Branding Fundamentals and Decisions

Branding Definition

A brand is a name, term, sign, symbol, or design, or a combination of these, used to identify the goods and services of a seller and to differentiate them from competitors. Consumers can easily recognize the brand and its values. Branding serves to identify products and distinguish them. A brand personality is a set of human characteristics associated with a brand name.

Functions of Brand Names

• Create an image and identification for a product
• Make it easy to distinguish products
• Help create effective promotion and advertising
• Guarantee a certain level of quality, quantity, and satisfaction

Benefits of Branding

This encourages repeat purchases through brand loyalty. Branding also helps businesses create product differentiation. Businesses seek to add value to their products. They do this through branding and packaging, the product’s USP (Unique Selling Proposition), its quality, and offering speed to customers.

Branding Decisions

Branding vs. No Brand

• Value added commodity
• Better identification
• Promotion and differentiation
• Brand loyalty and repeat sales
• Premium pricing

Private Brand vs. Manufacturer’s Brand

• Distributor's (Private) Brand:
  • Lower retail price
  • Higher profit margin for distributor
• Manufacturer's Brand:
  • Better image
  • No promotion hassles for distributors
• Distributor's (Own) Brand: Used by the distributor, usually to promote outlet loyalty.

Single Brand vs. Multiple Brand

• Single Brand:
  • Full attention for maximum impact
  • Market homogeneity
• Multiple Brand:
  • Market segmentation
  • Market heterogeneity

Local Brands vs. Global Brands

Global brands often offer:

• Market homogeneity
• Uniform brand image
• Status and prestige
• Lower advertising costs

Key Branding Terms

Brand equity: The added value a given brand name gives to a product beyond the functional benefits provided.

Multibranding: A branding strategy that involves giving each product a distinct name when each brand is intended for a different market.

Brand image: The associations that come to mind when contemplating a particular brand.

Brand association: The thoughts and images that a consumer has about a brand.

Flanker brand: A new brand introduced into the market by a company that already has an established brand in the same product category.

Co-branding: When two companies form an alliance to work together, creating marketing synergy.

Luxury Goods

Luxury goods are products and services that are not considered essential and are associated with affluence. These, being most costly, are often bought by individuals with higher disposable income.