Importance of Branding Essay

Introduction Successfully building an appropriate brand for a company does more than merely provide an appealing design, picture and slogan for a consumer to view. It provides a value that which is necessary to obtain in order to stay competitive in most industries in modern day society. This is both valid in Business to Consumer (B2C) marketing and Business to Business (B2B) marketing. The approach and importance of successfully branding ones service or product both tangible and intangible through B2C and B2B are similar, but also do have key differences. In this report, we will discuss the advantages of building a strong brand name and image, risks, and some techniques. Relative Literature Brand pundits refer to our modern day society, (that which strategic branding is necessary otherwise one will be faced with a competitive disadvantage) also as a branding world (Sarin). This is due to there being more than 2.5 million registered trademarks in the United States alone (Sarin). With such heavy competition, it is vital that ones company does everything possible to differentiate themselves. Building a strong brand is a great method of doing so. Obtaining a recognizable brand backed with a positive brand image make purchaser’s decisions much easier. It allows an abundant amount of information to be provided to the customer or business representative before any form of research (Robert Vitale). As much as bundling information for purchaser’s to make easier decisions assists businesses increase their sales, it also prevents the consumer or business representative from purchasing the wrong good. Active marketers aim to succeed at two different points of a sale: 1- properly market their product/service to be initially bought, 2- have the person or company be satisfied with the value purchased (Robert Vitale). After the second point, it is likely that the company has just gained a repeat, loyal customer. If an individual/company finds a good/service that meets their criteria, why risk purchasing something else that may not deliver? With a recognizable brand, one can ensure that every time this purchaser seeks the same product/service, they will come right back. Value has been created from the product/service, recognized by the brand, therefore creating a positive brand image. Brand image further establishes a reputation and as long as that is positive then one can expect to notice sales to exponentially increase. Due to extra value added onto companies with an established brand name, there is extra cost. The value added for the purchaser generally encompasses the predictability of getting the same product or service (less risk) and familiarity, in other words, â€Å"the value of trust earned between the brand promise and the brand experience† (Maruca). One CEO of an electrical business producing copper wire reported that he preferred brand products because of consistency (Sari n). Consistency is important for him because the materials purchased are then used by his company to create iron rods that they strive to have quality behind. If they cannot trust the quality of their supplies then they cannot confidently produce their own good. It is too much of a hassle for companies to constantly search for new suppliers, once one is found, it saves an enormous amount of effort to become a repeat customer. A massive steal producer in India explained that he would rather pay the increased premium price for a brand product because the initial cost might be high, but operation costs and maintenance is lower since the brand products purchased come with customer care and instill a workflow stability (Sarin). Companies aiming to establish a positive brand image must provide great customer care. It is hard to build a good reputation, but it is easy to destroy it (Philip Kotler). Strategizing how to properly build a good image for ones company must be consistent. Throughout all avenues of the media a clear message of ones company must be illustrated. A proper division within a company should assemble to do so. Brand management â€Å"establishes a framework systematically managing the planning, development, implementation and evaluation of brand strategy† (Robert Vitale). Evaluation are key tools needed to ensure that the implemented strategy is actually going as planned. There are two ways of evaluating brand strategies. The first is a research-based evaluation. The aim of this approach is to put a financial value on the brand measured by customer’s behaviours and attitudes towards the brand itself. Components of the measurement are: awareness, knowledge, familiarity, relevance, satisfaction, and recommendation (Robert Vitale). Second approach is financially driven. This time brand valuation is used to approximate the value of the brand and it is based on subjective judgments of people within the organization in question. The earnings stream is estimated then divided by those attributable to the brand, to the fixed assets, and to other intangible assets. Next there’s an estimation of value for the brand in the market (Robert Vitale). These tools are so important because without checking up on ones brand image, it could possible take a turn down a path in the minds of the market in a direction the company does not want to go. It takes a long time to successfully establish a brand because it takes a long time to establish trust and confidence in the customer (Robert Vitale). Here B2C and B2B marketing differ. Because B2B business is simply so much larger then B2C, gaining a trustworthy relationship proves to be much