The American Marketing Association (AMA) defines a brand as “name, term, sign, symbol, or design , or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition”. Anything can be a brand including a person, place, firm or organization.
A strong brand has the ability to make it easy to take purchasing decisions, reduce the risk involved in trying new products and set expectations in consumer minds. For the company it creates awareness among the customers, builds reputation and gives prominence. Different components including name, logo, symbol, package design, or other characteristics that identifies a product and distinguishes it from others are brand elements.
A brand is always more than a product, because it can have more points that differentiate it in one or the other way from other products designed to satisfy the same need. These differences may be rational and tangible- related to product performance of the brand – or more symbolic, emotional, and tangible- related to what the brand represents.
Thus by creating discerned differences among products through effective branding and by developing a loyal customer base, marketers can create value that can translate to financial profits for the firm.
WHY BRANDS MATTER?
From the point of view of consumers, a good brand enable them to identify the source of the product. A reputed brand itself make it easier for the consumers to finalize the purchase decision. It reduces the risk of the consumer as they are well aware of the brands product and service quality. It reduces the search cost of the consumer. A reputed brand itself is a promise of a good product to the customer. It also assigns a responsibility to product maker to market only good products.
For organizations, branding gives a higher perceived value for its products. It gives greater credibility for the products from a manufacturer. It provides a steady stream of ideal clients for the company. It gives the firm a legal protection of unique features of the product. More significantly, a good brand is a source of competitive advantage for the company and it is means to increase financial returns.
BRANDING VS MARKETING
There are definitely big differences in branding and marketing. While branding pulls customers towards the product, marketing pushes the customers towards the product. Branding expresses the essential value of an organization or in a nutshell define who the manufacturer is, marketing defines how product awareness is created by the organization. Branding creates loyal customers, where marketing evokes response to the product. Branding is always strategic, in contrast, marketing is always tactical. Branding has much to do with emotion and marketing is all about reason.
To conclude branding is extremely important in today’s competitive market environment as there are more benefits for the company as well as the customers.
