Advantages and Limitations of Branding

Name Roll No.

Natasha Borkar 04

Pranav Gogwekar

Swapna H.

Gauri Kulkarni 19

Omkar Sakpal 31
Definition of Branding:

Entire process involved in creating a unique name and image for a product (good or service) in
the consumers' mind, through advertising campaigns with a consistent theme. Branding aims to
establish a significant and differentiated presence in the market that attracts and retains loyal
customers.

Meaning of Branding:
Branding is the process of creating distinctive and durable perceptions in the minds of
consumers. A brand is a persistent, unique business identity intertwined with associations of
personality, quality, origin, liking and more.

Advantages of Branding:

1. Memorability
2. Loyalty
3. Familiarity
4. Premium image, premium price
5. Extensions
6. Greater company equity
7. Lower marketing expenses
8. For consumers, less risk
9. Makes Purchasing Easier
10. Brand Recognition
11. Brand Advocacy
12. Brand Effectiveness
13. Creating message
14. Create a place in market
15. Setting an image

Brand Limitations

What are the Limitations of Branding?

1. Cost
2. Impersonal
3. Fixed Image
4. Timescale
Advantages of Branding:

1. Memorability: A brand serves as a convenient container for a reputation and good will. In
addition to an effective company name, it helps when people have material reminders reinforcing
the identity of companies they will want to do repeat business with. Memorability can come from
using and sticking with an unusual color combination. Develop your own identifiers and nail
them to your company name in the minds of your public. Eg. Nike, Vodafone etc.

2. Loyalty: When people have a positive experience with a memorable brand, they're more likely
to buy that product or service against the competing brands. People who closely bond with a
brand identity are not only more likely to repurchase what they bought, but also to buy related
items of the same brand, to recommend the brand to others and to resist the lure of a competitor's
price cut. The brand identity helps to create and to anchor such loyalty.

3. Familiarity: Psychologists have shown that familiarity induces liking. Consequently, people
who have never done business with you but have encountered your company identity sufficient
times may become willing to recommend you even when they have no personal knowledge of
your products or services.

4. Premium image, premium price: It can lift what you sell out of the realm of a commodity,
so that instead of dealing with price-shoppers we have buyers eager to pay more for our goods
than for those of competitors. The distinctive value inherent in a brand can even lead people to
dismiss evidence they would normally use to make buying decisions.

5. Extensions: With a well-established brand, we can spread the respect we've earned to a
related new product, service or location and more easily win acceptance of the newcomer. Eg.
Tata group have Tata Motors, Tata Chemicals, Voltas etc.

6. Greater company equity: Making our company into a brand usually means that we can get
more money for the company when we decide to sell it.

7. Lower marketing expenses: Although we must invest money to create a brand, once it's
created we can maintain it without having to tell the whole story about the brand every time we
market it.

8. For consumers, less risk: When someone feels under pressure to make a wise decision, he or
she tends to choose the brand-name supplier over the no-name one.

9. Makes Purchasing Easier: After making a satisfactory brand decision for the first time,
customers are likely to make repeat purchases without major reconsideration. Therefore, a good
brand speeds up shopping.

10. Brand Recognition: is when target customers remember having seen or heard of the brand.
This is critically important, basic prospect education for new companies, products or services.
11. Brand Advocacy: is when the satisfied customer tells everyone whom they know how great
your product or service is. They become our best salesperson.

12. Brand Effectiveness: A sharp focus will be created - this clarity will increase our overall
effectiveness.

13. Creating message: Core messages will be created that truly reflect the features, benefits and
unique qualities of your product or service.

14. Create a place in market: Gives our business a structure and plan, giving us the time to
focus on other aspects of the business.

15. Setting an image: Informs the culture of the business so everyone involved can easily
support the business goals.

Brand limitations:

Ideally, a good brand serves to enhance a sound infrastructure with a solid reputation. Branding
will help very little if there are internal operations and cultural personality are opposite what you
are trying to convey to the outside audience. The average customer is not going to purchase a
product or service without feeling comfortable with the company offering it.

Consumers have become alert to the “fluff” in advertising. They are also on the lookout for
companies that outright lie. When-not if – the public finds out it has been deceived, the company
in question will have to deal with a backlash-and the damage may very well be permanent. No
matter how persuasive the ad campaign or how hard-working the sales staff may be, neither can
move an inferior product, coupled by a poor image, off the shelves. If a company does not does
not live up to consumer expectations, negative word-of-mouth will eventually be its undoing.

What are the Limitations of Branding?

1. Cost:

If you wish to create and maintain a strong brand presence, it can involve a lot of design and
marketing costs. A strong brand is memorable, but people still need to be exposed to it, this often
requires a lot of advertising and PR over a long period of time, which can be very costly.

There are also costs involved with the creating of a brand image or logo and although most of
these are only one off costs, they are still relatively large for most small businesses.

2. Impersonal:

One of the main problems with many branded businesses is that they lose their personal image.
The ability to deal on a personal basis with customers is one of the biggest advantages small
business have, and poorly designed branding could give customers the impression that the
business is losing its personal touch.

3. Fixed Image:

Every brand has a certain image to potential customers, and part of that image is about what
products or services they sell. If they are known for selling just one product, and they want to
sell another product, will they be able to do so effectively?

4. Timescale:

The process of creating a brand will usually take a long period of time. As well as creating a
brand and updating your signs and equipment (e.g. Stationary, vehicles etc…), they need to
expose it to their potential customers.

It is commonly shown that people need to see an advert at least three times before they absorb it,
which means they will need to advertise and promote the brand for a considerable amount of
time before it will become well known.