Branding

Branding is the process of creating a name, design or symbol

that identifies and differentiates a company from its competitors.
A good brand reflects the benefits of a product or service and
builds recognition and loyalty in customers. However, branding
is an expensive process and is difficult to undo if the company's
direction changes.
Definition
The process involved in creating a unique name and image for a
product in the consumers mind mainly 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.
Advantages

 Boosts customers Awareness

 Boosts customers Loyalty

 Increased sales and revenue growth.

 Protection from Competition
 Charging high pricing of product

 Barrier to entry on the market

 Gives identity to the product
 Make it distinguishable from the others products
 Create and maintains organization goodwill

Disadvantages
  High investment required
 Create negative image if brand fail in market
 Unwillingness to pay high prices
 Limited quality flexibility
 Changing the perception for the brand is hard


Advantages & Disadvantages of Branding

Advantage: Boosts Awareness

Branding makes the customer aware about the product or service
because without branding how will customer recognize the
product, just imagine if there was no branding then all cold drinks
would have been same but due to branding many customers
prefer to use coke brand while some other prefer to use Pepsi
and so on.

Boosts Loyalty:

Branding helps consumers develop a specific image for the

product in their mind. If consumers are satisfied after purchasing
the product, a strong brand makes it easy for them to make
repeat purchases without much reconsideration. This can all
translate into a wider customer base, increased sales and
revenue growth.

Protection from Competition

Brands offer a certain amount of legal protection from the

competition because of trademark law. A trademark can be any
unique word, device, or symbol that distinguishes a company.
Nike's swoosh and Apple's apple are both trademarked items.
Companies can trademark their business name as long as they
use it when advertising to customers. Registering a brand as a
trademark allows the holder to bring legal action against any
competitors that try to infringe on its branding.

Charging high prices

Branding helps the company in charging a premium price for their

product because a good brand commands a higher price than its
competitors which in turn leads to higher profit margins for the
company. An example would be Sony charging a higher price of
their LED televisions than Samsung and Philips because
customers have that brand image that Sony has the best quality
picture when it comes to televisions.

Barrier to entry on the market

Having a strong and established brand under your portfolio in the market
can be a barrier for entrance of new competitors on the same market as
your. The potential new competitors will know that there is a strong
leading brand and they may never make a decision to entry on the
market.

Disadvantage: It's Expensive

One major disadvantage of branding is the expense. Designing a

brand involves significant research, naming development,
graphic design and brand identity integration, which aren't cheap.
Business owners may feel pressured to increase the price of
their products to compensate for the increased expense, which
could cause customers to switch products. The increased
expense of wages and professional fees to develop a brand may
or may not exceed the financial benefits of branding.
Disadvantage: It's Tough to Change

One of the major benefits of a brand is that it creates a strong

product association for customers. However, this can also be a
disadvantage in several situations. If a company wants to
change direction with its products or target a new segment of
consumers, an established brand can make it difficult to change
the image of the company. If a company undergoes a public
scandal, a strong brand only makes it easier for consumers to
associate the business with past wrongdoings. While brands and
even company names can be changed, it's an expensive and
time-consuming process.

Disadvantages of Branding
1. The biggest disadvantage of branding is that it involves huge
cost because brands are not created overnight and companies
have to spend huge sums on advertising and publicity.
Advertising has to be done consistently as doing it occasionally
does not result in producing the desired result of creating a
brand image in the minds of the customers.

2. Another disadvantage of branding is that if due to some reason

brand gets a bad name or reputation than it is very difficult if
not impossible to regain the original position or status of the
brand.

3. Another disadvantage of branding is that company’s scope

become limited or in simple words company losses flexibility to
some extent as consumer tend to associate a particular brand
with particular product only and if the company sells some
other product then it is not sure that the other product will
perform equally well in the market.

Disadvantage: Can Become Commonplace

Many brands strive to be No. 1 in the minds of consumers. For
example, in many parts of the U.S., people request a Coke when they
go to a restaurant, not necessarily meaning a Coca-Cola product, but
any soda. While it is the goal of branding to become the standard, it is
not the goal to become the generic term of a line of products.

Disadvantage: Negative Attributes

If a product or service experiences a negative event, that will become

attached to the brand. For example, a massive recall or
unintentionally offensive ad campaign can tarnish a company’s brand
and image, causing the company to need to build a whole new brand
and identity to recapture its place in the market.

Disadvantage: Pigeonholes

Sometimes establishing a strong brand identity can backfire when a

company needs to pivot in response to changing market conditions. A
bakery known for sweet cakes may find it hard to rebrand as a
purveyor of gluten-free goods when its name calls to mind images of
pastries, frosting and sprinkles.

What are the advantages and disadvantages of branding?

What are the advantages of branding?

I will list only three of them.

1. Awareness and Differentiation

Branding makes the customer aware about the product or service,

because without branding how customer will recognize the product or
the service. There are so many similar products and services that are
used for same cause and for satisfying the same customer needs. Just
imagine if there was no branding then all cold drinks would have been
same? It's hard to imagine I know, that's why branding helped many
customers to prefer to use Coca - Cola while some other prefer to use
Pepsi and so on.

2. Premium prices

Branding helps the company in charging a premium price for their

product because a strong brand can charge a higher price than its
competitors which in turn leads to higher profit margins for the
company. An example would be Apple and Samsung charging a higher
price of their smartphones than Sony and Huawei because customers
have that brand image that Apple and Samsung have the best quality
when it comes to smartphones.

Okay Dude! We got this as well.

These are the good things, what about the bad
things?
What are the disadvantages of branding?

Again, I will list three of them.

1. Huge development costs

The biggest disadvantage of branding is that it involves huge cost
because brands are not created overnight and companies have to spend
huge sums on advertising and publicity. Often the brand marketers
calculate the ROBI (Return of Brand Investment) as they tend to predict
and justify the brand development process.

2. Limited quality flexibility

Limited flexibility in the quality of the products and services of the

brands is emerging from the fact that they offer quality for premium
price. THE ONLY REASON why customers will pay this premium
price is the guaranteed quality. So, no exclusions here guys!

3. Changing the perception for the brand is hard

Another disadvantage of branding is that if due to some reason brand

gets a bad name or reputation than it is very difficult, if not impossible to
regain the original position or status of the brand. It's similar to
basketball MVP, one bad pass can led to losing the game and you're no
more perceived as MVP.