The term ‘branding’ is a very broad concept. It comprises of the entire effort in creating a unique space in the mind of the consumers for the product of the company, through consistent advertising and promotion campaigns.
It can also be considered as the art of creating a brand. The very first motive of branding is to attract and retain potential customers through developing and maintaining a unique position in the market. In this, the means of identification of the company is recognised and established. Branding includes giving a name to the product, as parents name a baby.
Advantages of Branding
Branding has the following advantages:
To Consumers
Easy to Recognise: The existence of the brand name allows the consumers to identify the brand in the market clutter. This is because the brand has a distinctive packaging, colour, design, etc.
Availability of Quality Products: A brand is an assurance of quality. Even the producers have to make constant efforts to invest in R&D etc., so that they offer quality product and fulfil the brand promise. Consumers therefore get an assurance of quality when they buy a brand.
Minimum Fluctuations in Price: It has been seen that price fluctuations do not occur in brands. Consumers therefore get assured prices.
Improved Packing: The packaging of the brands is given lot of importance. The name of the brand and other details are included in the brand packaging. The packaging itself has to undergo a constant innovation in terms of look and feel so that the quality perception of the brand is maintained.
Mental Satisfaction: The use of brands by consumers also gives lot of satisfaction to the consumers as it gives them a feeling that they are using a superior product. For many consumers it can often be the feeling of pride like owners of Mercedes and Harley Davidson.
To Producers
Easy to Advertise: Having a proper brand helps the organisation to develop advertising strategies as the brands vision, target markets and value propositions are clearly defined. The name of the brand can be used by the organisation in its advertising campaigns.
Easy to Identify the Products: The brand name helps consumers to identify the products. This helps in advertising the products easily.
Creation of Separate Market: The brand helps the company to develop a value proposition for a particular market. This also helps it to develop a separate market for its products.
To Get More Price: Branding attracts and retains customers. They become loyal to the brand and are ready to pay any price for the brand.
Easy to Expand the product Mix: The existence of a successful brand helps the company in expanding the product mix. The company can add new products to the product mix and also add to its product lines. Getting the customers to buy new products is not a problem as the new products can rely on the positive image of the existing brands.
Personal Contacts With Consumers: The brand also helps the company to establish a direct link with its customers and to eliminate the activities of all middlemen who have vested interests. This reduces the cost of distribution immensely.
Disadvantages of Branding
Disadvantages of branding are as follows:
It is Expensive: Branding does not come cheap. There are substantial expenses in terms of research, brand identity creation and assimilation, designing, etc. Many companies make up for such an increased expense by charging high prices for their products. This Often, makes the Customers switch to other value oriented products – which offer the same functionality at a cheaper price. There are also expenses in terms of increased wages and professional expenses. These expenses may or may not increase the financial branding profits.
Limited Flexibility: Brand creation also has the impact of reducing the flexibility of the company in terms of brand offerings. The customers tend to associate the brand with a single offering very strongly. Another product from the same brand might not be well received by the customer.
Changing the Perception for the Brand is Hard: The customers are also very emotional when it comes to a brand. The fallout is that it is very difficult to manage a negative experience or feedback of customers. Once a brand’s reputation is tarnished, it is extremely challenging to get back to the same positive brand image.