WHAT IS A BRAND?
Although the
term “brand” is sometimes used as a synonym for a “trademark”, in commercial
circles the term “brand” is frequently used in a much wider sense to refer to a
combination of tangible and intangible elements, such as a trademark, design,
logo and trade dress, and the concept, image and reputation which those
elements transmit with respect to specified products and/or services. Some experts consider the goods or services themselves as a component of the brand. This wider, more flexible, definition of “brand” is more useful for our purposes here.
For
any Organization brand value is a must. TATA Name is popular throughout the
World. In Britain
Britannia
comes to our memory for Biscuit.
Maruthi
comes to our memory for Car,
S.B.I.
comes to our memory for Bank,
L.I.C.
comes to our memory for Insurance.
The
common factor to all of them is brand value. The Ruling Government, and the
General public if having Brand value either Directly or Indirectly the
following positives can be obtained. They are,
(i) Business increases.
(ii) Expansion will be easier.
(iii) To function in many Applications will be
easier,
(iv) Demand of stocks will be present
anytime,……etc..
Can
be said continuously. Totally the stocks we are interested to purchase, have
any good Brand value must be noted as very important.
Brand is one of the most
important resources, the real identity, and public image for an organization. A
brand represents the unique features, characteristics, quality, and reliability
of the product of a company. A good brand develops an idiosyncratic,
ever-lasting, and distinctive perception of the product in the minds of the
customers. Keeping in view the significance of a brand, an organization must
manage it in the same way as the other important organizational resources; like
human, financial, physical, etc.
Although, strictly speaking, a brand is composed of the sum of its individual parts, the brand ultimately exists independently of and its value is greater than the mere sum of those parts. In fact, the value-added of a brand is precisely the concrete and direct result of the synergy that is created among its component parts. The brand thus takes up a life of its own and leads us beyond the limited functions of such objects of intellectual property protection as a trademark or a design and the generic product or service differentiated and rendered more appealing by those objects of protection. The concept of a brand reminds us that creating and protecting a trademark or design is not an end in itself. These are only tools (albeit important ones) in the process of developing an effective brand image for one’s goods or services. It is the brand image as a whole, and not merely a trademark or design as a stand-alone element, that differentiates one’s goods and/or services from those of competitors, denotes a certain quality, and over the long term attracts and nourishes consumer loyalty.
WHAT MAKES A BRAND SUCCESSFUL?
Many factors go into making a successful brand. There is no single miracle formula. Brand development is as much a science as it is an art. Nevertheless, to be successful, a brand must at least be clear, specific and credible in terms of its message, its differentiation power, and the quality it symbolizes. It should also be attractive and appropriate in relation to the goods and services which the brand embodies.
Among the various factors that determine a brand’s success, one of the most important ones is the brand’s differentiation power. The brand must have a “point of difference” as far as the target group of consumers is concerned. This point of difference must be:
1. recognizable (in terms of the good and /or services marketed);
2. desirable (in terms of the quality and value of the goods and /or services offered);
3. credible (in terms of reliability); and
4. properly communicated (in terms of how the message is formulated and to whom it is
targeted).
In today’s highly competitive global market place, with its overwhelming selection of similar and frequently identical goods and services, if a brand cannot differentiate itself and the goods and services it is meant to promote from those of the competition, then it is useless and thereby worthless.
Inversely, the stronger the differentiation power of a brand, the greater its effectiveness and therefore its value both for its owner and for consumers. Only a brand with a strong differentiation power can serve as a focal point around which to promote an enterprise’s products and services, develop their reputation and thereby attract and maintain consumer loyalty, the essential reasons for justifying the investment of time, money and effort required to develop a successful brand.
HOW BRAND VALUE IS DEVELOPED?
