What is a Brand? Put simply, it defines the identity of an organization, product or service. It's more than just names and logos. The identity needs to be based on a unique idea and told through a compelling story. It needs to connect with potential customers and form positive emotional bonds. The idea needs to be distinct from the competition and relevant to the target markets worldview. It also needs to be authentic, meaning that it's not enough to simply make empty claims. The organization needs to actually live its brand.
Brands increase the value of products and services by differentiating them from the competition, creating positive mental associations and forming emotional relationships with the customer. Philip Kotler from the Kellogg School of Management famously said that "if you are not a brand, you are a commodity. Then price is everything and the low cost producer is the only winner."
Competing on price may increase short-term sales, but is a dangerous strategy for anyone serious about building a profitable, sustainable business. Brands provide businesses with the means to free themselves from constant price competition, increase the value of their services, reduce their marketing costs and develop long-term customer loyalty.
Building a successful, sustainable brand requires careful planning and consistency. It needs a strategy. Brand strategy is the plan that defines defines the ideas and stories behind the brands, the structure and relationship of the brands within the organization and the core identifying elements. These can include elements such as company and product names, tone of voice, logo's, color schemes etc. It also provides the framework for implementing the brands through the organizations operations and for using them to efficiently work towards the businesses goals. It's not just a cosmetic exercise; it's a key element of business strategy.
With a clear strategy in place, managers can make appropriate, co-ordinated, informed decisions not just in marketing, but in all departments from product development through to customer service and recruitment. This process of embodying the brand idea through the organization is what we call branding.
The beauty of branding is that by telling your customers authentic, compelling stories, you not only make your goods more attractive and valuable, you give your customers something to talk about. Humans naturally love to tell and share stories. By giving them good stories to tell, you gain access to what is by far the cheapest and most effective form of promotion – word of mouth.
Few organizations manage to achieve the full benefits of word of mouth, and worse still, for many organizations it spreads more negative stories than positive. To compensate for a lack of positive word of mouth, organizations spend huge sums of money on ineffective marketing exercises. Without an effective brand strategy these exercises are often unfocussed, inconsistent and unauthentic. Consequently, they rarely pay for themselves, let alone make a profit.
So what is the role of marketing? To a large extent, branding is the antithesis of marketing. Branding is the most effective way of generating positive word of mouth, making it cheaper and more effective than traditional marketing techniques.
Marketing without a clear brand strategy is a chaotic, costly exercise that in essence is little more than shouting and showing off about your products and services. People do not like or trust show-offs. If you want to make an impact, you need to talk to them like grown ups. With exposure to thousands of marketing messages every day, consumers have become tremendously immune to meaningless promotional messages, filtering them out and filming them in their mental recycle bins.
However, there is still a place for marketing and in many cases, marketing is part of the branding process as it provides a means by which to spread the brand story. This explains why there is so much confusion regarding the difference between them. Marketing used to be about the promotion of products and services. Successful marketing now focuses on the promotion of brands.
If an organization developed a perfect brand idea but did nothing to promote it, then no one would ever have heard about it. The story would never spread and the strategy would be unsuccessful. It's there before important to combine the strengths of both branding and marketing in order to reach your target market.
The most successful organizations combine a confident and forward thinking idea with a robust and organized strategy. They then use carefully targeted marketing to help get their story out. The success of their brands means that as time goes on, the need for formal marketing decreases and the effectiveness of any existing marketing increases, then paving the way for increased profits and organizational growth.
In conclusion, brands are a key element of building profitable businesses with long-term sustainability. When executed well, they increase sales, add value to products and services and reduce marketing costs. They also give focus to a business, boost staff morale and increase share value.
Building successful brands is not simply a cosmetic exercise. They need to be consistent, true to the organization and embodied through their activities. This is only possible when a clear brand strategy is in place to act as a framework for their implementation, and to ensure that they are always working towards the business goals. Marketing has its place as a tool for promoting brands, but once they have made a connection with the core of their target market, successful brands can sell them through through word of mouth.
