Helping Mid-Tier Advertisers Create Profits With Paid Ads
article //

The Importance of Branding

Branding is more important than ever in today’s digital world. Creating a strong brand conveys credibility, quality and experience. Products have life cycles, but brands outlast products and many companies actually list the value of their brand as a tangible asset on their balance sheet. Branding is basic, fundamental, and is essential for building value for small companies as it is for large corporations.

When CocaCola bought Suja Juice, when MillerCoors bought Saint Archer Brewing Company, and when Billabong bought Nixon Watches, none were buying products or services, they were purchasing popular and respected brands. A brand represents the consumer’s entire perception of a company, from its reputation to its logo. When all the parts of a business work well, the company’s brand is typically healthy. Conversely, practically everyone can think of a company that provides excellent services or products, but has a damaged reputation due to terrible customer service.


Why Branding is Important to Companies

The most successful businesses, regardless of size, all have the same thing in common, they have all established themselves as a leader in their industries by creating a powerful brand. The best brands have a remarkable ability to break through the consumer’s wall of indifference and create brand and product desire. As an example, the turnaround of almost defunct Chrysler Motors relied on marketing and advertising to create a new and powerful brand that became recognizable around the world. Here are some examples of how branding provides value to companies:

Generate New Customers

    . Branding enables a company to obtain referral business. It wouldn’t be possible for one customer to tell a friend about a great new pair of shoes if the consumer couldn’t remember the brand. The main reason the word “brand” is used to identify how a company is remembered is because the goal is to make an indelible impression on the consumer. As the most effective and profitable advertising source, word of mouth referrals demonstrate a company has been successful in providing a memorable experience for the consumer.

Establish Trust

    . A professional appearance creates credibility and trustworthiness. As buying decisions are often based on emotional reactions, consumers are three times more likely to purchase from a company that presents a polished presence.

Improves Recognition

    . A major component of brand recognition is the company logo. Consider how instantly recognizable the “golden arches” are. A professional logo can be a simple design, but still be powerful enough to create instant recognition.

Supports Marketing and Advertising

    . Advertising is a crucial component of a business’s brand. With too narrow of a focus, the business risks losing its ability to expand into new markets; with too broad a focus the company will typically fail to establish a definable impression with consumers.

Builds Monetary Value

    . The greater the commitment to building its brand, the greater its financial returns. For example, publicly-traded companies are typically valued at several times the worth of their actual hard assets, and much of this value is the result of the branding. For example, The Trump brand has been valued at anywhere from $35 million – $3 billion (given by Trump himself).

Inspires Employees

    . Many employees need something to work for, besides just a paycheck. When a company’s employees understand its mission they are more apt to feel a sense of pride for the both the company and their job.


Why Branding is Important to Consumers

Brand Equity” is defined as the positive effect the brand name has on consumer response to a product or service. Consumers will normally have a choice of products in the same market sector. High brand equity results in consumers demonstrating a preference for one product over another, even when the products are essentially identical. If the preference, or perceived value, is strong enough, the consumer is even willing to pay more for their preferred brand. Consumers view brand equity from three positions:

    ● The consumer will determine the price difference one brand commands over another.
    ● Brand equity benefits are the result of the intrinsic value a consumer places on a brand.
    ● A strong brand will increase the consumer’s attitude towards any products associated with a brand.


Brand loyalty has been defined as the extent that consumers are faithful to a particular brand, expressed by repeated purchases, regardless of marketing pressure generated by competitors. Consumers like to feel a sense of loyalty to a particular company, that is why most people tend to always shop at the same supermarket, buy the same brand of gasoline and stay at the same hotel chain. Many businesses have tapped into the psychology of brand loyalty by offering “loyalty cards” that provide consumers with additional benefits, like discounts on purchases. Brand loyalty has been said to be the ultimate goal of marketing.


How Branding Benefits Both Consumers and Companies

Many companies have one team to handle brand equity and another to deal with customer service. However, opportunities to boost brand value can be lost if the two teams don’t communicate. The relationship between creating strong brand equity and having top-notch customer service is indisputable. As such, the key to creating customer commitment and sustained financial success is effective management of the consumer experience. Here are some of the major benefits of a strong brand to both consumers and companies:

    ● A strong brand works to create customer recognition. This means when consumers shop for a specific product or service they will first consider the most well-branded companies. This is because consumers feel much more comfortable choosing something they are familiar with over anything they are not.
    ● A company’s brand is what differentiates it in the marketplace. When consumers recognize and back a brand it helps give the company a competitive edge. The more recognition a brand receives the more consumers it attracts and becomes more competitive with similar well-known brands.
    ● As a simple matter of trust, and loyalty, when a company with a strong brand introduces a new product it typically receives a much warmer welcome by consumers. In fact, consumers even excitedly anticipate new products being released, such as with every new generation of iPhone.
    ● Consumers are highly loyal when they feel a company shares their values, as it builds an emotional value in the customer’s mind. When a company has a strong brand it helps to convey its values to the consumer and creates that emotional connection.
    ● Enhanced credibility benefits both the company and the consumer. As credibility and parting with their hard-earned dollars goes hand-in-hand for the consumer, credibility has a direct relationship on the consumer’s willingness to buy.


The bottom line is, consumers want to do business with companies they know, like and trust.