If you as a company tell me that you have a brand name, Im going to ask you a question: Do you have the power to charge a higher price for the same product? If your answer is no, I dont think you have a brand. You may think you do, but I dont think your brand has any value. Despite this very narrow interpretation, marketing literature describes the many other benefits associated with strong brands: Customers can identify products quickly in a retail environment, especially if the brand has a strong visual identity or logo. Brands provide multiple sensory stimuli to enhance customer recognition. A brand can be visually recognised from its packaging, logo, colour and shape. It can also be recognised through sound, such as hearing the name on a radio or TV advertisement or through conversations with other customers who talk about the brand. Increased revenues and market share are based on brand loyalty and positive brand associations. Loyal customers are less likely to switch to competitor brands. Decreased price sensitivity (low price elasticity of demand) - customers are prepared to pay a premium price for a perceived additional benefit of the brand over its competitors, which should lead to increased profitability. Suppliers and manufacturers will have a stronger negotiation position with retailers who know the brand will add to their image and generate reliable sales. As a result a high price may be charged and maintained. Increased shareholder and asset value as a result of the intangible value of the brand; the value of this brand equity can be realised by selling or licensing the brand. A shared vision among stakeholders focusing on the brands values, and an increased capacity to motivate the workforce. Increased ability to extend the brand into new product and service categories. There are lower risks associated with introducing new products under the same family brand, as they are already recognised by customers. Increased ability to attract and retain high quality employees who like to be associated with a successful brand (and therefore organisation). A brand tends to have a much greater longevity than a product - a brand can be transferred to a related and updated product or version. A brand should offer a shorthand summary of all the information customers hold about the product. When customers associate benefits, especially emotional benefits, with a particular brand, it gains significant competitive advantage. Customers trust brands because they know what to expect.
Posted on: Fri, 14 Mar 2014 14:20:33 +0000
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