The Rise of Branding - Essay Example

How can we critically account for the rise of branding in recent years? What are its causes and consequences? Table of Contents Introduction Rise of Branding in Recent Years The benefits of Branding The disadvantages of branding Introduction According to Aaker (1991) a brand is any aspect of a product or service which the consumers are able to associate with the product or the company itself. These aspects include either the name of the product or the service or the company, the slogan or the tune used in the advertising messages, logos or colours. For example, the brand ‘Nike’ is recognizable by the logo of a ‘right tick’ as well as by the slogan, ‘just do it’. Brand is therefore a selection of different factors that make up the image of the product, service or the organization in the minds of the consumers. A brand is much more than a product or even a tangible symbol, it could even have aspects of intangible feelings, emotions and cognitions associated with it. For example, consumers are able to identify brand apple mac when they see the distinct apple logo or when they hear the popular jingle used in its ads. Branding has gained increasing importance in the past several decades as organizations and marketers have created magnified brand images and identities – and it is these images or associations that consumers actually buy (Aaker (1991 ). For example, the brand Pepsi projects the product as a fun and youthful drink for the young fun-loving carefree generation. While there may little or no difference in the taste or the packaging of Pepsi from other coke sellers, it is this image that gets its customers. Branding also leads to an enhanced in the value of the company or the product. The value proffered by the brand name goes much beyond the intrinsic value in terms of assets, resources or knowledge held by the organization (Klein, 2000). An example of this heightened value of the company and its products can be seen in the sale of Krafts Food Inc. in the year 1988, when the company was sold for six times more its net-worth (Klein, 2000). This exorbitant price was only possible as Krafts Food Inc. was a well known brand that spelled quality and reliability for the consumers. The following sections discuss the rise of the branding in the recent years and the benefits and disadvantages of using branding. Rise of Branding in Recent Years Brands have been a part of the marketing plan for almost as long as marketing and sales have been. This is because, even in ancient times, people, regions, and their products were associated with certain characteristics – for example the Romans were known for their ability to administrate and the Indians for their mysticism. The brands get associated with the entity – be it a product or place or a person – and it is used to identify similar attributes. For example products from South Asia were associated with a brand of occult and mysticism during the late nineteenth century. Similarly, products manufactured by Japan became a brand for quality post the World War II. The brands therefore have a wide scope – they are not only associated with the company names, colours, logos or slogans, as described in the introduction in the definition of the brand, but they also include intangible attributes that describe it more fully. Though branding has been around forever, in the recent years there has been a surge in the way brands are promoted. There is a great increase in the professionalism with which brands are consciously developed and promoted. Additionally, there is now a proliferation of brands across diverse industries and even non profitable and non-business organizations like educational institutes, charitable organizations and governmental organizations. Even sports are not free of branding and private soccer teams and cricket teams are attract both the sportsmen to join as well as pull in audience. Additionally, in recent years, locations and regions are being branded for attracting tourists or industrial investors. For example, Abu Dhabi is being promoted as a hub fore medical tourism – a place where world class facilities and expert specialists from across the work are brought together and patients invited to make use of these (Abu Dhabi Tourism Authority, 2009). Similarly, several countries of Asia, like Malaysia, China, Thailand etc are branded as tourism destinations providing exotic experiences (Hamilton, Maddison and Toll, 2005). Branding has become an activity that now proliferates almost all human activities and is pervades all aspects of human lives. Branding also extends to people, especially celebrities like film stars and sports people. People have certain attributes of character as well as skills that combine to develop a brand of them. For example, Hollywood actress Angelina Jolie, due to her work as well as her personal life, is associated with the concept of ‘making the world a better place’. Her own persona as a brand was found useful by the UN when the actress was made the goodwill ambassador for the United Nations. For the marketers, brands have led the way to profit from the growing wealth of the middle class income groups across the world and especially in the Asian countries. The brands have both ushered in the culture of commoditization and consumerism as well as profited the business from this culture. The benefits of Branding There are a large number of benefits of branding, especially to the organizations who want to sell their products. Some of these benefits are highlighted below: Branding Leads to Recall Branding offers a chance for the advertiser to provide the potential customer with a tool to easily recognize and remember the product. For example, in the case of mail delivery organizations, purple and orange are always reminiscent of FedEx. These color associations with the company are easy to remember and recall when there is a need. Similarly, the arches of McDonalds, are easy to remember and create instantaneous recall for the customer. This aspect of branding is especially useful when the product is easily replaceable and when there is a wide choice available to the customers. For example, in the case of products for daily consumption – like tea, coffee, groceries or dairy products, it is the top of the mind brand – or the brand that the customer remembers most, that ends up getting bought. Branding creates Loyalty Customers who have had a positive experience with the brand and who remember it easily are often inclined to stay with the same brand. While at the time of the first purchase of the brand the customers may have been led by the emotional and cognitive feelings and thoughts that the brands evoked in them, once they tryout the brand, they start feeling recognizing with