Evaluate the importance of Branding to an organisation
Evaluate the importance of Branding to an organisation
"Branding", is like setting names for products. Nobody would set up in business or launch a new product without giving it a name. Branding is a very important part of promotion. It can help a business to establish an identity to the product. Furthermore, 'Branding' contributes to the value and financial viability of businesses, just like their products, fixed assets and input.
Businesses therefore would spend large amounts of money on TV and newspaper advertising campaigns, in order to end up with name that foremost in everyone's mind. Just think of 'Coca-cola' and 'Pepsi' competition, they both spend an obscene amount of money in promoting their brand each year, in order to become the dominant brand. We can also notice that many of their ads don't even contribute to its product, but rather, selling their brand and try to create "brand awareness" as well as "brand loyalty." Why? The answer is simply because they want to create a "well-established" brand, which would eventually formulate an inseparable link between its product and the provider.
This becomes apparent as we just see how powerful 'branding' can be as a selling tool in our multi-media marketing environment, when looking at areas such as: Computers, we would automatically think of IBM; or Software we would automatically think of Microsoft. These companies have established themselves as "the" dominant player in their fields.
Such good job at impressing its brand into consumer's mind may also gain advantages in competing with other brands/products. Even for businesses that have superior products at superior prices, but without a 'well-established brand', they might still have disadvantages when comparing to one's ...
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This becomes apparent as we just see how powerful 'branding' can be as a selling tool in our multi-media marketing environment, when looking at areas such as: Computers, we would automatically think of IBM; or Software we would automatically think of Microsoft. These companies have established themselves as "the" dominant player in their fields.
Such good job at impressing its brand into consumer's mind may also gain advantages in competing with other brands/products. Even for businesses that have superior products at superior prices, but without a 'well-established brand', they might still have disadvantages when comparing to one's corporate brand that is well-established. From this, it can be seen that the power of branding might even be more important tan the quality or price of your product. In addition, when competition is global, it may also gain advantages, as branding is a way to distinguish your product from other competitors' products as well as differentiate yourself and your business from the competition.
Branding is also like the reputation of a company, which also effects business' publicity. Often the choice of setting up an industry or a business is often directly linked to this notion of reputation. As a company has a good reputation, it may attract new customers, which would create ones' demand and 'brand loyalty'. Customers tend to purchase products from companies that have a good reputation. This is because as the firm have a good publicity, consumers tends to 'trust' their products, hence, consumers will be more willingly in trying their products, which would increases the amount of new customers for the business. As the business have more new customers, its demand and loyalty would eventually increase. As consumers try the products, satisfy with its quality, most of them will be used in using the product and are unwilling to change to another brand. The company would also gain more consumers' recognitions. Thus, such consumers will repeat-purchase the product on a regular basis. This way, brand loyalty would not only eliminate competition, but also increases business's sales and revenue, and presumably its profit would increases as well.
As a company have great amount of brand loyalty, the product's price elastic would eventually be low. This is because consumers are unlikely to be price sensitive. As the price elastic is low, it enables company to increase the price level without much effort upon demand; hence, the company can create value and a premium price. Such companies would have the benefit in setting their price higher than the prices of similar products, such as products from "Burberry." However, such products' qualities may not necessarily be superior.
However, a 'well-known brand' is not easy to build, especially for young companies. Also, it takes years to build and can be damaged very rapidly. Furthermore, "branding" is a very expensive promotion tool. Therefore, it requires large amount of financial resources, which businesses may not have the ability to pay. For instance, businesses would have to pay for registration cost for trademark, which avoids other competitors to 'steal' your idea, as called as 'legal' cost. Even for a well-established brand name, it can be easily forgotten in consumers' mind, therefore, it would be costly for businesses to pay for 'continuous' promotion of the brand.
Nevertheless, 'branding' is a very powerful tool in promotion and also very important tool for developing businesses. Although it is an expensive tool, which some businesses may not be able to afford the amount of money for 'branding.' Such businesses might results with some disadvantages when compare with a well-branded business, however for some cases/markets, branding may not be as important to consumers, such as plants. Ultimately business is only as good as the identity that underpins it, as 'branding' allows businesses attract new customers and make "established" customers return time and again. Thus, increases ones' profit.