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Branding is an effective marketing tool that can be used for stores, services, and products. It is the process of creating a connection with your consumers, so that when they have a need, they think of you to satisfy that need!
The stronger your branding, the more likely consumers will return to you for repeat business and the less sensitive they will be to price. This makes branding one of the most powerful marketing tools that you have, and also one of the cheapest. Why the cheapest? Because branding is done by incorporating your branding strategy (your look and feel that evokes specific consumer emotions) into everything you are already doing. Done right, it gives you an extra bang for the buck you are already spending.
Let me give you an example. One day you feel thirsty, and _____ pops into your head, so you go and buy one. This is what pops into my head:
OK, well, specifically Diet Coke. Not for any logical reason, but because I have an emotional connection to the brand Coca Cola. It's not an emotional dependence, but it is the association of certain emotions with Coca Cola. Emotions that I like and want to feel. The experts agree that Coca Cola is one of the best branded products in the world.
Don't believe me? Well, how many products do you know of that have hordes of people buying memorabilia? Check out Coca Cola. Today there are over 15,000 auctions (plus over 8,500 ebay stores) for buying memorabilia. What can you buy? Well, collectibles from bottles to advertising to trucks, toys, fan apparel and souvenirs, home and garden like home decor and art (and even furniture), clothing, and even dolls.
And every single item was created by obtaining a license from Coca Cola (at least those done legally) and paying royalties or license fees to Coca Cola. That's a huge source of revenue for Coke. Very few products are so well branded as to make beaucoup bucks from memorabilia!
I don't care where you stand on the "Cola Wars." From a total business standpoint, Pepsi can't hold a candle to Coke, even though Pepsi has achieved memorabilia status. Look for yourself at Pepsi. Not only are there only 1/3 as many listings (less than 5,000 auctions), but fewer than 3,200 ebay stores sell Pepsi memorabilia. Also consider that only 3 stores offer more than 100 Pepsi items (the highest at 137), while 23 stores offer 100 or more Coke items (the highest at 796 items).
So I ask you, if you could own the rights to the Coke brand or the Pepsi brand, which one would you want? I'm not asking which one you want to drink, but which stream of income you want!
For you financial types, here's how it translates ... the goodwill asset generated by the Coke brand is far greater than for Pepsi (Coke dominates worldwide); that kind of goodwill fuels Coke stock selling at a higher P/E ratio than most stocks. I once heard an analyst say that he didn't care about the P/E ratio, because he knew that he could always count on someone drinking another Coke.
But First ... Am I an Expert in Branding and Marketing?
The short answer is yes.
The long answer is that my entire career has been in Brand Management and marketing. Before I went on disability I ran 10% of a global Fortune 100 company that sells branded consumer products. This guide, as well as the ones to follow, is written based on my experience and everything I've learned along the way.
Enough about me! Let's get on with the fun stuff!
Are You Ready?
This is the first guide in a series I will be writing over the next six weeks, called Marketing 101.
Today you are reading the first, What is Branding, which covers the Why, What, Who, and When of Branding.
These Guides will follow, to teach you practical ways to do the "How" of branding:
Developing Your Consumer Insight
How to Choose Your Brand Name
Creating a Logo for Your Brand
The Key to Branding - Vigilance in Application
The Art and Science of Creating Labels for Your Products
Creating an Effective Flyer or Print Ad for Your Brand
Creating an Effective Brochure for Your Brand
Working with Advertising Agencies
I will write additional guides based on requests from you, so please let me know if there is another topic in branding you'd like to see covered! My ebay ID is FreedomforHealth.
Why Use Branding?
It is true that most brands will not achieve the icon status of a Coke or Pepsi. However, there are still many benefits to branding for even the smallest of businesses. Primarily, you want to create brand loyalty, because brand loyalty builds repeat business. And getting a repeat customer is always less expensive than creating a new customer.
Consumer loyalty is worth its weight in gold. It means that your consumers become less sensitive to price (this is especially important if you rely on resellers who have the final word on what the consumer pays). It also means that your consumers will seek your brand - which is much better than hoping you catch the consumers eye at the point of purchase.
Some "brands" use coupons and other means to try and generate business instead of real branding. Why? First, it is much easier and takes less thought. You really don't have to know much to do a coupon, and you certainly do not have to understand your consumers. Second, coupons are easily and immediately measurable in terms of results. You can create nice grafts and point to them.
WARNING: The use of coupons and other price mechanisms to drive consumer sales can have a very dangerous consequence for your business. Think of it - you are training your consumers to be more price sensitive, not less.
