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8.11. Strategic Issues In Branding

Adding value to the product by branding involves a great deal more than merely giving the product a catchy name. Branding is the culmination of a range of activities across the whole marketing mix, leading to a brand image that conveys a whole set of messages to the consumer (and, more importantly, to the consumer's friends and family) about quality, price, expected performance and status. For example, the Porsche brand name conveys an image of engineering excellence, reliability, sporty styling, high speed and high prices, and of wealth and success on the part of the owner. People do not buy Porsches simply as a means of transport; for that purpose a basic Ford is perfectly adequate. Because branding involves all the elements of the marketing mix it cannot be regarded simply as a tactical tool designed to differentiate the product on the supermarket shelves. Instead, it must be regarded as the focus for the marketing effort, as a way of directing the thought processes of the management towards producing consumer satisfaction. The brand acts as a common point of contact between the producer and the consumer.

The consumer benefits from the brand in terms of knowing what the quality will be, knowing what the expected performance will be, gaining some self-image values (for example, a prestigious product conveys prestige to the consumer by association – conversely, a low-price product might enhance a consumer's sense of frugality and ability to find good value for money). In many cases the core product has very little to differentiate it from other products, and the brand is really the only differentiating feature. For example, Levi jeans are the world's top-selling brand of jeans, yet the only discernible difference between Levi's and Wranglers is the stitching on the pocket and the brand name. A famous example is the rivalry between Pepsi Cola and Coca-Cola; in blind taste tests, most people prefer the flavour of Pepsi but Coca-Cola out sells Pepsi in virtually every market. This apparent discrepancy can only be explained by the brand image which Coca-Cola has, and in taste tests where consumers are able to see the can the drink comes out of, Coca-Cola is the preferred brand.

Despite the apparently artificial nature of differentiation by branding, the benefits to the consumer are very real; experiments show that branded analgesics work better than generic analgesics at relieving pain, even though the chemical formula is identical. This is because of the psychosomatic power of the brand.

Someone driving a prestige car gains very real benefits in terms of the respect and envy of others, even if the performance of the car is no better than that of its cheaper rival.

Brands can be looked at in a number of different ways. Brands were at one time a way of showing who had instigated the marketing ownership activities for the brand. This was an attempt to protect the formulation of the product in cases where intellectual property protection was insufficient, and also to ensure that customers knew whether they were buying a manufacturer's brand or a retailer's brand.

• Brand as a A strong brand undoubtedly does differentiate the product from similar products, differentiating device but having a strong brand name is not enough. The product itself also needs to be different in some way; the brand image is the communicating device that conveys the difference to the consumer.
• Brand as a functional Branding can be used to communicate functional capability. In other words, the device brand conveys an image of its quality and expected performance to the consumer.
• Brand as a symbolic The symbolism of some brands enables the consumer to say something about device themselves. This is particularly apparent in the ‘designer’ clothes industry – a very ordinary T-shirt acquires added value because the name of the designer is printed on the front. If the consumers believe that the brand's value lies in its communication ability they will spend considerable time and effort in choosing the brand that conveys the appropriate image.
• Brand as a risk reducer Every purchase involves a degree of risk; the product might not perform as expected, and if it fails to do so then the vendor might not be prepared to make restitution. Buying a strongly branded product offers the consumer a degree of reassurance about both the product and the producer. Astute marketers find out what types of risk are of most concern to the customers or consumers and develop a brand presentation which addresses those risks.
• Brand as a shorthand Brands are used as a way of ‘tagging’ information about a product in the device consumers’ memories. This is particularly relevant when the brand is extended to other product categories, since the consumer's view of the parent brand is transferred to the new brand: for example, Virgin has successfully extended the brand image from records to retailing to airlines to financial services, all offering the same innovative approach and serving similar market segments.
• Brand as a legal device Brands give a certain amount of legal protection to the producer, since pack design and name can be protected where (often) the formulation of the product cannot. Strong branding offers some protection for the firm's intellectual property.
• Brand as a strategic The assets constituting the brand can be identified and managed so that the brand device maintains and builds on the added value that it represents.

Branding clearly has advantages for the manufacturer and the retailer, since it helps to differentiate the product from the competitor’s product. Economies of scale and scope are attributed to branding, and a brand with high sales will generate production economies. A successful brand also creates a barrier to entry, so that competitors find it harder to enter the market. Brands also allow firms to compete other than on price, which clearly has advantages since the firm does not have to cut its profit margins in order to compete. Furthermore, brands that are held in high esteem tend to be more consistent in their sales, riding over the ups and downs of the marketplace. Not all brands are priced at a premium; many brands are competitively priced in order to take advantage of consistent sales. Branding has advantages for the consumer: it is easy to recognise the product, and easy to identify with it. Messages about the formulation and benefits are clearly conveyed, and in most cases the use of a particular brand says something about the consumer (for example, wearing designer clothes). Because most purchases involve only limited problem-solving behaviour, branding helps to reduce the decision-making time and also the effort of evaluating competing products.

Consumers who either do not want to spend time on an extended information search, or do not have the expertise to do so, can use the brand as an implicit guarantee of quality.

Information storage and retrieval in humans are carried out by a process of ‘chunking’ or collecting information in substantial quantities and storing them under a single ‘file name’. In effect, the brand name provides an informational chunk: the individual is able to summon up a huge amount of information from memory using the brand name as the trigger.

From a strategic viewpoint, the brand image provides a focus for the creative energies of the marketing team. The difficulty for marketers is that product and brand development is often a team process, and as such the team needs to keep a firm picture of what the product is intended to convey – the ‘personality’ of the product – if they are to maintain consistency in the creative activities. One way of doing this is to use a metaphor for the product. For example, the Honda Accord developers used the metaphor ‘Rugby player in a dinner suit’ to achieve product coherence across the team, even though the entire creative team consisted of hundreds of people, from automotive stylists through to ad designers.

Brand planning is important, but time-consuming; often the job is given to a brand manager, many of whom are young and inexperienced. Developing the brand is a process of integrating a number of strands of business activity, so a clear idea of the brand image is essential, as is a long-term view. To see branding as merely being about design or advertising or naming is inadequate and shortsighted; successful brands are those that act as a lens through which the consumer sees the corporation and the product. Constant evaluation of the image seen through the lens is essential if the brand is to retain its status.

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