Three Benefits of Developing a Strong Brand for Your Product
Branding is a term that describes the process of building a distinctive and lasting image or reputation for a company, person, product, or service that people readily recall. A brand is a business identity imbued with quality, originality, and personality. Developing a strong brand takes time and effort, usually requiring significant and consistent marketing and public relations campaigns which may span several years. Despite the efforts involved in creating a strong brand, many companies pursue a branding strategy due to the number of benefits conferred upon a distinct, recognizable branded product.
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Premium Price
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In today's easy access to comparative product information via the Internet, price often becomes a key determinant in a product's purchase decision. Many websites offer side by side price and feature comparisons for everything from electronics to vehicles. When a product's user or consumer deems the quality, customer service, and other factors equal, the only remaining differentiation is the price. A branded product readily evokes thoughts of great service, high quality, coolness or other consumer wants and desire and thus, easily sets itself apart from its competitors. Since the other factors are not equal, price is no longer a significant issue. Hence a branded product can command a premium price.
Loyalty
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When a product has a strong brand, that brand often evinces a strong emotional response. The emotional messaging was promulgated in the marketing and public relations effort used to build the brand. Consumers recognize the brand and will buy the product when they have a need or ma make an impulse buy when they see it on a shelf. When the user's experience matches or exceeds his or her expectations, the user will make additional purchases more often. This is called brand loyalty. That loyalty translates into word-of-mouth referrals and unpaid brand ambassadors, driving increased revenue. This loyalty also lowers marketing and public relations costs, thus reducing the cost of acquiring new customers.
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Product Extensions or Licensing
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Successfully development of a strong brand for a product results in brand equity. With brand equity the brand now transcends the original product and flows over to the company or other products. A relevant example is Apple's branding of the iMac, then iPod. Now anything that Apples comes out with, such as the iPhone and the iPad, gets a similar reception. Like Apple and others, companies can leverage their brands to other products that fit their strategy. A company can produce additional products under the brand name or it can license its brand to another entity that meets its criteria. This ability to extend the brand to other products or into licensing arrangements has the dual benefit of decreasing new product introduction while increasing revenue.
Summary
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Developing a strong brand costs money in the short term but provides major benefits which ultimately saves companies significant money in the long term. The truth is that brand recognition requires less marketing dollars funneled into consumer awareness.
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References
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