Branding has been around for centuries as a means to distinguish the goods of one producer from those of another. A brand is a specific term that may include a name, sign, symbol, design or a combination of these, with an intention to identify goods or services of a particular seller.
In fact, the word ‘brand’ is derived from the Old Norse word brander, which means ‘to bum’. Branding helps to develop customer loyalty and it is advertised by sellers under their own name. A good brand develops a corporate image. Usually customers prefer brands as they can easily differentiate the quality.
Thus, branding facilitates product differentiation. Managing a brand is a major task in marketing. The battle in the market takes place not between companies but between brands, and every firm tries best to develop its brand image.
According to Kotler and Amstrong, ‘a brand is a name, term, sign, symbol or design or a combination of these that identifies the maker or seller of a product, or services’.
Advantages of Branding
- Branding is indispensable for carrying on an effective advertisement campaign.
- Branding is greatly helpful in eliminating middlemen, particularly wholesalers. Popular branded goods can be easily sold by the manufacturers by establishing their own retail shops.
- Branding widens the market for the products and improves reputation of the concern.
- Branding establishes the individuality of a product which can be easily distinguished from the products of similar nature. The main objective of branding is to introduce “product differentiation”.
- Branding ensures constant demand for the product which is further helpful in formulating future production policies properly.
- Branded products and their prices are under the direct control of the manufacturer.
- Branded articles require lesser time to sell.
- Branding helps in introducing a new product in cases where a concern is already selling one or more products.
- Branding simplifies the purchasing process of the retailer and saves him from the botheration of choosing and selecting his stock.
- Branded products ensure manifold advantages to consumers viz., assuring them better quality, stability in prices and easy availability of the goods.
Significance of Branding
Branding provides benefits to buyers and sellers.
- A brand helps buyers in identifying the product that they like/dislike.
- It identifies the marketer.
- It helps reduce the time needed for purchase.
- It helps buyers evaluate quality of products, especially if they are unable to judge a product’s characteristics.
- It helps reduce buyers’ perceived risk of purchase.
- The buyer may derive a psychological reward from owning the brand (e.g., Rolex watches or Mercedes).
- A brand differentiates product offering from competitors.
- It helps segment market by creating tailored images.
- It identifies the companies’ products making repeat purchases easier for customers.
- It reduces price comparisons.
- It helps the firm introduce a new product that carries the name of one or more of its existing products.
- It promotes easier cooperation with intermediaries with well-known brands
- It facilitates promotional efforts.
- It helps in fostering brand loyalty, thus helping to stabilize market share.
- Firms may be able to charge a premium for the brand.
Essentials of Good Branding
- A good brand should be easy to pronounce.
- It should be easy to remember.
- It should be able to attract attention.
- It should suggest the company or product image.
- It should be easy to recognize.
- The brand identity should be very clear.
- The brand name should be registered.
- A good brand should be easy to translate into all languages in the markets where the brand will be used.
- A good brand should suggest the product benefits or suggest its usage.