Scope of branding and current trends - Essay Example

Scope of Branding and Current Trends Introduction: What is Branding? Simply put, a brand is merely the fundamental identification of a company. On the practical side, a brand is the symbolic embodiment of all the information connected with a company, product or service that typically includes a name, logo, and other visual elements such as images, fonts, color schemes, or symbols. The psychological aspect, sometimes referred to as the brand image, is a symbolic vision created within the minds of people and consists of all the information and expectations associated with a product or service and sometimes even the employees of the brand owner and the brand customers them selves. Interestingly brands in the field of marketing originated in the 19th century with the advent of packaged goods. Industrialization moved the production of many household items, such as soap, from local communities to centralized factories. These factories, generating mass-produced goods, needed to sell their products to a wider market, to a customer base familiar only with local goods. So the packaged goods manufacturers needed to convince the market that the public could place just as much trust in the non-local product. Around 1900, James Walter Thompson published a house ad explaining trademark advertising. This was an early commercial explanation of what we now know as branding. Abstract: Since their origin, brands have come a long way in technique, sophistication and reach. Many traditional “rules” of branding have been tossed aside over the years with the advent of the internet, cutting edge branding techniques and complex ventures. Branding has also conquered new terrains such as law firms, countries or even local produce. In this paper, we will attempt to identify and expand on some of the latest trends in branding and their scope. We will also attempt to demonstrate how these changes in branding concepts are a reflection of our times and a natural progressive reaction to external factors that has driven its rapid and powerful evolution. But, before we delve into that, we first take a look at the various issues that influence responsible branding to really comprehend the magnitude of a strong brand influence and also its constraints. Branding issues There are certain branding issues that determine and limit the full manifestation of the values associated with branding such as decreased price sensitivity, increased customer loyalty, independence from a particular product category, increased market share etc. Some of these issues are: The nature of the business: According to D.Wendal Attig in Marketing Times Online(January 2002); “ brand definitely impacts profitability, but it is a "flag" that is supported and held high by everything else the company does to deliver the product, program or service”. For example, Amazon.com has created an incredibly strong brand with customers. Amazon.com has concentrated all of their efforts on the customer experience and on creating extreme value in the "branded" relationship with those customers with impeccable customer service and experience. Yet it finds itself being unprofitable. This does not reflect on the power of its branding, but on the company’s other huge operational costs, the branding efforts notwithstanding. The relationship with consumers is solid, the service and customized delivery is excellent, but the costs of operation adversely affect the profitability. Long-term Vs Short-term When it comes to profitability, branding is more an investment, rather than an expense. Branding is a carefully crafted process that might take a long time to successfully create and manifest. Hence the benefits are also long term as opposed to short term. Therefore the company’s goal should be long term growth instead of short term results as branding is a long-term holding, a virtual corporate asset, while marketing communications are relatively short-term investments. There is another important reason for thinking long term in branding. We should remember that product life cycles are shrinking dramatically, some estimates as much as four fold reduction over the last fifty years (The Business of Branding Newsletter, January 2000).So new product sales are accounting for an increasingly higher percentage of company sales. That means that as companies manufacture new products under the same brand, they cannot afford to forget the original brand image associated with their old products. For example, in 2001, Gateway which had successfully built a brand image as a low-end PC, shifted its focus to more-expensive machines in an effort to enhance the brand’s prestige and profitability. Even though, Gateway made more money on each machine, and posted a small paper profit in fourth-quarter 2001, that accomplishment came at the expense of market share; in that “profitable” fourth quarter alone, sales fell off 53.6%. So the company had a major re-organization, closing 19 stores and laying off more than 2,000 employees (The Business of Branding Newsletter, January 2000) in an effort to control overhead - to better compete in their original niche i.e. the higher-volume low-priced PC market. This shows that when conceiving a brand image, one has to project far into the future of the company and envisage the adaptability of current brand to future trends. Rebranding: Branding leaves an indelible mark on the mind set of customers. Therefore rebranding to counter losses in market share, unless absolutely unavoidable, sometimes backfires as it might lead to loss of existing customers who miss the characteristics of the old image. For example, consider the case of the former multi-billion-dollar software company MicroPro which in 1980s and 1990s manufactured the dominant word processing program called WordStar. The product name WordStar was better-known and