more challenging (Robert Vitale). Customers in B2C interactions have less to risk while representatives of companies have to ensure that what they are purchasing is the standard of quality acceptable for their organization. If they fail it is not just a waste of money, they could face much more drastic consequences such as loosing contracts, dropping stocks, investors, or even the purchasing representatives job security. Of course the way that purchase decisions are handled vary around the world. For instance, in South American cultures, any kind of major purchasing decision takes extended periods of time to make (John Daniels). Before people even begin to discuss business the first establish a relationship. To them this builds trust that which is necessary for their way of life otherwise they cannot comfortably move onto negotiations. In B2C interactions however, one can notice that many purchases seem to occur more spontaneously (John Daniels). What this shows us is that is imperative to take into consideration cultural differences when marketing into different countries, constantly evaluate how the market perceives ones brand, but never have contradict the brand image, consistency is necessary or it will have no effect at all. Discussion I believe in terms of importance of brand names, there is a massive factor that which was barely discussed in any of my sources. Income is one the largest, if not the largest factor influencing buying behaviour. This would affect B2C business more, but it would still affect small to medium sized businesses. If they cannot afford the brand name products/services then they would get a lesser-known product/service. This is because value and quality are not synonyms for each other. Yes a brand adds value to a company, but that does not mean it adds quality to the product/service. Furthermore, I would even go as far as to disagree with large companies insisting to buy brand names. If anything they should have a well-experienced purchasing division whom can find suppliers whom can deliver the quality products/services needed and avoid the premium cost that which branded companies incur. Lastly, I also noticed throughout all the academic sources I read through for this thought paper, I couldn’t help but realize that there did not seem to be a large enough focus on the difference between B2C and B2B marketing. Minus the degree of speed it takes to win over a customers trust in B2C marketing, it appeared to myself that marketing in both avenues almost seemed to be the same. I need to disagree with this to some degree. Lastly I would have to disagree with the mentality I observed in all of the academic sources I went through in regards that branding is good for everyone. Based on different people I have met throughout my life, I am confident that there are people whom go out of their way NOT to purchase brand names (or at least big brand names). They believe that local business needs the money and that they should be supported since they are the businesses that bring true culture to the region. On these people, brand names have the inverse affect Suggestions for further Research I suggest that more research be carried out on the contrast of satisfaction levels of companies purchasing brand name products/services and ones who find other less known suppliers. Earlier in this paper we discussed was of evaluating the brand name, there must be another way of evaluating satisfaction of purchases in general and discovering this difference should bring light to how much brands actually matter for B2B marketing. In regards to B2C marketing, I completely agree that having a brand brings value to the company and helps attract and retain customers, but I do not believe that it is the same for B2B. Further research on the differences of B2B and B2C brand awareness would be great as well. While research the differences of B2B and B2C, plunging further into techniques of appealing to the portions of the market who actively seek alternate companies to purchase from who do not have a big brand name. Through this research companies would be able to more accurately direct marketing efforts towards the audience where it matters most, and the best result demonstrated in a favourable Return on Investment (ROI). Conclusion Corporate branding is necessary for any most companies to compete in their industry. In the B2C avenues (minus those who actively look for lesser known names to purchase from) branding is very successful. In regards to B2B avenues of business, many professionals believe that purchasing brand name products/services is still the best option though I am not convinced. Until further research is done comparing general satisfaction levels between brand name purchases and lesser-known product/service purchases on a mass scale of small to large sized companies, I will remain under the impression that B2B branding is not ALWAYS the best way. Of course there are frequent times that brand name companies deliver great value (that is how they usually form their great brand image), but I cannot believe that the â€Å"brand name world† that which we live in is the way of the future just yet. Bibliography John Daniels, L. R. International Business Environments and Operations. Pearson. Maruca, R. F. The Way We Work An Encyclopedia of Business Culture. Philip Kotler, W. P. B2B Brand Management. Springer. Robert Vitale, J. G. Business to Busines Marketing Analysis and Practice. Pearson. Sarin, S. Strategic Brand Management for B2B Markets A Road Map for Organizational Transformation. Response Business Books from SAGE.