A well established brand
contributes to the financial growth and economic performance of the
organization which leads to a secure and sustainable future. This is because
the value of a brand is totally dependent upon the recognition ability and
acceptability by its consumers, perception about this brand, and the way it
makes them satisfied. Satisfied and happy customers not only buy that brand
again and again, but also act as promoters for the business and bring new
customers by telling them their good experience with the brand
EVALUATION OF THE SIGNIFICANCE OF BRAND
VALUE IN CREATING VALUE ADDED PRODUCTS – EXAMPLES FROM TWO BRAND LEADERS:
1. Ferrari – The brand leader in sports cars industry:
2. Dell Inc. – The brand leader in personal computers and laptop industry:
(a). The changing world of Consumer Behavior and the Opportunities for Brand Leaders:
In this 21st century,
consumers have become more knowledgeable. Their buying behavior, taste, product
perception, and life style have a direct impact on any brand (Moorthi, 2009).
Before buying, they evaluate the products of all the competitors and choose the
one which not just meets, but exceeds their expectations
Ferrari:
Ferrari does not take
this changing consumer behavior as a threat for its brand; rather it believes
that this thing brings the biggest opportunity to strengthen its brand value
and capture more and more customers. For this, it guarantees performance,
prestige, luxury, status, and style of such a high level which consumers will
not find in any other brand.
Dell Inc.:
Dell operates in such an
industry whose products are highly exposed to changing consumer behavior. To
meet this challenge, Dell brings the latest technology in its products and
tries to introduce it before its competitors do so. It enables Dell to capture
the potential customers who have the demand for latest technology.
(b). The importance of the growing marketing
opportunities in the field of sustainability:
Even a strong and
well-established brand cannot survive if the industry which it serves becomes
mature (purchase
essay online ).
Surety of a sustainable future is achieved when there are attractive marketing
opportunities. It is the organization’s own capability to avail these
opportunities effectively and make its future sustainable for as long time as
possible (Kapferer, 2008).
Ferrari:
Ferrari has been the
most liked sports car brand in the world for many years. It has achieved this
top position through heavy investments in Research and Development. Ferrari
believes that R & D is the best way to keep itself abreast of the growing marketing
opportunities. It explores these opportunities and makes strategies
accordingly. For example; what new features consumers want to see in its new
models, what improvements can be made in the existing features, what is the
industry and competitor position, etc.
Dell Inc.:
Dell is in such a market
which has an ever-lasting potential to grow. Although technological products
become obsolete very soon after their launch, but give attractive opportunities
to the manufacturers to make as much profits in this period as they want. Dell
keeps an eye on the competitors, consumers’ choice, and these marketing
opportunities so that it can get the best of its efforts.
(c). New Product Development:
Continuous up gradation
of existing products and introduction of new ones is the characteristic of
competitive organizations. If an organization will just depend on its existing
products and will not introduce new features in them, it will be thrown out by
its competitors from the industry (Joachimsthaler, Aaker, Quelch, Kenny, &
Vishwanath, 1999).
Ferrari:
Ferrari is the most
competitive and advanced car manufacturer in the world in a sense that it has
always brought highly innovative and stylish models of its cars. It uses the
latest technology to improve the engine performance, speed, control, and other
features. Its every new model is more advanced in technology, more stunning in
performance, and more stylish in looks.
Dell Inc.:
Dell is renowned for its
continuous up gradation of products. It every new technology is the result of
strong Research and Development. It spends a lot on R&D section to keep its
brand alive.
(d). Providing Excellent
Services:
A brand can never be
made strong if an organization just intends to sell the product, take the
money, and forget the customer (Verma, 2009). It essentially requires the
organization to provide efficient customer services during and after the sales
process so that they always remain satisfied and loyal with the brand and never
switch to the competitors (Moorthi, 2009).
Ferrari:
Ferrari provides highly
exceptional services to its customers. It believes to provide the real “value”
for their money. Free maintenance, warranty of important parts, technical
assistance, and complete guidance are some of the services which have really
contributed in Ferrari’s success.
Dell has made a lot of investments just to ensure the Excellency of its services. Dell service centers, warranty slips, easy availability of original Dell products and online technical support are the part of its excellent customer services.
WHY IS BRANDING IMPORTANT TO CONSUMERS AND TO ORGANIZATIONS ?
This assignment stresses the fact that how important Branding is to consumers and to various organizations. The assignment focuses on the fact that how Branding impacts the mindset of consumers and organizations on the whole.
