Importance of branding

Executive summary

This essay deals with the importance of brand image and brand building for companies and how they can adapt their promotional mix, in order to obtain the desired results, related to their image.

First of all, it is necessary to get to know the market environment. It is essential for one company that they know how the consumers act: what is their culture? What are their habits? Who are the competitors?

Once they have a good impression of the market, they can start building up their brand image by keeping in mind several key elements.

When a strong brand is established, the work is not over yet. The company must invest in maintaining a long term relationship with its customers. Otherwise the customers will easily switch between brands, due to the massive oversupply of different brands.

To maintain such a long term relationship with your clients you must adapt the promotional mix. Sponsorship is a perfect way to enhance your brand image and reach your desired target group.

1 Introduction

To a company, it is important to differentiate yourself from the competition. Consumers also, want to differentiate themselves from the rest. They want to be unique and try to obtain a certain level of uniqueness by identifying themselves to certain brands.

When consumers are shopping, subconsciously they will form a list with their favourite brands who are top of mind, based on what they have heard, seen or experienced. Therefore branding has become almost critical in the competitive market of today. To most important elements to build your brands are:

    Knowing your consumers and relating to them;
    building a relationship with your consumers;
    sustaining the quality of your products;
    providing a better value;
    differentiate your business from the competition.

Once you can maintain all the points listed above, your chances of having a strong brand in your product portfolio are strongly increased. However this is not a guaranteed success, because consumer behaviour change rapidly. (Mele, n. d.)

The world keeps on evolving every day. So does the market and the consumers. That is why a company has to build up a strong brand and a good image, in order to survive in this fast changing world.

Several factors, such as: the increased standard of living, increased mobility of consumers and the globalisation of media, also have a huge impact on how companies must act. (Craiga and Douglas, 2000)

They must identify their customers, getting to know them and adjusting the brand image in order to build and maintain a long term relationship with them.

2 Market environment

The market environment keeps changing on a daily base. Mainly this is because of the changing economy, that has an impact on companies and consumers.

Companies can approach the market in two ways: ” market driven” or ” market driving”. Market driven is when they react to the consumers needs and adapt their offer, while when a company is market driving, they conduct a more pro-reactive approach which implies leading customers and reshaping markets. (Tarnovskaya, Elg and Burt, 2008)

It is impossible to control all factors that affect the market, but a company must be aware that little changes can help to influence how the main public perceives a brand. When a company takes in a clear position, it can differentiate itself from the rest and will attract a certain part of the market.

When the market is changing, companies should also be thinking of rebranding their brand or company image. But lots of companies are afraid of changing their strategy. However when a change is well planned and is executed on the right moment, it can be an very effective tool to gain an advantage on the competition. (Spaeth, 2010)

When a company is active on a world level, they also must keep in mind different factors such as the demography, cultural differences and economic differences. (Leeflang and van Raaij, 1995)

Once a company has a clear view on the market and its player, they can adapt their products to the consumers’ needs, in order to try and create a strong brand.

3 Building a brand

Strong brands help companies to enhance their image towards the consumers and are also important in order to differentiate en protect yourself from the competition.

Some key functions of a brand:

    Establish an identity for the company’s products;
    serve as a symbol that is easily recognized by the customers;
    guide and simplify consumer choice;
    differentiate one product offer from another.

(Craiga and Douglas, 2000) Retailers also begin to know the strengths of brands. Store brands are gaining popularity since more and more retailers understand that the consumer is not that loyal to certain brands as presumed. Price and convenience are two important elements (especially with fast moving consumer goods).

Retailers have the power to place their own brands at good, visible places in the store. Also they are able to sell at a very low price. For instance Sainsbury-Cola costs around 28% less than the Coke from the brand Coca-Cola and won 15% of the British Cola market in just two years. (E., Steenkamp and Dekimpe, 1997)

Due to the introduction of strong retailer brands, established companies have to increase their efforts to gain new clients and keep their existing ones.

