Business and Product Branding

Business and Product Branding

Competition is becoming severe day by day and therefore beating the rival by winning over the customer’s heart and mind has become crucial. The companies have also realized that one of the most valuable assets of their company is the brand name that is associated to their product and services. Thus the most important development after 1980 has been the realisation among the managers that established brand could represent a certain value for the company. (Book: – Brand management pg 8).

Branding has to be one of the most overused and misused terms in marketing communications today. Just as “marketing” is often used euphemistically to mean “sales” or “advertising,” “branding” seems to have a different definition to almost every person. A brand is usually referred as a name, sign or symbol used to identify items or services of the seller(s) and to differentiate them from goods of competitor. Though brand seems to be a simple aspect of marketing; but it’s a lot more complicated term.

Bank of Little Rock Mortgage

Therefore it could be said that “Branding is ultimately about securing the future of the company, its products and services by building loyalties using emotional as well as rationale values. Such values matter not only because they are exchanged for cash in the market place but the perception of company’s product and services are also affected by it.

(Pg 1 book brand warrior by Fiona Gilmore).

Therefore understanding and nurturing the brand plays an important role.

What is a brand?

Too often even marketing professionals don’t have an answer, and too many have their ‘own’ answer. Signs and symbols are part of what a brand is, but to us this is a very incomplete definition.

The Dictionary of Business and Management defines a brand as:

“A name, sign or symbol used to identify items or services of the seller(s) and to differentiate them from goods of competitors.”

According to the American Marketing Association (AMA), a brand is a

“name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors” (Building, Measuring and Managing Brand Equity, 3rd Edition, Kevin Lane Keller)

In Principles of marketing by Philip Kotler and Gary Armstrong a brand is defined as

‘A name, term, sign symbol or a combination of these, that identifies the maker or seller of the product.

http://en.mimi.hu/marketingweb/brand.ht

A brand usually communicates specific information about an organization, product or service, distinguishing it from others in the marketplace. A brand carries a “promise”: a promise regarding the qualities and particularities that make the organization, product or service special and unique.

It is rightly said that “consumer is the king of the market”. As a result anything that is produced by the company should be for the consumer and as per the consumer’s needs. Thus creation of a successful brand is not an easy task but it requires the combination of various aspects collectively in an exclusive way. These aspects include the following things such as:

• High quality and appropriate product and services as per the consumers needs and demands.
• Attractive brand name as per the consumer’s perception of the product.
• Packaging, promotion, pricing and all other elements must similarly meet the tests of appropriateness, appeal and differentiation.

(Book strategic brand management pg 5)

Brand plays an important role not only for the company but also for the consumers.

The consumers realized the advantage of buying a brand and consuming it will provide them the satisfaction and value for their money and they will continue to buy it. They also put forward their trust and loyalty. It is also easy for the consumers to make their buying decision once they know which brands satisfy their needs. Brand also plays a significant role in indicating certain product characteristic to consumers. They also take on unique, personal meaning to consumers that facilitate their day to day activities and enrich their lives. (Book strategic brand management pg 8, 9).

As per the company’s point brand provides a number of valuable role for the company. They create a competitive advantage for the company with their product performance. They also help the company to reduce the switching cost of the consumers as the consumers become loyal to a particular brand. A brand is a product then, but that adds other dimensions to differentiate it in some way from other products designed to satisfy the same need. (Book strategic brand management pg 4). Therefore it can be said that the brand is the end result. It helps the company to built and maintain its image in the mind and the heart of the customers. It is like a tangible as well as intangible asset of the company which also some time helps in managing the company’s future. A successful brand is not simply a product that has been launched to great press, strong sales, and customer satisfaction although all those things are certainly desirable. Strong, enduring brands are built with the concept of brand loyalty in mind of the customers.

Brand is vital for the business because they establish meaningful connection between manufactures and their customers as well as employers and employee. Brand has become valuable asset owing to their manifestation of these relationships. If successful, their ability to built trust and loyalty will result in the consumer selecting a particular brand then continuing to choose it. (Book brand vision and values pg 17)

What is Brand loyalty?

A successful brand is not simply a product that has been launched to great press, strong sales, and customer satisfaction, although all those things a certainly desirable. Strong, enduring brands are built with the concept of brand loyalty in mind-the idea that consumers will develop a bond with the brand that will strengthen over a period of time and will make changing to another brand feel like betrayal of trust. (A branded world M. Levis, pg194)

Oliver defines loyalty as “a deeply held commitment to re-buy or re-patronize a preferred product or services in future despite situational influences and marketing efforts having the potential to cause switching behaviour” (Marketing management kotler pg 294)

The American marketing association defines brand loyalty as “the situation in which a consumer generally buys the same manufacturer originated product or service repeatedly over time rather than buying from multiple suppliers within the category” or “the degree to which a consumer consistently purchase the same brand within a product class”.

