What Are the Four Advantages of a Strong Brand?
A brand is an intangible asset that provides many benefits for businesses. Building a strong brand requires marketing effort, time and patience. When a business has a strong brand, it makes it difficult for competitors to enter into the marketplace. A strong brand influences the choices made and products bought by customers. Once a company has built a strong brand, it must maintain a positive reputation.
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Premium Price
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Companies with strong brands can charge more for their products and services because the brand is valuable in the eyes of consumers. Some customers won't even consider purchasing alternative products because they do not believe they will receive the same value. For example, a customer may choose to buy a premium cup of coffee from a national coffee chain instead of buying coffee at a local corner store. The reason is that the national coffee chain has built its brand and established in the minds of customers that the premium cup of coffee is worth the price because of the quality offered to the customer.
Loyal Customers
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A company with a strong brand establishes loyal customers throughout the years. A company also can increase its income by introducing new products to the market. Customers who are loyal to a name-brand company are more likely to try the new product, as opposed to someone who is not loyal. For example, a popular burger place could offer a new smoothie drink at a premium price. Many loyal customers will purchase the new drink because they are pleased with the products they already buy from the company. Loyal customers also draw new customers for the company through word of mouth.
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Market Share
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A customer with a strong brand has a high market share because of its reputation, and this makes it difficult for new entrants to enter the marketplace. Companies can increase their marketing efforts to gain a greater share and build a defense against competitors. Companies with strong international brands can increase global market share by establishing their brand in countries with little competition.
More Predictable Income
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A strong brand allows companies to have a more predictable stream of income because they understand their customer base and market share. A more predictable stream of income allows companies to create budgets and make plans for future growth. Companies with predictable earnings that are positive attract more investors than companies with weak or nonexistent brands. Many companies that build strong brands sell their companies to other businesses for a profit.
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