Explain why it is important for marketers to understand the concept of branding


It is imperative for marketers to understand the concept of branding as it is the process which will identify and differentiate a company's product or service from the competition (Jobber, 2010). In our developed economy the competition and the offer is so intense that it is fundamental to build a close relationship with both consumers and customers. That is what a brand does. Jobber (2010) defines a brand as “a distinctive product offering created by the use of a name, symbol, design, packaging, or some combination of these intended to differentiate it from the competitors”.

Brands affect consumer's perceptions and preferences, a brand is a quality certification and it creates trust and loyalty. Trough this essay we will explore why brand is important for marketers but also why it is important for consumers, we will then take in consideration the components of a strong brand and how to assess it. Finally we will have a look at the brand stretching strategy and its benefits and disadvantages .

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This essay will draw upon example from the soda market.


The American Marketing Association (AMA) defines a brand as ''name, team, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of seller and to differentiate them from the other sellers''. Firstly, brands are now recognised as a key asset for a company and having a strong brand will ultimately add value to it by giving a platform on which to build a reputation.

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For example, the stock market value of the Coca-Cola company was around $136 billion in the beginning of 2008 and by the end of the year, in spite of the global financial crisis, it remained close to 140 billion while the net asset value of the business was only $11,8 billion (Brands and Branding). A brand in addition, will help the company to attract more investors because the high value means the company is successful and reliable.

Secondly, marketers should also try to understand consumer behaviour and therefore how a strong brand will affect consumer perceptions and preferences and ultimately the customer's purchasing decision. To highlight this concept. The following consumer testing example is referenced: Two matched samples of consumers were asked to taste Diet Coke, the market leader in diet soda drinks, and Diet pepsi. The first group tasted the drinks blindfolded and were asked to state a preference. The procedure was repeated for the second group, except that the test was with the recognisable brand.(Jobber,2010).

The findings from the test made for interesting results: Of the 100 or so test subjects who were blindfolded, 51 of them preferred the Diet Pepsi and 44 the Diet Coke ( 5 person did not find any difference) but for the group where the brand were identifiable, only 23 test subjects preferred the Diet Pepsi and 65 Diet Cola. This findings clearly demonstrated the level of influence a strong brand name could have on customer perception of a product and therefore the final purchasing decision.

In order to succeed, marketers need to understand the concept of branding to face the competition (Marketing Theory). New entrants in a market such as the cola soda market would have to compete with the most famous red can in the world and the founder of the Cola drink, Coca-Cola. Besides, this is what happened to Virgin Coke who failed to break Coca-Cola's domination (Jobber,2010),for the reason that Coca-Cola inspires trust and let the customer shop with confidence because he knows that a can of Coke will satisfy his desires.

In addition, it will embraced the competition by making the distribution easier for the brand and more difficult for the entrants. Marketers have to recognise that a strong brand will directly and beneficially affect company profit, hence a heavy investment is often made into the branding process. A strong brand will achieve, distribution more readily and will realise economies of scale, decreasing the costs of production and distribution (Jobber,2010).

In addition, a brand will generate customer loyalty to a product with customers returning to a brand they trust (Brands and Branding) and customers who trust a brand will be less price sensitive because of a faith that a particular brand offers an expected level of quality and results, in short a premium brand can charge at a premium price . Finally a strong brand not only lends to customer loyalty but it also lends as a platform for brand extension (Jobber,2010). A brand extension is a brand strategy that consist of using the established brand name to launch a new product (Journal of Marketing).

Strong brands enjoyed having impact on customers perceptions and an extended product will benefit from it. For example, the Diet Coke, Coke Zero, Cherry coke have all stemmed from the strong Coca-Cola umbrella brand and all have successfully been launched in the soda drink marke as a result. Consequently branding is important for marketers because it will make easier for a company to introduce a new product on the back of an established one therefore securing and growing company profit in terms of strong sales forged through customer familiarity and trust.

Thus, for the reason stated so far we have come to understand why it is imperative for marketers to understand the concept of branding but what are the components of a strong brand? How can we assess a brand? The Brand equity and brand positioning must be taken in consideration as well. It is important to know that branding is not only about attracting new customers, thanks to a recognisable logo or a great advertising campaign but it is also about being known as the 'only and legitimate choice'. In the energy drink market for example, with a plethora of product on offer such as Monster, Relentless, Rockstars ,etc.