Brand loyalty is the ultimate goal that the company sets for a product. It is the desired goal of all businesses to create brand loyalty from members of their target markets. Once it has been created within the consumers they stick to the same product. It is more difficult to persuade customers to switch to an alternative brand. Some consumers will only purchase the same product, nothing else will do. Thus brand loyalty is built through series of circumstances, such as longevity and reliability of the product, but even more through the satisfactory execution of customer experience. (Pg 198 book a branded world)

Brand Loyalty is the consumer’s conscious or unconscious decision, expressed through intention to repurchase a brand constantly. It occurs because the consumer perceives that the brand offers the right product features, image, or level of quality at the right price. Consumer behaviour is habitual because habits are safe and familiar. In order to create brand loyalty, advertisers must break consumer habits, help them acquire new habits, and reinforce those habits by reminding consumers of the value of their purchase and encourage them to continue purchasing those products in the future. http://www.essortment.com/all/brandloyalty_pqk.htm

Loyalty for a brand from customer’s view-point may differ. As a result a market can be segmented by customer-loyalty patterns. This is usually done with respect to the customers and their degree of loyalty to their brand.

http://smib.vuw.ac.nz:8081/www/ANZMAC2000/CDsite/papers/e/Ea.PDF

Brand loyalty is a fundamental part of building a brand, as consumers generally 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.

Today’s and tomorrow’s customers are a great deal different from the consumers and business to business purchasers had been used to. Globalisation is changing things so, is the advance of technology, the internet in particular. Customers are on the internet and they travel the world without leaving their homes and offices. Their needs and wants, opinions and beliefs, are crossing borders and challenging cultures with speed and power. As they are on web they are global and are accessible to all websites and branding messages delivered via internet. In such circumstances the goal of the companies is to keep the customers coming back. Customer Loyalty, domestic or global, doesn’t develop overnight. Nor it’s won through ‘attitude’ or extravagant promises, flashy images or gimmicky design. Loyalty is developed through a succession of positive experiences customers have with brand. To your customers, each experience should be satisfying and reassuring. Even more important, each experience should build momentum in customer’s minds, reinforcing your brand as their preferred choice. As experiences accumulate and expectations develop, your brand makes the implicit promise to perform successfully against those expectations.

(Branding across borders J. Gregory page 97)

The three main reasons why brand loyalty is important are as follows.

• Higher sales volume: through reducing customer loss.
• Premium pricing ability: as loyal customers are less sensitive to price change, generally, they are willing to pay more for their preferred brand.
• Lower cost for advertising, marketing and distribution: Brand loyalists are willing to search for their favourite brands are less sensitive to competitive promotions.

http://www.12manage.com/description_brand_loyalty.html

http://www.extension.iastate.edu/AgDM/wholefarm/pdf/c5-54.pdf

Factors responsible for customer decision making:

Marketers who study consumer behaviour are ultimately interested in one central question: How are consumer choices made? Various environmental such as social class, income, family and individual factors are responsible customer in Decision-making. (Zikmund, 1998)

Customer Loyalty

Customer loyalty plays an important role in the performance of any company. Thus retaining the customer is often more profitable then finding one. As customer loyalty has become a buzzword in companies today but the most essential thing is to maintain that loyalty. Loyalty schemes should be highly focused and should build on strong customer relationship in order to achieve 100% customer satisfaction. (Customer loyalty is really important pg 2 last Para). Customer loyalty does not happen overnight. It does not happen with a single phone call or a simple piece of direct mail, or a groovy websites. Customer loyalty begins with trust. (Customer management versus customer loyalty pg 1)

Maya Angelou, Poet and Author has rightly said “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” http://www.pierce.ctc.edu/conted/business/email/images/classPDFs/aglobal/Four%20Keys%20to%20Customer%20Loyalty.pdf

Customers have choices. There are very rare products and services that are different or unique that an organization is not threatened by competitive pressures. What causes a customer to choose one product or service over another is the way they feel about the product and how they feel they are treated by the organization. This is particularly evident in the demand today for stellar service and its impact on building customer loyalty.

A very essential pattern of loyal customers are that they demonstrate their loyalty through certain behaviours that benefits the organisation. These can be explained with the help of 4 R’s:

• Retention: customers who are loyal to an organisation provide a solid base for success. Though retention of a customer is hard, but it’s a far better than finding new customers.
• Referrals: loyal customers encourage others to opt for their company or organisation. This in turn reduces the cost to acquire new customers. Word of mouth is very powerful, and it influences many people.
• Reputations: Loyal customers speak well of you. They increase public support and positive interest from investors, suppliers, future employees, the media, and even regulatory bodies.
• Revenue: Loyal customers give you a larger share of their business, which increases overall revenue and the recognition that comes with success. Cross-selling and up-selling to existing customers is the primary growth strategy for many organizations and is particularly lucrative with loyal customers. (Previous Web)

A first approach of classifying consumers considering their degree of loyalty is that of George H. brown according to whom buyers can be divided into four groups:

• Hard core loyal- always buy the same product
• Split loyal- loyal to two or three brands
• Shifting loyal – loyal to one brand for a period of time, but easily shifting from one brand to another, due to certain advantages offered by the new brand.
• Switchers – show no loyalty to any brand, switching the brand with almost any buying situation.

Brand Loyalty as a strategy.

Loyal customers can be and should be the foundation for marketing strategy. Beyond the profit they generate, loyal customers provide the basis for brand development and improvement. The brand that loses sight of its loyal customers has lost its direction, and is prone to lose its market share. As a brand’s percentage of loyal customers goes up, market share increases and the brand becomes more profitable. Share rises because those customers who become repeat purchasers are no longer lost to the competition. In addition, loyal customers are more profitable than new customers – attracting new customers involves investing far more marketing and promotional funds.

When a consumer develops loyalty towards a brand he/she develops a favourable attitude towards the brand resulting in commitment. Brand loyalty offers a number of advantages to the marketer.