Scope of Branding8th November 2021 0 By indiafreenotes
Brand forms an important part of product strategy. Brands can convey several meanings to buyers. For example, Nike stands for trendy, quality and well-engineered products.
Brands have been around for many years since business began. The managers thought about branding once the product was developed, priced and packaged. Branding a product was a decision in the end and was never given any significance as they felt that good product will generate sales automatically.
A brand is a perceptual entity that is rooted in reality but reflects the perceptions and perhaps even the idiosyncrasies of consumers. Ultimately a brand is something that resides in the minds of consumers. Therefore, the scope of branding expands beyond boundaries.
To successfully brand a product it is necessary to teach consumers:
- Who the product is.
- What the product does.
- Why consumers should choose that particular brand.
A branding strategy shall be considered successful only when the consumers have an answer to the above three questions which is strong enough to make them believe that there are significant differences in the products or services provided by a brand than others. Making sure the above three takes deep understanding of consumer and therefore the scope of branding becomes critical
The concept of branding can be applied to:
- Services; e.g. Indigo Airlines, ICICI Bank etc.
- Physical Goods; e.g. Parle-G biscuits, Tata Tea, Maruti SX4 etc.
- Stores; e.g. Future Retail, Central, 99 Store, Amazon etc.
- Place; e.g. Gujrat Tourism, Incredible India etc.
- Person; e.g. Sachin Tendulkar, Amitabh Bacchhan etc.
- Idea; e.g. abortion rights, free trade, or freedom of speech
- Organization; e.g. The Rolling Stones
Role of Brands
A brand is a product or service which help the organisation differentiate their products or services from others. The role of brand come in critical for the organisation as it translates into loyalty and higher margins in the long run.
The differentiation of a brand can be:
Related to Product Performance: e.g. Gillette, Merck, Sony, 3M
Related to Brand Identity: e.g. Coca-Cola, Calvin Klein, Gucci, Tommy Hilfiger, Marlboro
Benefits of Brand for the firm
- For a firm, the brand provides legal protection towards unique features or aspects of the product.
- Firms can charge a premium for owning a brand boosting profit on every sale.
- Brand loyalty helps organization to retain their existing customers when diversifying from one line of products to other. It provides security of demand and creates barrier for other manufactures to easily tap existing customers.
- Product can be copied, but brand cannot. Once a brand is established, it’s the invaluable asset for an organization.
- A well-established brand adds towards the overall value of the firm while calculating its net worth.
Benefits of Brand for the consumer
- Experience of customers with products of same brand help them to quickly decide whether they will want to go with their purchase decision or not making their decision easier.
- It helps to identify the source of manufacturer of the product and simultaneously assigns a responsibility towards an organization for the branded product.
- Brands bring with them a certain level of quality assurance.