One of the most common conception of marketing is branding. Whether it be a company or individual, it distinguishes the entity. I’m going to be breaking down branding strategy.
Branding is the name or design meant to identify products and to differentiate the product line against competitors and encouraging price inelasticity. Many times, companies would trademark their logo to protect their company’s branding. The advantages of branding to the buyer is to facilitate shopping, guide to quality, and satisfy status needs of self esteem. The advantages of branding to the seller is to facilitate repeat purchases (from buying behavior), aid intro to new products, and as a means of product differentiation. A company’s brand can go through four levels of brand familiarity. The first is non recognition of the brand due to the lousy brand name or because it is a homogeneous product like tissues being overshadowed by Kleenex. The second is brand recognition which means the product line is recognized but not a go to brand just yet. The third is brand preference that means the product line is the customer’s go to brand when applicable. The fourth and last is brand insistence which emphasizes that the customer will go out of there way to ensure they are purchasing a product with this brand and a good example is Apple.
The top five brand names are Apple, Microsoft, Google, Coca-cola, and IBM according to Forbes. There are many criteria for a good brand name. The first is that is provides maximum promotability. Promoting this brand should be easy, suggest its benefits, be distinctive, and have no negative connotations. The second is that it has minimum risk of loss of ownership due to infringements and it isn’t a generic term like aspirin. Conflicting criteria to the aforementioned risk to avoid can be utilizing promotable products that can be so popular that it becomes a generic term. When posed with such risks however may be registering the brand as Trademark (Canham Act of 1946) and educating the public not to miss use Trademark’d brand names. An example I used before was Kleenex and companies who sell tissues should educate the public that all tissues shouldn’t be referred to by the Kleenex trademark’d term.
The strategy of branding is essentially to create a stimulus response for the buying behavior process of customers. The first strategy of branding is a process called family branding. The advantage is to create a generalization effect which aids the introduction of new products by generalized cues and responses to buying products. The disadvantage is the dilution of brand value if family branding is over used. Individual branding is another strategy which emphasizes products as self defining. The advantage is that it creates a sharper image of the product but the disadvantage is that it builds greater promotional costs. Some retail companies have the option of pursuing manufacture brands or private brands like Safeway Select. The advantages of manufacture brands is that the retail company can avoid promotion costs but the disadvantage is that there is a higher unit cost. The advantage of private brands is product differentiation at the disadvantage of allotted promotional costs.
Companies should be well aware of the branding of their company as if done correctly the company can leverage price inelasticity of its products. A company who is well known for high price inelasticity is Apple as millions of customers are well and willing to spend high amounts for the premium brand.