more-respected than the corporate name MicroPro. So, MicroPro rebranded the corporate name WordStar International, anticipating even more success. The new brand identity proved immediately self-limiting. As WordStar International, the company was able to sell only the Wordstar program that soon became outdated. So it became poorly positioned to keep up with changes in the computer industry as wordstar became synonymous with an outdated product that the customers moved away from. Responsible Promises: Broken promises literally make broken brands. As a strong brand is always associated with a sense of promise, perceived or literal, consumers who were hooked with false claims will most likely quit the brand. More over, by word of mouth a negative publicity will be created regarding the negative experience with the brand leading to a mere one-time sale. This defeats the purpose of branding as the primary motivation of branding is sustained relationship with customer through a beneficial brand image.1999 and early 2000s saw the collapse of several dot com companies that simply made promises their organization, infrastructure and overall brand could not keep. A corporate brand is essentially a promise. Brands and trust are built and reinforced over time based on customer perceptions and experiences. The companies that choose to ignore these glaring facts and continue to make brand promises they cannot keep will never build a loyal customer base. So the failure is not in the branding but in the company ethics. Branding-Reflection of change of times: The Internet: Today’s brands take full advantage of the aggressive nature of the medium to ruthlessly use the internet to develop a strong presence and enhance the company’s value to the end user. Many dot com companies are made or shattered in this medium. Well known global brands like Sony have maintained strong connections with their customers through the internet. The internet is also a boon for start up companies to acquire a global reach. In today’s times, we see many creative ways to promote brands on the internet. For example, free online newsletters are a highly effective form of marketing. They keep the brand fresh in the customers (and potential customers) minds, establish the brands expertise and credibility, reinforce the brands identity and promise and help to build emotional connection and loyalty with the customers and potential customers. As an advantage to startups, online newsletters are very inexpensive to create and cost virtually nothing to publish. Because of the low cost, even small companies can afford to send them to nonrespondents indefinitely. Many companies provide fresh, useful content in each issue to tempt the potential customers to read further. A classic example of this is that of skin care companies providing information about skin care in general and then using the newsletter to lead people to the company’s Web site or specific offers based upon their interest in a topic or product (through hypertext links).Membership organizations can also create customer loyalty and increased sales. Examples include Harley-Davidsons Harley Owners Group (HOG), Hallmark Keepsake Ornament Collectors Club and Ponds Institute. This can also take the form of customer advisory boards, expert councils, product launch parties, customer seminars and other forums. Even frequency programs can begin to feel like membership programs to customers if they contain relationship-building elements. Avant-garde Branding techniques: Recent times have seen that companies have been forced to relentlessly pursue new product development activities, as the innovativeness of a company has become the single strongest predictor of investment value. Dynamic markets and short product lives have often pushed even big brands to come up with cutting edge products, that may fall in totally different product categories. Hence the challenge in branding is to enable the customer to make the fundamental link between the latest innovative products and the original brand. Thus an innovative company needs innovative branding techniques that are more forward thinking in its concepts and non-traditional in implementation as it has become increasingly difficult to sustain consistent competitive advantage based on product innovation alone. Therefore, innovation in branding has become the perfect solution. For example, let us study the case of Sony, one of the worlds greatest brands. Much of the brand equity Sony enjoys is rooted in product innovations. But it is to be noted that Sonys Brand and Marketing Communications Group has been as inventive and dynamic in branding as its designers and engineers are in product development. Over the years, Sony has evolved and diversified its business territory from product manufacturer to the creation of digital networks integrating devices, service, and content, thus expanding its brand territory. Sony has continually experimented in brand communication and innovation by using new channels, leveraging old channels in new ways, and optimizing multi-channel synergies. For example, Sony introduced Sony Style in 2000 as a sub-brand comprised of venues for people to come into direct contact with and experience Sony. They include the following: Sony Style netbook is a quarterly newsstand magazine about the new lifestyles technology makes possible. Consumers experience all things Sony through this highly engaging media and take away a broader, more unique understanding of the Sony brand. Sony Style retail stores provide an immense brand experience, while Sony’s store windows on New Yorks Madison Avenue promote their brand awareness by showcasing the Sony brand fashion. Sony also launched SonyStyle.com, which is not only a one-stop shopping destination to provide a place where consumers will go to learn about, access and use Sony’s products, services and content, but