The assignment further details the concept of Branding, defines Branding and explains the concept of Brand Equity, importance of consumers and customers in the process of Branding and also how important is Branding to professional marketers.
Branding has always been around for centuries as a means to differentiate between the goods of one firm from those of another. In fact, the word brand is derived from the Old Norse word brandr, which means "to burn,"
Branding is a major issue in product strategy. "Well Known brands command a price premium. At the same time, developing a branded product requires a great deal of long term investment, especially for advertising, promotion and packaging.
Branding can be defined as the "Entire process involved in creating a unique name and image for a product (goods or service) in the consumers' mind, through advertising campaigns with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers"
Branding is
the process which involves decision making which facilitates the establishment
of an identity for a product with the goal of differentiating it from others.
In the economic markets where there is fierce competition and consumers may
select from among many products, the creation of an identity in the form of a
brand is very important from the firm. It is very important as it helps in the
positioning of the product in the minds of the consumer.
Companies dealing with consumer products have not since long recognized the value of branding, it has only been since the last 10-15 years that organizations in the business-to-business market have started focusing on brand building strategies. The most famous company to brand components is 'Intel'
One of the most distinctive skills of professional marketers is their ability to create, maintain, protect and enhance brands. It is the cornerstone of Marketing. The American Marketing Association defines a brand as: a name, term, sign, symbol, or design, or a 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.
Companies dealing with consumer products have not since long recognized the value of branding, it has only been since the last 10-15 years that organizations in the business-to-business market have started focusing on brand building strategies. The most famous company to brand components is 'Intel'
One of the most distinctive skills of professional marketers is their ability to create, maintain, protect and enhance brands. It is the cornerstone of Marketing. The American Marketing Association defines a brand as: a name, term, sign, symbol, or design, or a 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.
In simple words a brand helps the
consumer in identifying the seller or the maker. Under the trademark law, the
seller is granted the exclusive rights to use the brand names. However brands
are different from other assets such as patents and expiry dates. The major
difference being expiry dates.
A brand is primarily important to the consumer as it conveys up to six levels of meaning, namely it brings to mind certain 'attributes' of the product, these attributes must be translated into 'benefits'. The Brand signifies the 'value' of the product, it may represent a culture of the organization, it projects a certain personality of the organization and most importantly a brand suggests the kind of consumer who buys or uses the product.
The obvious next question as suggested by the essay title is, 'that why are brands and branding important in today's world'? What functions do they perform that make them so valuable to firms and consumers? For a company to be successful in today complex and fierce marketing dominated world it is important that the organization build's up a strong Brand Equity. More positive the 'Brand Equity' better it is for the organization. It explains that why are there different outcomes resulting from the marketing of a branded product and service than if it was not branded. Fundamentally this concept stresses on the fact that how important the brand is in marketing strategies. Clearly 'Brand Equity' is an asset to the company as it helps it in creation of more customers as a result increasing the company's market share.
'Brand Equity' can be defined as the positive differential effect that knowing the brand name has on customer response to the product or service. Brand equity results in customers showing a preference for one product over another when they are basically identical. The extent to which customers are willing to pay more for the particular brand is a measure of brand equity (Kotler P 2003).Another accurate definition given by Netmba.com is as follows "A brand is a name or symbol used to identify the source of a product. When developing a new product, branding is an important decision. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. This concept is referred to as brand equity" (Netmba.com 2007).
Brand equity is an intangible asset that depends on the interactions made by the consumers. It is the built up value that a brand possesses. There are three perspectives from which Brand equity can be viewed, the first being 'financial'. One way to measure brand equity is to determine the price premium that a brand commands over the product. Secondly, brand extensions as the benefits are the leveraging of existing brand awareness. The third perspective is 'consumer based', as a strong brand increases the consumers attitude strength towards the products associated to the brand. It is built by experience with a brand.
Strong brand equity provides the organization with a more predictable income stream and source. It increases the cash flow for the firm by helping it to increase its market share, reducing promotion related costs and allows premium pricing. Most importantly 'Brand Equity' is an intangible which can be 'leased and sold' by the firm.
