Branding and its Implications…

(Posted by Abdullah and Subham Singh)

How branding is important

Branding goes way beyond just a logo or graphic element. When we think about a brand, we really want to think about your entire customer experience. Everything from your logo, website, social media experiences and customer interaction.  In short, your brand is the way customer perceives the organization.  It is critical to be aware of our brand experience and have a plan to create the brand experience that we want to have.

Impact on consumer

Brand image affects consumer behaviour through its influences on the consumer decision-making process. It affects the cognitive and affective components of consumer’s attitudes. Therefore positive brand image will influence the consumer evaluation and purchase intention to form a positive attitude towards a particular brand. In addition, the congruency of brand image with consumer self-concept enhances consumer preferences for that particular brand.

However, in an article by Guardian[i], despite the general belief of consumers that branding can have a positive image, it is failing in many cases. In an age of transparency and empowerment, brands are not meeting people’s requirements. People expect large companies to be involved in social problems and their quality of life but companies are not delivering on this new social contract. Two for one promotions aimed at trying to keep loyalty cannot last over the medium term[ii].

Market implications

Marketing strategies varies with industries and their targeted customer. For example, a company manufacturing cooking oil or bread will depend heavily on its distribution channels to sell its product to consumers. More investment for marketing should also account for off-premise sales staff to help customer experience and buy the product.

However, for industries like electronics, cars etc. which can be distinguished as a high involvement products, consumers will perceive brands in a different way. Along with the overall value, they might be more interested with the perceived social value of the product. In such cases, organizations will have to invest heavily on promotions and advertisement through television and other mass media channels.

Coco cola, however being a low involvement product, is among one of the highest brand by value according to Forbes[iii]. As per the latest report, $3266 is the yearly spending against Pepsi’s $2400. However, to attract customer, coke has adopted a different strategy such that it becomes synonymous to carbonated beverage. More focussed on attitude and emotion value of its customer, they had a huge success over their competitors.

Take a look at this interesting video.

 Brand and perceived quality

Olson’s (1977) review noted that the effect of brand name generally was strong in the price cue literature, appearing both as a main effect and as an interaction effect. However, a review of the six studies that examined both price and brand effects reveals a lack of a consistent and clear relationship. Certainly there are differences in the types of products utilized, the price manipulations, and the brand manipulations offers plausible reasons for the mixed outcomes. Monroe and Krishnan (1984) observe that brand name information dominated price information in the perception of quality. However, they discovered that price had a more positive effect on product quality perception when brand information was present than when brand information was absent. This finding suggests that the interaction of price and brand information not only is strong, but that the influence of price on quality perception becomes stronger in the presence of brand information than by itself.

Fun Facts

Jaguar Land Rover is an iconic car taken over by Tata Motors. However, the brand name was not changed due to its equity value and recognition among people.

Puma sportswear came about thanks to a fight between brothers

Inside an air-raid shelter in World War II Germany, another battle came to a head. Brothers Adolph – also known as Adi and Rudolf Dassler – had been working together for years, selling shoes and sporting equipment, but the relationship had deteriorated. The presence of Rudolf and his family elicited a snarky remark from Adolph when they entered the bunker, and later, Rudolf was picked up by the American forces, accused of being part of the Waffen SS. He was convinced this was Adolph’s doing, and when he was released, they split their company, Dassler Schuhfabrik, with Rudolf moving across the river. The two companies that were formed are leaders in the sportswear industry today – Adidas (ADI DASsler) and Puma (Changed from Ruda, which stood for RUdi DAssler).

Procter & Gamble wouldn’t have existed if the founders had decided to stay bachelors

Englishman William Procter and Irishman James Gamble were destined to be at odds. From historically warring countries, they both settled in Cincinnatti, Procter as a candle maker and Gamble as a soap maker. They had to compete for the same materials, and the success of one would likely lead to the failure of the other. Love, however, has a way of working things out.

Both married into the Norris family, Procter to Olivia and Gamble to Elizabeth. The father of the Norris sisters, Alexander Norris, arranged a meeting between the two and convinced them to go into business together. Out of this union came Procter & Gamble, now one of the largest companies in the world – one that wouldn’t exist if not for the founders marrying sisters.

The economy of McDonald’s would make it the 68th largest country in the world

The scope of McDonalds is hard to fathom. It is the most successful fast food franchise in the world, present in more countries than any other fast food company. The company has learnt to adapt to every market it enters, and is currently the second most recognized company in the world, trailing only Coca-Cola. Nothing speaks more to the power of McDonalds than the economy it has developed encompassing its customers, suppliers, employees, and real estate ventures. If McDonalds were a country, its economy would place it 68th in the world, just ahead of Sri Lanka.