can also communicate with Sony and each other. By branding all the three communication channels Sony Style, has managed to create an integrated, multi-media brand playground. It is a prime example for the sophistication and innovation of branding concepts of our times. Global Branding: There was a time when brands were classified as local or global. It is no longer so. Even when strategies are directed at a local consumer audience, with the advent of technological tools, brand marketing becomes global by default. Every product in today’s world has a global community of potential consumers as consumers world wide have a global reach having opportunities to find anything anywhere. Interestingly global brands have largely benefited countries with very small markets like Sweden and Finland , where companies like Nokia and IKEA have greatly benefited from going global .These companies have succeeded by creating a brand image that resonate with multiple cultures and core values. For example, by identifying a basic, global consumer need for affordable basic style, IKEA has built its empire on respecting that need for quality and simplicity. Invasion of New Territories Over the years, companies have conquered new and sometimes un-orthodox terrains to brand. Let us explore some of them to get an idea of the significance and scope of brand marketing. Fresh Produce and Meat: There are several reasons for brand promotions in this sector. Heightened competition in the category, Consumers’ obsession and concern over food safety, freshness and quality, have forced manufacturers to move beyond mere category promotion, `a la Washington apples.’. Innovative packaging has helped fresh food to be perceived as more of a food category than a mere agricultural commodity making branding easier. As with other traditional brands, several creative branding techniques have been adopted over the years .For example, Albert’s Organics, which was established in 1982 in Los Angeles and which now operates a handful of distribution centers throughout the country launched their own Grateful Harvest line to cash in on the popularity of organic food. Albert’s Organics helps stores that carry Grateful Harvest to promote the brand by providing point-of-purchase information. These materials not only promote the brand, but also alert mass-market shoppers to some of the food issues that organic producers try to address. Branding Places and Cultures: During the last hundred years or so, countries have taken full advantage of branding concepts to increase their wealth - their ability to add attraction to exported brands (Electronics from Japan for example), marketing the country itself as a tourist brand, political marketing which ensure that consistent and attractive messages about the country in general are communicated to the rest of the world through foreign policies ,sporting and cultural activities. In this regard a relatively recent trend in tourism branding in recent years has been the vast popularity of rural tourism. Many individual rural destinations which are close to each other geographically have formed a cooperative brand that promotes one regional brand image to yield greater marketing efficiency and attract visitation. For example, rural tourism in New Mexico employs regional cooperative branding in the seven-county Old West Country in the southwest part of the state. New Mexico’s branding focuses on the areas cowboys-and-Indians heritage. The recent globalization policies in developing nations and outsourcing of resources among developed nations have taken branding of countries to a whole new level wherein developing countries are vying with each other for Foreign Direct Investment and not merely tourism. China for example has always branded itself as a country of cheap labor .Now China has built giant technological parks which in collaboration with their local governments compete in the open market as the most viable investment destinations for high tech companies all around the world. Conclusion: We have seen that the brand reflects all of a customer’s attitudes about the product. But no matter how good the brand is, if the product is not good, and promises are not met or the company is tangled in other problems, branding will not work. In this fast paced world of ever changing products and situations, branding purposes are best served by reconciling the past with the future by adapting and re-positioning .In this way brand owners are able to better cope with change without losing the perks related to the existing brand. As we have seen through many examples, companies in today’s world cannot afford to rest on past laurels and former brand glories .If brands do not keep pace with the rest of the world by constantly re-inventing their branding standards and scope through innovative techniques; they are soon to be doomed. Branding has indeed come a long way from its functional, rudimentary beginnings and has conquered new boundaries in sophistication, intricacy and territory. We have seen in many cases cited in this paper and in many different industries, changing times create new situations and circumstances that have driven not only product innovations but also brand innovations. After all necessity is the mother of all inventions. From government policies to raw meat, branding has become one of the most influential factors in today’s world that shapes our opinion, thinking and ultimately even our culture. Thus it would not be a stretch to infer that the power and scope of branding done right is unrivalled by any other concept in marketing. References Anholt,S.(2006). Journal of Brand Management.. Nation Branding.Henry Stewart Publications. Attig,D.W.(2002).Is Branding Dead?Marketing Times Online.Retrieved March 2006 from http://www.imakenews.com/smei/e_article000050546.cfm. 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