Another important concept related to the organization in the context of branding is the concept of 'Brand Loyalty'. It is very important for organizations to have loyal customers. Branding and brands are only successful if after they're implementation they retain 'loyal' customers. It 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.
A brand is primarily important to the consumer as it conveys up to six levels of meaning, namely it brings to mind certain 'attributes' of the product, these attributes must be translated into 'benefits'. The Brand signifies the 'value' of the product, it may represent a culture of the organization, it projects a certain personality of the organization and most importantly a brand suggests the kind of consumer who buys or uses the product.
The obvious next question as suggested by the essay title is, 'that why are brands and branding important in today's world'? What functions do they perform that make them so valuable to firms and consumers? For a company to be successful in today complex and fierce marketing dominated world it is important that the organization build's up a strong Brand Equity. More positive the 'Brand Equity' better it is for the organization. It explains that why are there different outcomes resulting from the marketing of a branded product and service than if it was not branded. Fundamentally this concept stresses on the fact that how important the brand is in marketing strategies. Clearly 'Brand Equity' is an asset to the company as it helps it in creation of more customers as a result increasing the company's market share.
'Brand Equity' can be defined as the positive differential effect that knowing the brand name has on customer response to the product or service. Brand equity results in customers showing a preference for one product over another when they are basically identical. The extent to which customers are willing to pay more for the particular brand is a measure of brand equity (Kotler P 2003).Another accurate definition given by Netmba.com is as follows "A brand is a name or symbol used to identify the source of a product. When developing a new product, branding is an important decision. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. This concept is referred to as brand equity" (Netmba.com 2007).
Brand equity is an intangible asset that depends on the interactions made by the consumers. It is the built up value that a brand possesses. There are three perspectives from which Brand equity can be viewed, the first being 'financial'. One way to measure brand equity is to determine the price premium that a brand commands over the product. Secondly, brand extensions as the benefits are the leveraging of existing brand awareness. The third perspective is 'consumer based', as a strong brand increases the consumers attitude strength towards the products associated to the brand. It is built by experience with a brand.
Strong brand equity provides the organization with a more predictable income stream and source. It increases the cash flow for the firm by helping it to increase its market share, reducing promotion related costs and allows premium pricing. Most importantly 'Brand Equity' is an intangible which can be 'leased and sold' by the firm.
Another important concept related to the organization in the context of branding is the concept of 'Brand Loyalty'. It is very important for organizations to have loyal customers. Branding and brands are only successful if after they're implementation they retain 'loyal' customers. It 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.
'Brand Loyalty' can be defined as the
"Extent of the faithfulness of consumers to a particular brand, expressed
through their repeat purchases, irrespective of the marketing pressure
generated by the competing brands" (businessdictionary.com 2009). Brand
loyalty has been proclaimed by some to be the ultimate goal of marketing. True
brand loyalty implies that the consumer is willing, at least on occasion, to
put aside their own desires in the interest of the brand (Oliver).Brand loyalty
is more than simple repurchasing, however. Customers may repurchase a brand due
to situational constraints, a lack of viable alternatives, or out of
convenience.
Consumers have varying degrees of loyalty
of loyalty to specific brands, stores and companies. Oliver denies loyalty as
"A deeply held commitment to re-buy or re-patronize a preferred product or
service in the future despite situational influences and marketing efforts
having the potential to cause switching behavior" (Kotler P 2003).On the
basis of the following definition we can broadly divide buyers into four groups
according to brand loyalty status. Namely, hard core loyals who only buy one
brand all the time, split loyals who are loyal to two or three brands, shifting
loyals who shift brands and switchers who show no loyalty to any brand.
Each existing market consists of varying number of the four types of buyers. A 'brand loyal' market is the one with a high percentage of hard core brand-loyal buyers. Existing companies have a hard time in increasing they're market share where as new firms entering the market has a tough time entering and settling in.
