Branding, an important success factor to businesses

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Writuparna Kakati | 13 Jan, 2009
In the cutthroat world of business, branding has become one of the most important success factors for every business.

What is a brand? It may be a product, service, a group of complementary products or even a company name from a known source. An effective brand name, combined with a well known corporate image, usually allows a company to charge more for its products and thus to increase gross margins. Whether it is a target audience for a product or the marketplace in general, a brand value reflects how a product's name, or company name, is perceived by the marketplace. In e-marketing, the value of a brand may have heightened importance due to the intangible nature of the web.

Businesses often mistake to think that branding is not very important for established businesses and only those which are new players in the corporate arena need to worry about it. But the truth is that branding is equally important for both budding and old businesses as corporate branding strategies will significantly help the a company, both young and old, in creating a highly effective and well-established corporate identity.

How to develop a strong brand? It begins with why consumers buy a brand and why they re-buy the brand. There are two very important processes which help stronger brand image:

Firstly, brand promotion through advertisement. In these days, consumers of any products or services encounter a myriad of advertisements in all types of media. It is why businesses need to promote their products through repetitious type ads so that individual's attention can be captured. Secondly, a brand name must be associated with its most prominent character. For example, many rural Indian consumers associate 'Life Insurance Corporation of India' with life insurance products, and 'Syntax' with water tanks.

The goal of branding is to recognition so that your target customers recognize you and be aware of what you do; consumers need to be able to articulate what you do and whenever they need your type of products or services, your company should be the first name that comes to their mind; and finally, the goal of branding is to set a product or service apart from its competitors.

Once brand recognition is achieved, it allows a company to charge a higher price and retain a greater market share than would otherwise be expected from an unbranded product. A strong brand image prevents erosion of a product's market share, create higher growth margins and serves as a weapon against consumers switching due to sales promotion.