them. Branding Leads to Familiarity When consumers and even non-consumers are repeatedly reminded of the product or the service associated with the brand, they develop a sense of familiarity with it. This familiarity makes the product or the service known to the customers and research has established that people are more comfortable buying products that they are familiar with. Thus, in addition to making the existing customers loyal, branding can create potential customers even out of people who may simply be exposed to the brand repeatedly. Branding leads to Extension of Product lines and expansion of range of products offered by the organization Familiarity and loyalty with the brand may also lead the marketers to extend the range of products or services that they market under the brand. As a result of this, the customers may extend their purchases of other products to the same brand as well Branding Leads to Premium Pricing Branding can be used to project an image of high quality, competency or promote a distinct advantage. For example, the brand Mercedes-Benz spells quality based on German Engineering and hence the customers are willing to pay a premium over other brand cars. Similarly, the brand may portray a distinct image, a distinct advantage for the product over other substitutes and hence induce the customers into buying it. For example, the brand Tide of P& G is depicted as providing the best wash for whites and linens as opposed to its competitors – and hence it can be slightly priced higher. Branding Saves Promotional and Distributional Costs A brand that is easily recognizable by the people, and that generates customer loyalty may not need to spend too much on its promotional and advertising plan. This is true in the case of brands like Rolex, where the customers know the value and appreciate the quality of the product and may already be decided in favour of the purchase. However, in the event that the product or the service can be easily substituted, there is a need to continuously make the brand’s presence felt through advertising. For example, in the case of Coke and Pepsi, the majority of the customers are easily converted to one or the other brand. In this case, both the companies have to invest heavily into advertising so that their own brands are never far from the recall of the customers. As such, in this case, the deciding factor is the availability of the brand in the location. Hence, the distribution channel has to be efficient and well maintained in order to ensure that when the customers need it, and where they need it, the company’s brand is available. Brands as Competitive Advantages Brands are able to create distinct competitive advantages for companies. For example, in the case of insurance products, where the customers may not have the competence or the time to weigh all the features of their plans or the company selling the insurance, it is the brand recall that makes the decision. Similarly, brands like Marlboro – which provide a distinct flavor to the customers, can create inherent barriers to purchasing any other brands. Brands Lead to Equity Value Creation Brands provide a tangible addition to the overall valuation of a company. As seen in the example in the introduction section of the paper, Krafts Food Inc. was sold at six times its real value (Klein, 2000), simply due to the brand name and the brand value created by the name. The Disadvantages of Branding There are several disadvantages of branding, both from the marketers point of view and the customer’s point of view. Disadvantages of Branding to the Companies Branding Becomes Restrictive At times, the companies brand seem to lock the companies products and services into the image created by the brands. While at one time during the initial lifecycle phase of the product, that image would have been useful for the organization, it may need to be changed in the future. When organizations face these situations, where they want to break-away from the past and create a new image for themselves, or when they need to re-invent a product, they are faced with the barriers created by the original branding. It may be difficult to change the attitude of the people related with the brand. In addition, it may be costly, or out-rightly risky as the customers may simply stop buying the product and switch to competitors. Branding Leads To Large Investments Branding involves investments in terms of time, money and resources. These investments may be difficult to justify at the onset as there are no sure ways of knowing that a particular brand image will work or not. Further, there are costs associated with designing the total brand image related to the logos, slogans, jingle, colours, media chosen for the promotion [references] etc. These costs are later translated to activities that the organization undertakes to keep the brand alive and at the top of the customer’s mind. Disadvantages to Customers Highly Priced Brands are also associated with premium pricing and this may lead to the customers spending more for the name of the company or the brand than for the value of the product that he purchases (Schiffman and Kanuk, 2000). This is because, the brands may be evoking emotional response or creating associations with the self-image of the customer – and it is these intangible attributes of the brand that the customer tries to acquire by purchasing the product (Schiffman and Kanuk, 2000) Consumerism Branding has also been associated with the increase in consumerism and a culture of spending. People end up buying products and services that they may have little use of solely on the basis of the amount of exposure, advertising and suggestion that brands keep providing them with (Leonard, 2005). This spending often lands people into credit card debts and may also create psychological problems (Rumbo, 2002). References Aaker, David (1991). Managing Brand Equity. UK: Free Press Abu Dhabi Tourism Authority, 2009. available online at: http://www.visitabudhabi.ae/en/practical.information/telecommunication.and.internet.services.aspx retrieved on 1 April 2010 Arvidsson.A. (2005) Brands: meaning and value in media culture, london. Routledge Hamilton1, J. M., D. J. Maddison, and R. S. J. Toll. 2005. Effects of climate change on international tourism Climate Research Vol. 29: 245–254, 2005. October 17 Klein, N. (2000) No logo, Canada: Random House Leonard, H. A. (2005), ‘Consumption Fantasies: A Phenomenological View,’ Advances in Consumer Research, 32 (1), 229-230 Moor, L. 2007. The Rise of Brands. Okford: Berg Rumbo, J. (2002). Consumer Resistance in a World of Advertising Clutter: The Case of Adbusters. Psychology & Marketing, 19(2), 127-148. Schiffman L.G. and Kanuk L. K. (2000), ‘Consumer Behaviour, 7th Ed., Prentice Hall Read More