a look at one of the best brands in the world Coca Cola, the total market value of the company is around $175 billion. But one asset, in particular, makes up about $75 billion of that. And It’s not the secret recipe, it’s the brand’s assets, as they are both a strategic as well as a financial asset. Brand creates and builds loyalty.
A strong brand creates customer loyalty, and that increases the value of your company value which can grow if you continue to invest in the brand. To create this loyalty you need to build your brand in a strategic way. This means it is important to also understand consumer psychology and their attitudes and how they effect their decision making (see our article about consumer attitudes). There are many other benefits of building brands. Brands allow you to set higher prices for your products and services for example. People associate higher quality to branded products, and they’ll pay more than for a generic version, even when the two products are identical because they trust the branded product more when brands make and keep their promises. Once your product is branded, you typically earn a higher market share while lowering your cost of sales.
Loyal customers don’t need to be marketed to as much. With an established brand, it’s easier to launch new products. When consumers see the brand’s logo on a new product, they instantly associate the brand promise to that new product from day one. There are other benefits of building brands than just marketing advantages. For example, studies show that companies with great brands have lower employee turnover. popular brands help companies recruit the most talented and passionate employees. (see our article about consumer behaviour)
Brands create status and esteem for your company in the minds of industry leaders, community leaders, the media, and financial markets like Wall Street. But Despite all these benefits, it may not make sense for you to build a brand. There were certain business situations where it would be a waste of money. For example, in completely new markets, where there are very few if any customers, you’d be smarter to invest your resources in growing awareness and interest in the category first.
If you’re already the market leader with most of the market share, creating a brand probably won’t pay off. Being in a highly fragmented industry with hundreds or even thousands of small competitors, a brand may not be able to reach enough customers to make it worthwhile. If your business is such that you have only a handful of customers, perhaps even one customer like the government, branding won’t do much. So, take a look at your situation before you jump right into building a brand. But if your business depends on creating loyal repeat customers, a strong brand is the surest way to do it.
The branding process has five steps.
A brand is a promise. So, we have to clearly define what that promises and the core values behind it. Think of the values as the DNA of the brand and how we build a brand. At this step, we also define how the brand links to your overall business and other brands that you may have. brands don’t exist in isolation. So we have to give them a home. We go into more depth about this topic in the “How to Determine Brand’s Values” article.
In your portfolio, we have to define what are called “brand drivers”. Brand drivers define how the core values will be manifested into the marketing mix are key business processes that support the brand. Everything associated with the brand helps you translate its value into actions.
Essentially, we are shaping how customers. Think about when you build a brand. We identify who those customers are, what benefits they seek from your products and services, and what they currently believe about those products and services versus the competition. At this step, we’re making the direct link between the products value proposition and the brand promise. (see our extensive guide to brand positioning)
Once you define the brand promise and how it’s positioned in the marketplace, you need to express the brand. Imagine the brand as a person. A person needs a name, a personality, and an identity in terms of what they look like. You do the same for brands. At this step, we create brand names and logos to help customers easily recognize the brand and remember the promise that it delivers. (see more about brand identity design and how it helps you achieve this)
At this stage, it’s time to build awareness of the brand and make it work for you. We do that by communicating it. And we do that both internally to our own organization, as well as externally to the market. Why internally? Well, your employees and distributors play a critical role and delivering the promise. They create and deliver products and services that deliver benefits that customers expect. Keeping a brand strong means we have to communicate continuously, and most importantly, consistently to reinforce the promise in people’s minds. If you don’t, brands lose their value. That leads us to the final step of the brand building process measure. You want to measure the value of the brand, or what we call brand equity. It’s what you accrue when you develop, promote and deliver an authentic brand promise. As brand equity increases, company value increases.
Do you measure the brand’s performance? Is it living up to the promise? And is it doing what you expect it to do for your business? The brand building process takes time and money. But if you do it right, you’ll create strong, healthy brands that make your business more successful.
This article we will guide you how to position eco-friendly brands. There will be practical advice and examples for strategizing and planning marketing moves
The Consumer Decision Process model (CPD model) is the process a consumer goes through when making a purchase decision. The CDP model serves as a road-map.