Red Bull is seen as the only one that 'give wings', the starp-line is globaly recognised and Red Bull has been seen for years as the only vodka mixer for european teenagers (marketingmagazine. co. uk). Hence branding is important for a company because an established brand and the products that fall within it, will have enjoy a sustainable market extended product life cycle. The Coca-Cola soft drink has been sold since 1895 for example. (thecoca-colacompany. com) Brands needs customers but customers needs brands as well. In developed economies consumers, have a massive range of choice.

Therefore, a good brand should in reality represents a cutting edge in design or technology, a high standard of quality which will be what consumers loyalty influenced by (Brands and Branding). The brand, with its recognisable name or packaging, is making a promise that consumer's expectations will be satisfied (Brand and Branding) so it allows the consumer to shop with confidence and it acts as a guide through a intense variety of choice. Another facet to this, is consumer identity - consumers look to certain brands as a way of projecting a certain image to others in society and brands play an important role in this.

Using brands in this way, consumers carve out an identity for themselves which differentiates them in some way to others around them. This behaviour is strongly recognised for example by the luxury goods market. This industry serves to satisfy a consumer desire to project a certain sense of taste, wealth or fashion savy. For example, people who want to identify themselves to a certain economical class may choose to purchase a car from a premium brand like Mercedes, Audi, BMW, etc. ) or perhaps consumers who wish to portray a certain environmental awareness may choose to purchase an hybrid car.

Branding positioning is about creating a unique and distinctive niche in the market place (Jobber, 2010). For an existing brand, the brand position will be defined by the brands strengths and weaknesses from a customer perspective vis a vis the competition (Holmereport. com) but for a brand building it will be the process by which you will enter in peoples mind (brandstrategyinsider. com). In order to succeed in positioning, brands needs to show clarity, consistency, competitiveness and credibility.

Rita Clifton argues in Brands and Branding (2009) that “ in an over communicated world, lack of clarity will substantially reduce effectiveness and efficiency”. During the last decade Red bull suffered from a lack of clarity. 'Red Bull give you wings' certainly but is it good for me? Why? When should I drink it? (marketingmagazine. co. uk). Nevertheless, even if the beverage must have faced some serious criticises about the ingredients contained that have been followed sometimes by the radiation of the can in some countries ( France finally capitulated in 2008, Lexpansion.com) ,  Red Bull has successfully engendered credibility through different strategies such as stretching. The three times victory of Red Bull Racing in F1 and the more recent Red bull Stratos stunt has built a consequent reputation and credibility. We can assess the position of a brand trough six elements: the brand domain, the brand heritage, the brand values, the brand assets, the brand personality and the brand reflection (Jobber,2010). The examination of those six elements will ultimately help increase the brand performance. By examining the brand domain you will know if the brand is efficient in the market in which it competes .

For example, Red bull has three strong position. The Energy drink for extreme sports people, the energy drink and the drink as a spirit mixer (marketingmagazine. co. uk). Then the Brand heritage and the following four element are about creating clear advantages for the target consumers (Jobber,2010). So brand heritage is about the historical background of a brand. a brand which has been aroun for a while shows sustainability, reliability and a guarantee quality. This can be used in advertisement (Jobber,2010) or on the packaging. On the other hand, brand values is what represent and characterise your brand.

“Red bull give you wings”. It gives you wings because you will be awake all night and you won't feel tired at all, giving you confidence to achieve what you have never done before. In analysing your brand asset you will notice what differentiate you from the competition. This can be a logo, a design, a symbol, an image, a philosophy or an event... (Jobber,2010). At the moment someone speak about a can of Red Bull you will automatically think about two bulls on a silver and blue can or you will think about your previous party or at a man skydiving from the space.

Red bull exceeded the competition by consolidating its image of a confident dynamic and innovative brand. An other element of the framework is the brand personality. If the brand Red bull was a person who would it be? Surely a dynamic and adventurous indivudual who wants to discover the world. Finally, the brand reflection is ''how the brand relates to self identity'' (jobber, 2010). As we have seen earlier some people would purchase a Toyota Prius to identify themselves as ecologically aware.

By assessing your brand with those six elements, the brand manager will have an overlook of the situation and it will give him clues to face some issues or to repositioned the brand. The brand equity is the value of the brand from customers perceptions of it. There are two kind of brand equity: The customer-based brand equity and the proprietary-based brand equity. The first kind is entirely about the customers perception of the brand; and the brand awareness and the brand image are two effectors of it. Jobber ( 2010) assumes that awareness is a pre-condition of evaluating a brand.

