A brand is something more than a name – it can be one of the most valuable assets a company possesses. In today’s world where brands mean everything, the Shakespearean quote “What’s in a name? That which we call a rose by any other name would smell as sweet “, would mean nothing. This can be proven by the fact that in the early days when Pepsi entered the market the Coca-Cola Company, afraid, changed its name to 'new coke' thinking it would bring new interest and block all chances of Pepsi taking any market share. Instead 'new coke' was decimated as a brand which eventually let to the reverting of the original Coca-Cola name that we all still love.
When we buy something we like to think that we know the reason why. We move through the world thinking that we are in control of our actions and the decision to purchase something is no different. We think we bought the new product because it has the best features best price or the best look. But as research from neuroscience, psychology, and behavioral economics has shown that, we humans are not rational as nearly as we think. Instead we are driven by subtle unconscious influences.
The branding process uses these unconscious influences to create an image of trust and reliability. It builds a feeling towards the brand in a consumer's mind. This feeling is built over time by every interaction people have with a brand- where they see it, whom they see it with, its colors and emotions that the name inspires. This means that every part of the business that a consumer is exposed to - from how the products are distributed to the company's culture and people - influence a consumer's gut feeling towards the brand.
Brands create a public perception of the product. This perception in public minds is what spreads and influences sales and even trust and reliability of a product or company. Perception, the unconscious or feeling of a brand can create a unique ‘fantasy’. This fantasy is the brands collection of associations that together form the gut feeling in consumers’ minds and can impact whether they purchase a product from a particular company or from it competitor
A brand has the power to make or break a product or company. The market and economic world is replete with examples where a brand has proved meritorious or its antithesis. For example, brands that have major connect with people in the Indian market in their range of product are Colgate in toothpaste, Maggi in noodles, Tata in motor vehicles. These brands define their product range to such an extent that Colgate is a collocal for toothpaste itself.
When Maggi was accused of using more than the prescribed use of lead in its noodles and production stopped, people still trusted the brand. On coming back, Maggi still has the largest market share. On the other hand, Patanjali noodles couldn’t capture the market share it had hoped to due to improper branding. Harping on another brand's perceived failure was more or less its brand. It failed to influence the consumers gut feeling and win over trust.
Luxury brands in clothing, toiletry and motor vehicles create a fantasy and a scenario of uber living and lifestyle that people love to have a slice of. Brands like Levis, Versace, Armani etc. command trust, provide value and give an impetus to consumer’s fantasy.
Brands signify quality and inspire confidence. For a consumer with limited disposable income, the potential loss from an under performing product is magnified. As a result they are often hesitant to take a risk on a product that might not live up to the expectations and sometimes are willing to pay more for the brands they trust. Luxury brands that provide value use this principle. They add brand value to a product. For e.g., The founder of Oneplus the Chinese phone maker, Carl Pei said that the manufacturing cost for the company's phones and that of Apple and Samsung are more or less the same but Oneplus charges less because of its different business model. This different business model doesn’t include brand value. Phones of Apple and Samsung command a premium for their brand. Proper branding like these increases the cost value of a product. Branding gives this power to products and companies as well.
Branding on the other hand, can be costly and time consuming. Hence, it is advantageous for established brands to lend their name to a new item in the same category through extensions. New brands or companies pay a premium or royalty just to have an established brand endorse their business. This is seen in the reality and entertainment industries. For E.g., Hoteliers and Realtors pay royalties just to have the Trump name on their projects. These are called brand deals which immensely increase the value of a brand and in turn the product itself.
A brand hence, represents the sum of people’s perception of a company, its product, its customer’s services, reputation, advertising and logo. When all of these parts of the business are working well, the overall brand tends to be healthy. On the flip side, a company that offers excellent products or services, can tarnish its brand due to poor customer service.
The importance and power of brands can be summed up in the following 6 points.
1) Branding improves recognition. E.g.- McDonald, Nike.
2) Branding creates trust.
3) Branding supports advertising.
4) Branding builds financial value.
5) Branding inspires employees
6) Branding generates new customers.
In conclusion, a brand is something that mobilizes people, creates trust and inspires value. Hence, proving important and powerful a tool for business.
(This is an essay I had submitted for the 'Altina Essay Contest 2016')
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