References:

[i] http://www.theguardian.com/sustainable-business/consumers-brands-positive-impact-failing

[ii] Amy du Pon, head of strategic planning at Havas, told the Sustainable Brands conference in San Diego

[iii] http://www.forbes.com/powerful-brands/list/

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11 thoughts on “Branding and its Implications…

  1. In response to your first paragraph, I think some products are so big they surpass the brand. Take coke for instance. You automatically assuming I’m talking about Coke-a-cola and not Cocaine, which I am. I don’t know what the company website looks like, I don”t know what the plant or how its made, I don’t know who the CEO is, I don’t know what other products they make, but I do know what the colours are, the shape of the bottle/can and the taste. I see coke product as being bigger then the brand because if they are trying to sell me anything other then the product, I just cant see it.

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  2. I like your comment increasing transparency & how consumers are expecting companies that manufacture products they purchase or relate to, to reflect contemporary concerns & attitudes, and how this can be both positive & negative. For example a large chain that prides itelf as a healthy alternative, has palm oil in it’s cookes. One of my daughters is a bit of an activist & because rainforest is being destroyed to make way for palm oil plantations she has boycotted this particular franchise, not just products containing palm oil. Consumer sentiment ebbs & flows in line with various issues, byt how many people are serious about voicing their opinion by not buying a particular product or brand because of the companys stance on a particular political issue?

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  3. Coca-Cola certainly is an interesting brand to examine. It will be interesting to see how their new product is received by their loyal customers as the new product ‘Coca-Cola Life’ has a very green and seems to convey an almost ‘natural’ angle – https://www.coca-cola.com.au/cokelife.
    The new product appears to have a ‘family’ theme to it, which is very similar to the movie you published above, see https://www.youtube.com/watch?v=yRqUTA6AegA.
    I would imagine most consumers of coca-cola will give it a try. According to Michelle Herbison of marketingmag.com.au, ‘Coca-Cola Life’s lower sugar level is part of the company’s 2013 commitment to address obesity in Australia by offering more low-kilojoule beverage options’.

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  4. Thanks for the post guys. I guess i know there is a McDonalds ahead when i see a big yellow “M” on top of any building or office. That is how a person defines the value of a brand. Some company logos have become so famous that you do not need to think when you see the, you just smile from inside and feel that you just savedsome great amount of time in selecting a brand for your specific product. But as @ayaseen2015 and @sspandit posted, it is not just a logo or a symbol which defines a brand or a product,it takes sheer hardwork, innovation and strategy all together to build such a rapport. You deteriorate the quality one day, and every big brand can fall. You stay alongside to consumers , they will trust you. You change your track, consumers could ditch you for a new brand. Its like every relationship, trust and building more trust helps it stay longer.

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  5. Hi

    Is the intangible value of the brand, overall quality, reflecting the comprehensive strength. Strong brands bring considerable market share, resulting in a good social and economic benefits. Create their own brands, to win the final realization of the brand-market brands are determined by the consumer, the consumer’s choice often determines the fate of a brand. Therefore, the study of the psychological effects of the consumer brand for brand marketing have an important role.

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  6. interesting post. it reminds me of a little scenario for you. You’re doing a bit of shopping. Let’s say you’re on the hunt for a necklace for that special loved one. You look in the window, and see two necklaces. Both are beautiful, sparkling and bedecked with sumptuous jewels that make your soul sing.

    One is a Tiffany. The other is an unknown. The Tiffany is $500. The unknown is $300.

    You know deep down inside that logically you should go with the unknown and save yourself $200. Yet you feel strangely compelled to go with the Tiffany. After all, as they put it themselves:

    “Since 1837 the masterpieces of Tiffany & Co. have defined style and celebrated the world’s great love stories.”

    I know I would also go for the Tiffany. Brand Equity is so powerful!

    Building brand equity requires consistency in messaging, with quality associations that last. The brands you know and love have spent billions of dollars cultivating their own plotspace in the hearts and minds of their public.

    It starts with an exciting message, a unique style and a compelling identity – all attached to a great product.

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    • Thanks an interesting comments. Ya I even felt that,though it saves money with unknown brand, but the personal satisfaction and fearless or trustworthy products can be made through brand. After buying the product if its not even having proper service facility; entire money will be a loss. That’s the true fact and brand gives us some kind of confidence within our self.

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  7. Interesting blog.Lots of trivias. Brand name does go a long way in assuring a significant part of sale. We do trust some brands blindly but in this era of easy information and conscious consumer if a brand doesn’t keep reinventing itself, and does not conform to popular ideas and views, it takes no time for start ups to take over. Brand or no brand, today you have to be on your toes to remain significant.

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    • I can agree with some extent, but Its depends on the type of goods like if we talk about electronics that’s true at least and if we talk about highly influenced product like food, cosmetics products which cannot changed its nature or pattern must be recognized through brands. Even you cannot trust and blindly buy the non-recognized brands. Still i feel lots of difference in buying clothes from K-Mart and Kathmandu (on looking the quality not the price).

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  8. Good post! I think a good brand must establish a greater awareness in the minds of customers!When people see the first time the brand will be able to know what it is, and then to choose. Even if the customer does not buy, but the awareness of the brand in the minds of customers gradually accumulate.

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