By raising this awareness customers will go shopping in favour of a brand, they won't go shopping to get a denim pants but to purchase a Levi's pants for example. Brand awareness is also useful for low-involvement purchasing situations – purchases becoming habitual after a first satisfied experience with no research of information about the product because a relationship is already established. By increasing brand image through the marketing mix (Jobber,2010) you will consolidate your customer-based brand equity. The most common way to do this is by advertisement.

A great advert from a brand will stay in customer's mind by touching him emotionally or by delivering a clear message. Ultimately an association is created between the brand and the customers that will affect the purchasing. Lets remember the test with Diet Pepsi and Diet Cola. We could say that Diet Cola (Coca Cola) profit of a better brand equity than Diet Pepsi (Pepsi) because when the brand was known a preference was made toward a particular brand. On the other hand, proprietary-based brand equity is more about the attributes of a company to deliver value to the brand (Jobber,2010).

It can be by its aptitude to distribute the brand, for exemple Mc Donalds which is the fourth most powerful brand in the world (wallstcheatsheet. com) sell 'official' drinks from the Coca-Cola brand product line ( Fanta, Sprite, Minute Maid, Diet Coke, Coke). It can also be by the patents of a company. For example new technology (Dyson), new pharmaceutical products all have a strong proprietary based equity resulting from an original patent. Tom Blacket in Brand and Branding wrote: “Brands with strong equity embed themselves deeply in the hearts and mind of consumers”.

Consequently, a strong customer-based brand equity or a strong proprietary-based brand equity will increase the brand equity so it will help the brand to keep its position in the market and new entrants will struggle to defeat it. Moreover, the value of the brand will attracting more investors,consumers and solicitations. To conclude this essay we could have a look at a brand strategy such as brand stretching. A brand stretching occurs when a brand is used on a unrelated market (Jobber,2010). In terms of brand stretching, the Red Bull company is probably one of the best in this strategy.

From the energy drinks to Formule 1 with the acquisition of Jaguar racing in 2005 recalled Red Bull Racing, passing by the football world with the purchase of the New York MetroStars in 2006 (renamed New York Red Bull) and the SV Austria Salzburg in 2005 (FC Red Bull Salzburg) or with the creation of Red Bull Records in 2007. We will focused on the most recent and very successful stretching of the brand: Red Bull Stratos. If you have an internet connection and if you are living in our contemporary world you must have heard or seen it ( 8 million live views on Youtube).

In rare interview that Mateschitz, founder of Red Bull, has accorded he stated : “We don't bring the product to the people, we bring people to the product. We make it available and those who love our style come to us”(thedrum. co. uk). With Stratos, Red Bull has demonstrated the brand's famous link with extreme sport and innovation but it has more importantly created “the” buzz of the last decade and revolutionized the purpose of a brand and the relation between it and the customers. Red Bull Stratos has become an ''I was there moment''(campaignlive. com).

With all those stretching strategies Red Bull could have lost in credibility, make itself a bad publicity or got cannibalized but its all the contrary that occurred. Its reputation has been consolidated and it has promoted its cans very well. It has also improved the trust toward the brand. Summary. A closed trusted relationship will be created only if there is quality. This relationship will consolidate customers perceptions about the brand increasing loyalty and then the revenues. It is imperative to position your brand efficiently in order to successfully reach your target market .

Therefore you will need to deliver a clear and consistent message, be competitive and have credibility. You can assess the strength or weakness of your brand by analysing its domain, its heritage, its values, its assets, its personality and its reflection. In improving it you will raise some brand equity that can be customer-based or proprietary based. By increasing your brand equity you will stay in people's mind for long time and be able to face efficiently the competition. Conclusion. The success of branding resides in the importance that you have for consumers and in the process of creating and managing a brand.

Having a strong brand will help you to face the competition, to introduce new product and to make profit. A brand also help the customers to choice between a wide range of offers and to identify themselves. In order to success you must conquer consumers mind to gain their loyalty by promising that their desires will be satisfied. Branding is all about trust. Last but not least, companies need to understand that a brand should be taken such as an investment and not a cost. Red Bull spend 30 to 40% of its revenue in marketing (marketing magazine).

Updated: Jul 20, 2021
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Explain why it is important for marketers to understand the concept of branding. (2018, Sep 10). Retrieved from https://studymoose.com/explain-why-it-is-important-for-marketers-to-understand-the-concept-of-branding-essay

Explain why it is important for marketers to understand the concept of branding essay
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