If you sell a product and a store decides to raise the price it charges consumers for your product, you lose business. You have trained consumers to rely on price promotions, so if a store runs one fewer sale in a year, you lose business. Inflation increases your costs? If you pass that on to your consumers by raising your wholesale price, you lose business.
Price promotions like sales can generate immediate sales, but in the long term they reduce brand loyalty and so increase your cost of doing business. You are not creating a solid future for your company. Branding is delayed gratification - you simply choose to have smaller gains now in exchange for much stronger future prospects.
Now, I am assuming that whatever you are branding (a company, a store, a service, or product - more on this later) will satisfy consumer needs. If what you are trying to get consumers to buy isn't good enough to create the desire for a repeat purchase, no amount of branding will fix your problem (so don't waste your time or money). Go back, make sure you are on the mark when it comes to quality and how well you meet the consumer need you have chosen to meet, and then come back to branding.
Why all this emphasis on emotions?
Real branding connects with our consumers in an emotional way. There have been many research studies that show emotions create stronger and faster attachments than rational thinking. And you want the strongest consumer attachment possible, so that they choose you when they have a need. After all, they do have to remember you, and emotions are powerful at creating and retrieving memories!
So please set aside your personal preference for logical vs. emotional thinking. We are not here to debate which is better. The facts are in and emotions are your most powerful tool to create brand loyalty. So make the logical choice to use emotional thinking!
Before you think of branding as fru-fru or sappy, remember you can also brand to create feelings of independence. Consider Harley Davidson. They are very successful at creating a consistent look and feel to the entire experience (before, during, and after your purchase and use of their motorcycles). They even have clubs and "clatches" (ever see 10 Harley's go by?), which are feminine concepts, but do you know of anyone that thinks of Harley's as feminine? No! Everything about that brand screams independence and adventure and more. So do not assume having insight into consumers' emotions and creating that emotional connection is sappy. Your job is to create the emotional connection and branding that evokes the emotions the consumer wants to feel. Emotions do NOT automatically mean sappy!
What Can I Brand?
Anything and everything, as long as you own the rights. From a practical standpoint:
Do you make your own products or use private label suppliers to make your products? You can apply the concepts of branding to everything that touches that product, like advertising, product labels, product packaging, the product itself, etc. (by the way, Coke OWNS the rights to its distinctive bottle and uses that bottle as part of its branding strategy). Besides Coke, think of Nike. Even the swoosh is consistent with the look and feel of Nike! Nike doesn't even need to use their name for you to identify their products:
Anything that touches your consumer that you are in control of can be used to create branding. In fact, successful branding requires that every interaction you have with consumers is branded.
Do you own a store, brick and mortar or in cyber space? The name, the look, and the feel of the store can all be used to create branding that encourages consumer loyalty. The products you offer and your approach to customer service also affect consumer loyalty. Think of Victoria's Secret. Have you been in their store? Have you seen their advertising? Do you have any doubt about what Victoria's Secret evokes?
If you are male, you may not get the entire Victoria's Secret mystique, so I'll spell it out. Notice that there are NO MEN in the advertising or in anything connected to Victoria's Secret. There is also nothing having to do with women trying to seduce a man. Victoria's Secret is all about women feeling sexy. Their products make the woman feel sexy, NOT men (or men looking at them, or women trying to get men to look at them). The focus is the internal feelings of the women, not external interactions with men.
Nordstom's is another example of extraordinary branding within retail. People shop there because of how Nordstrom's legendary customer service makes them feel, and Nordstrom's know that and has done it on purpose!
Do you have a business that offers services? Any service can also be branded. A classic example is Citibank. They have created a specific look and feel that reflects their insights into consumer behavior. They have made the entire experience distinctly Citibank-ish. Another great example is eBay. Do you think the font and the colors of the ebay logo are accidental? Everything about their logo and their website communicates the essence of the brand! Fun! Excitement! Possibilities!
Just because you don't have a physical product doesn't mean you can't create branding. You do need to follow the same concept - be deliberate in creating a consistent look and feel that defines every single way you touch your consumers. You just put that into practice differently than physical products.
Who Should Brand?
The simple answer is anyone who:
When Should I Brand?
Right away! You need to know your branding strategy and insights before you create product packaging, the product look itself, advertising, other marketing communications, etc. While it is never too late to brand, it is easiest if you start it as early as possible. That way you maximize its effectiveness and minimize consumer confusion as you try to create a cohesive look and feel.
Come visit me again next week to start getting into the Guides on How to Do Branding.
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