BLOG: The Importance of Branding

Harley-Davidson cologne and perfume.
Bic disposable underwear for women.
Cosmopolitan magazine branded yogurt.
Colgate line of frozen microwaveable meals.
Vaseline shampoo.
Coca-Cola’s “new” coke.

Would you buy any of these products? Probably not.

These product failures represent a misunderstanding about branding. Companies do not brand their products; customers do. A brand is a company’s reputation. Just like individuals cannot really create their own reputation, neither can companies. All the above products failed because the companies misunderstood their brand. No one wants to buy food from a toothpaste company.

Brands evolve over time and sometimes outlive the founding company.  One famous example of branding evolution is Abercrombie & Fitch (A&F), which started as a sporting goods store in 1892. Founded by David Abercrombie and Ezra Fitch, A&F earned the moniker of “The Greatest Sporting Goods Store in the World” in 1939. Part of their success was that they were known for offering high-quality products, which also implied high morals.

In 1977 A&F declared bankruptcy. Clothing retailer The Limited purchased the rights to the A&F name and brand in 1988. By 1996, A&F became a hip and chic teenage clothing juggernaut. This product shift succeeded because the high quality of the products did not change and teenagers’ parents and grandparents already trusted the brand. Clever marketing utilized vintage A&F iconography to cement their reputation for quality in the minds of consumers. This evolution of A&F illustrates the importance of innovating to meet new trends.

In a digital environment, branding represents one of the few ways companies can stand out from the crowd. Branding represents more than just a logo and a fetching color scheme. When a company creates a brand, they are announcing to the world their values and purpose. Logos visually represent the promises and reputation of the company. Reputation matters above all else and, once established, a successful brand becomes a company’s most valuable asset.

Benefits of Branding:

  • Branding improves recognition. Take the time to create a powerful and memorable logo because it will be on every correspondence and piece of advertising for the company’s life cycle
  • Branding creates trust. From a psychological perspective, people stay loyal to a product that appears polished and legitimate. Emotional reactions are hardwired into the brain and greatly influence buying behavior
  • Branding supports advertising. Marketing a product becomes significantly easier if consumers automatically associate it with an overarching brand reputation
  • Branding builds financial value. A study of the companies traded on the stock exchange shows that they are valued substantially above their hard assets. Most of the additional valuation comes from branding; a strong brand acts as a harbinger of future business success. The greater a company’s devotion to building brand value, the greater the financial return
  • Branding creates new business. When people discover a new product, they like to show it off. How can they boast about their great find if they cannot remember the brand? Word of mouth referrals are possible only when your brand delivers a memorable experience.

Companies succeed at branding if they understand the needs and wants of their target market over time. For example, consider the modern Abercrombie & Fitch. They dominated teen culture for almost two decades. But A&F failed to foresee a change in taste with the teenagers coming to age in the mid-2000s. A&F became a victim of its own success and overly relied on outdated clothing tastes. Teenagers in the mid-2000s heralded the beginning of a continuing trend in retail. Instead of seeking out the “cool” factor, consumers started valuing “inclusivity”. Clothes covered in oversized logos went out of fashion. Young adults and teenagers, A&F’s target demographic, wanted to wear clothing from retailers who embraced body diversity and fostered a sense of inclusivity and belonging.

Since A&F did not adapt to these new buying behaviors, they continued to push previously “chic” styles on a shrinking consumer base. Some unfortunate comments regarding body size diversity by the former CEO caused significant damage to the brand’s reputation. Especially when these comments went viral on the internet thanks to social sharing. While A&F eventually adapted to modern tastes, the brand has a long way to go before it regains the trust and buying power of its target market. A brand only remains relevant if it can address consumers’ needs without insulting their values.

Strong brand objectives to achieve:

  • Clearly delivers the message
  • Confirms credibility
  • Emotionally connects your target prospects with your product/service
  • Motivates the buyer to buy
  • Creates user loyalty

Products have life cycle. Brands have history and convey uniform quality, credibility, and experience. Successful brands create value, so much so that many companies put their brand value on the balance sheet. Customers stay loyal to brands, not companies. Global marketing research consistently reveals that consumers’ perceptions about brands often include “brand image”, namely non-functional qualities known as “brand personality”. This is why consumers often refer to brands with adjectival descriptors. Understanding your brand personality is key to sustaining longevity. There are five brand personalities, according to David Aaker, Professor Emeritus, Haas School of Business, University of California Berkeley. Which group does your target market fall within?

  • Sincerity--kindness, thoughtfulness, oriented towards family values (ex: Hallmark, Campbell’s’ Soup, The Honest Company, Disney)
  • Excitement--carefree, spirited, youthful attitude (ex: Apple, Six Flags, Disneyland)
  • Competence--successful, accomplished, influential (ex: BB&T, IBM, Microsoft)
  • Sophistication--elegant, prestigious, sometime pretentious (ex: Tiffany’s, Jaguar, De Beers, Tesla)
  • Rugged--tough, able to withstand hardship (ex: Harley-Davidson, North Face, Nike, Marlboro)

A brand represents the company’s contract with the consumer. In all likelihood, a strong and successful brand will outlive the original company. Abercrombie & Fitch achieved success twice, as a sporting goods store and a clothing retailer due to consistent high quality. Legacy brands still exist because of strong branding and customer loyalty. Is your brand strong enough to survive?

Questions to ask about your brand:

  • Does your brand relate to your target audience?
  • Does your brand convey the uniqueness of what you offer and why it is important?
  • Does it reflect the brand promises you are making to your target and internal audience?
  • Does your brand reflect the values that you want to represent to your customers?
  • What is your brand’s personality?

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