4 Consumer behaviour

The customers are the most important part of a company, because when they do not buy your product, your company will not make profit. Consumers now trust more in individuals than advertising. Before they want to buy a new product, they mainly rely on the opinions and experiences of others, like friends, family and colleagues. They will ask them for help and recommendations. Also they want to be more involved with the brands and products they consume. The consumer behaviour changes over the years and now consumer authenticity is of major importance. (Needham, 2010)

Consumers do not only want services or goods. Their behaviour has changes due to the large range of high quality products and services that is offered to them. They want more experiences that engage them in a personal way. They will relay to a brand, instead of just looking at the product or service itself. (Pine and Gilmore, 2010)

4. 1 Consumer authenticity

    Natural authenticity: Natural products, not artificial or synthetic.
    Original authenticity: Original design, not a copy or imitation.
    Exceptional authenticity: Adapt a product to the unique will of a customer, mass-customization.
    Referential authenticity: Referring to a wider, historical context.
    Influential authenticity: Calling people to a higher purpose.

(Pine and Gilmore, 2010) To reach such a segment of the consumers, a company has to take in a clear position and only focusing on that niche of the market.

4. 2 Brand experience

Brand experience are the feelings, cognitions and behavioural responses that consumers have towards a certain brand. It does not only occur when they consume the product, but also when they search it, when they go shopping and the service they receive. (Brakus, Schmitt and Zarantonello, 2009)

A company has to keep in mind all those elements, in order to offer the customer the best experience possible.

A good example of a brand that strongly believes in brand experience is Harley-Davidson. This American motorcycle-brand has users over the whole world and has a large group of followers who believe that when you drive a Harley-Davidson, it feels like a whole experience. This is why the Harley-bikers often form groups and go to meetings. There they want to share their experience with other users. A large social group called HOG (Harley-Davidson Owners Group) has more than one million global users. Membership comes only with the ownership of a Harley-Davidson (first year is for free, if you want to stay a member, you have to pay).

Through this huge community, and there are thousands more, the brand ” Harley-Davidson” will never go away. This way the brand experience has become an important tool for the marketing decisions (Schembri, 2009)

4. 3 Brand community

A brand community can be defined as a mix of relations, where the consumer is central. The most important relations are the ones between the consumer and the brand, the company, the use of the product and among the other users of a certain product. Through those communities people share essential resources that may be cognitive, emotional or material in nature. (McAlexander, Schouten and Koenig, 2002)

Nowadays those communities are especially rising online. On popular social network sites like Facebook, there are millions of communities of certain brands. But a online community can be either positive or negative for a company. There are lots of examples of communities on Facebook that spread negative images certain matters. This is because the easiness of giving one’s opinion through the Internet. In just a matter of seconds, one person can reach the whole world. Whether his or her opinion is true or false, positive or negative, it will be spread by the Internet and possibly be read by millions of users. (Geist, 2007)

As a company it is impossible the control the content of what is being said over the Internet, but they must be active on all sorts of online media, in order to know what is going on, to stay in touch with the market.

A brand community is the perfect tool for a company to create long-term relationships with their clients. There are two types of communities: a social one and a psychological one. The social one is where admirers of a certain brand engage social relationships with each other, while a psychological community is a group of admirers who perceive a sense of community with other users, but without the social interaction. (Carlson, Suter and Brown, 2008)

Bearing this in mind, it is very important for marketers to identify, interact and keep up with those groups, in order to maintain a good relation with the customers.

5 Use of promotional mix

When a company identifies itself with a certain image or cause, it has to adapt his promotional mix, in order to reach his target group. But they have to keep in mind that the media or content has to be consistent with the brand image. This way one can be sure that they will reach the desired group. (Erdogan and Kitchen, 1998)

First of all a company has to take in a proper position. Then they have to look at their customers, get to know who they are and why they buy your products instead of those of the competition.

Once they have identified all the necessary data, they have to adapt their promotional mix on a way that it still reflects on the company image.

They can do this on several ways like sponsoring certain events, publishing ads on diverse media, and so on. The most important thing is that their message arrives at the right persons.

Sponsorship is the ideal way to send a clear message to the consumers and to reach your target public. It is a great opportunity to enhance your brand image, because the perception of a brand is linked with the consumers’ experience with the brand. That is why the decisions of sponsorship have to be investigated carefully. (Cliffea and Motion, 2005)

6 Conclusion

Due to the constant changes of the market and the consumer behaviour, it is of major importance that companies keep in touch with the market. They must try and build up long term relations between their customers and try to increase the loyalty.