A company can learn a great deal by studying they're degrees of brand loyalty. By studying the hard-core royals a firm can analyze its strengths, by studying the split-loyals can target and identify competitive brands and by looking at customers which do not purchase they're brands a company can strengthen its marketing weaknesses and as a result correct them. Most importantly it is interesting to know that what looks like a brand-loyal purchase pattern may simply reflect habit a low price etc. Thus a company must carefully analyze and interpret what is behind the observed purchase patterns.
Brands provide consumers with important functions. They identify the source of the product and allow consumers to look at specific manufacturers more responsibly. Most importantly brands take special meaning to consumers. From an economic perspective brands help consumers in lowering their search costs for products. "Consumers offer their trust and loyalty with the implicit understanding that the brand will behave in certain ways and provide them utility through consistent product performance and appropriate pricing, promotion and distribution programs and actions".
Brands are also symbolic as they help individuals in projecting their style statement. Certain brands exhibit certain quality traits. In summary the special meaning a brand has can change with varying products. Brands take on personal significance to consumers in their day-to-day life. As a consumer's life becomes more complex by the day it the ability of the brand to simplify decision making that makes it so invaluable.
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 brand provides a description in the form of a name or service to distinguish the product it sells from its competitors.
Brands provide a number of functions to firms. Fundamentally they serve the purpose of identification. They help in organizing a firm's inventory and also help with the company accounts. It also looks into the legal issues of the organization and provides it with legal protection. A brand can retain its Intellectual Property Right (IPR) giving the title a legal status to the brands owner. Brands indicate towards the quality of the product an organization trades in. Branding is seen as a powerful means to secure an advantage over the organization's competitors.
To sum it all up to an organization brands represent valuable legal property which can influence consumer behavior and buying patterns. For this specific reason large sums of money have been invested in brands in mergers and acquisitions, starting with the early years on the 1980s.To conclude for an organization most of its value lies in its intangible assets and goodwill and 70 percentage of intangible assets can be made available in the form of 'Brands'.
Each existing market consists of varying number of the four types of buyers. A 'brand loyal' market is the one with a high percentage of hard core brand-loyal buyers. Existing companies have a hard time in increasing they're market share where as new firms entering the market has a tough time entering and settling in.
A company can learn a great deal by studying they're degrees of brand loyalty. By studying the hard-core royals a firm can analyze its strengths, by studying the split-loyals can target and identify competitive brands and by looking at customers which do not purchase they're brands a company can strengthen its marketing weaknesses and as a result correct them. Most importantly it is interesting to know that what looks like a brand-loyal purchase pattern may simply reflect habit a low price etc. Thus a company must carefully analyze and interpret what is behind the observed purchase patterns.
Brands provide consumers with important functions. They identify the source of the product and allow consumers to look at specific manufacturers more responsibly. Most importantly brands take special meaning to consumers. From an economic perspective brands help consumers in lowering their search costs for products. "Consumers offer their trust and loyalty with the implicit understanding that the brand will behave in certain ways and provide them utility through consistent product performance and appropriate pricing, promotion and distribution programs and actions".
Brands are also symbolic as they help individuals in projecting their style statement. Certain brands exhibit certain quality traits. In summary the special meaning a brand has can change with varying products. Brands take on personal significance to consumers in their day-to-day life. As a consumer's life becomes more complex by the day it the ability of the brand to simplify decision making that makes it so invaluable.
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 brand provides a description in the form of a name or service to distinguish the product it sells from its competitors.
Brands provide a number of functions to firms. Fundamentally they serve the purpose of identification. They help in organizing a firm's inventory and also help with the company accounts. It also looks into the legal issues of the organization and provides it with legal protection. A brand can retain its Intellectual Property Right (IPR) giving the title a legal status to the brands owner. Brands indicate towards the quality of the product an organization trades in. Branding is seen as a powerful means to secure an advantage over the organization's competitors.
To sum it all up to an organization brands represent valuable legal property which can influence consumer behavior and buying patterns. For this specific reason large sums of money have been invested in brands in mergers and acquisitions, starting with the early years on the 1980s.To conclude for an organization most of its value lies in its intangible assets and goodwill and 70 percentage of intangible assets can be made available in the form of 'Brands'.
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