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Importance of Branding: What's in a Name?
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by:
William King
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Branding
is perhaps the most important facet of any business--beyond product,
distribution, pricing, or location. A company's brand is its definition
in the world, the name that identifies it to itself and the
marketplace. A model may be beautiful, but without a name, she's just
"that girl in that picture." Where would Norma Jean be without Marilyn
Monroe, or who would imagine Coca-Cola as just a soft-drink
manufacturer? A brand provides a concrete descriptor to customers and
competitors alike, a name for a product or service to distinguish it
from anything else. Bob may run a hobby shop, but trying to advertise
as "The hobby shop a guy named Bob runs down the street a ways" is
financial suicide. Each customer will have to describe the shop, who
Bob is, and what the shop does every time someone asks about it. This
makes the process of recommending a good hobby shop too much work for
the average customer, and far too much work for a user looking for
hobby shops on the Internet. A customer looking up Bob's hobby shop
will have an easier time of it if he or she knows to refer to it as
"Bob's House of Hobbies," and the customer can then refer others to
Bob's hobby shop by name, increasing the potential advertising
exponentially.
Developing a brand involves more than just picking a catchy name and
placing an ad in the newspaper--a brand is more than a unique string of
letters denoting a particular product; a successful brand is a mnemonic
trigger that makes a consumer feel a certain way when the brand is
thought of. For those who drink cola-flavored soft drinks, which is
more appealing on a hot day: a cold cola soda, or an ice-cold Coke?
Coca-Cola has spent 100 years developing their particular brand of
cola-flavored soda as a refreshing beverage and a seminal
representation of a market segment. Coca-Cola has used a combination of
direct marketing, give-away techniques, and multi-product
cross-branding to achieve maximum brand recognition and visibility in
not only its immediately competitive market, but in markets as diverse
as Coca-Cola branded race cars and housewares.
Brand loyalty is an integral part of building a brand, as consumers
usually have a choice of products in the same market segment, and so a
successful company will come up with a way to keep consumers re-buying
their product or coming back to their location rather than going to a
competitor. These brand loyalty-building efforts may come in the form
of coupons, incentives such as many grocery chains' technique of
"grocery discount cards" or "loss leaders," meant to draw consumers
into the store, where they will hopefully buy products along with the
discounted fare at a higher profit ratio. In exchange for these
discounts and grocery cards, many companies collect information about
buying habits and average spending amounts, the better to tailor
advertisements and better-focus future promotional efforts. Once a
consumer is hooked, brand loyalty tends to result in higher sales
volume, as well as loyal customers being less sensitive to price
changes of their favorite brands (within reason, of course), as well as
less sensitive to competitors' incentives. Studies have shown that it
takes 5 times as much money to gain a customer as it does to retain
one. That's 5 times as much money as could have been spent on other
things.
A brand is who your company is, and what it is selling--it is as
important as naming a baby, and should require the same amount of
effort to develop it, but if done well, can mature into a successful
and profitable adult.
© 2005, Wholesale Pages UK. All rights reserved.
About the Author
William King is the director of All Wholesale UK,
Wholesale
Pages and Wholesale-Canada.
He has 18 years of experience in the marketing and trading industries
and has
been helping retailers and startups with their product sourcing,
promotion, marketing and supply chain requirements.
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