Wednesday, 4 December 2013

Why Branding?

A brand offers instant product/company recognition and identification. Consumers identify branded products and, because of effective advertising, have faith in product quality. Retailers like branded products because they increase their profitability — buyers attracted to branded products spend three to four times more on products than do buyers of unbranded products.
Branding provides four key benefits to you as the manufacturer:
  • Product differentiation. A brand provides a clear and definitive reason for customers to buy your product. If this reason does not exist, your product is a commodity and the only measure of value is price. Small, value-added businesses cannot compete on price successfully and need to incorporate some form of differentiation.

  • Perceived value. Consumers and influencers perceive branded products as higher quality, more reliable and a better value than unbranded products. Generally speaking, the number-one brand in a category can command a 10 percent price premium over the number-two brand, and a 40 percent premium over the small brand. This price premium is known as a brand tax. Consumers understand that a strong brand can reduce getting stuck with disappointing or faulty products.

  • Brand loyalty. Brand loyalty is the recurring stream of profit generated by repeat and referral sales of a specific brand. Repeat sales can be as much as 90 percent less expensive to a company than new customer development.

  • Pride in the product. Branded, recognizable products build a sense of pride in those associated with production, promotion, sale and distribution of those products.
The above related to Ceramic Industry. Let us say one company X has developed a Brand Named MyTile. The brand developer puts some amount into building the brand on a regular basis. He also educates his distributors about his product, benefits and with proper advertising and promotion relates the product with the brand. He develops relations with the Architects and interior design specialists in promoting product with the brand. He sees to it that his every package, outward communications, presentation, web site, all promotes the brand with the product. His every marketing activity also involves the brand.
His neighboring manufacturer does not create a brand. But he too educates his distributors, talks to designers, promotes benefits of his products develops networks as well. The same process minus a brand name is carried out. He saves some money on advertising.
Now, If the same designers or distributors are asked what tile brand come to the mind, 90% of the times, they will say MyTIle because the second manufacturer did not have any name or BRAND attached to the product.
Who will Get repeat Sales…MyTile. Who will get better referrals..MyTile. Who will get immediate Buyer preference MyTile.
Here are just a few benefits you will enjoy when you create a strong brand:
  • A strong brand influences the buying decision and shapes the ownership experience.
  • Branding creates trust and an emotional attachment to your product or company. This attachment then causes your market to make decisions based, at least in part, upon emotion-- not necessarily just for logical or intellectual reasons.
  • A strong brand can command a premium price and maximize the number of units that can be sold at that premium.
  • Branding helps make purchasing decisions easier. In this way, branding delivers a very important benefit. In a commodity market where features and benefits are virtually indistinguishable, a strong brand will help your customers trust you and create a set of expectations about your products without even knowing the specifics of product features.
  • Branding will help you "fence off" your customers from the competition and protect your market share while building mind share. Once you have mind share, you customers will automatically think of you first when they think of your product category.
  • A strong brand can make actual product features virtually insignificant. A solid branding strategy communicates a strong, consistent message about the value of your company. A strong brand helps you sell value and the intangibles that surround your products.
  • A strong brand signals that you want to build customer loyalty, not just sell product. A strong branding campaign will also signal that you are serious about marketing and that you intend to be around for a while. A brand impresses your firm's identity upon potential customers, not necessarily to capture an immediate sale but rather to build a lasting impression of you and your products.
  • Branding builds name recognition for your company or product.
  • A brand will help you articulate your company's values and explain why you are competing in your market.
We are sure the above article will help you decide whether branding is for you or not.

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