But companies have to keep in mind that, sometimes, it is better to reposition your brands as a reaction to the changing market. The environment, for example, has become a great public concern. That is why lots of companies try to position themselves as ” green” companies. Even polluting petrochemical companies like ” BP” try to change their image to a environmentally concerned company.

Once a good relation has been established with the consumers, a company must put a lot of effort into sustaining that relationship. Because consumers preferences can quickly change and their loyalty to a certain brand can disappear in no time. The exclusive clothing brand ” Abercrombie & Fitch” has experienced a negative impact because of not adapting their image during the financial crisis of 2009. The biggest part of their target public are teenagers. But due to the recession they have lost lots of customers, because they never changed their prices (while the competition dropped theirs) and people were not willing to pay that much for clothes. (McDevitt, n. d.)

However, Abercrombie & Fitch is also a good example of a company with a good brand image. They sell their clothes only in selected stores on exclusive places and at very high prices. But still they have a huge market. For instance their store in London: they don’t make that much publicity, the store is difficult to find and the prices in Europe are sometimes double of what you should pay in America. (Poulter, 2007) But yet, there is sometimes a queue to just enter the store. Once you enter the store, it is not just a store, but a real experience.

If a company wants to keep existing, it is essential that they try to build up a strong brand and maintain a good long term relationship with their customers. Because, due to the overload of products, the consumer can easily choose between several brands.

7 References

Brakus, J., Schmitt, B. and Zarantonello, L. (2009) ‘Brand Experience: What Is It? How Is It Measured? Does It Affect Loyalty?’, Journal of Marketing, May, pp. 52-68.

Cliffea, S. J. and Motion, J. (2005) ‘Building contemporary brands: a sponsorship-based strategy’, Journal of Business Research, p. 1068- 1077.

Craiga, S. C. and Douglas, S. P. (2000) ‘Building global brands in the 21st century’, Japan and the World Economy, pp. 273-283.

E., J.-B., Steenkamp, M. and Dekimpe, M. G. (1997) ‘The Increasing Power of Store Brands: Building Loyalty and Market Share’, Long Range Planning, December, pp. 917-930.

Erdogan, Z. and Kitchen, P. (1998) ‘Managerial mindsets and the symbiotic relationship between sponsorship and advertising’, Marketing Intelligence & Planning, pp. 369-374.

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McAlexander, J., Schouten, J. and Koenig, H. (2002) ‘Building Brand Community’, Journal of Marketing, January, pp. 38-54.

McDevitt, C. Abercrombie & Fitch Loses Its Cool, [Online], Available: HYPERLINK ” http://www. thebigmoney. com/articles/after-fad/2009/04/10/abercrombie-fitch-loses-its-cool? page= full” http://www. thebigmoney. com/articles/after-fad/2009/04/10/abercrombie-fitch-loses-its-cool? page= full [19 March 2010].

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Needham, A. (2010) ‘It’s all about the consumer, stupid’, Market Leader, Q2, p. 17.

Pine, J. and Gilmore, J. (2010) ‘In search of authenticity’, Market Leader, Q2, pp. 52-54.

Poulter, S. (2007) The trendy US gear that costs double over here, 6April, [Online], Available: HYPERLINK ” http://www. dailymail. co. uk/news/article-446004/The-trendy-US-gear-costs-double-here. html” l ” ixzz0ijiCj5XY” http://www. dailymail. co. uk/news/article-446004/The-trendy-US-gear-costs-double-here. html#ixzz0ijiCj5XY [19 March 2010].

Schembri, S. (2009) ‘Reframing brand experience: The experiential meaning of Harley-Davidson’, Journal of Business Research, p. 1299-1310.

Spaeth, T. (2010) ‘The Identity Recession’, The Conference Board Review, pp. 21-27.

Tarnovskaya, V., Elg, U. and Burt, S. (2008) ‘The role of corporate branding in a market driven strategy’, International Journal of Retail & Distribution Management, pp. 941-965.