newsletter article, January 2002
Building your Brand
by Nancy Giddens,
Agricultural Extension Marketing Specialist, Missouri Value-added Development
Center, University of Missouri
Value-added products need
a distinct identity - they need a brand. This article is the first of a five-part
series and will examine what branding is, why it is important, and the necessary
steps to brand your new product. Next month, we will discuss flanker branding.
Branding is one of the
most important factors influencing an item's success or failure in today's
marketplace. A brand is the combination of name, words, symbols or design
that identifies the product and its company and differentiates it from competition.
Businesses use branding
to market a new product, protect market position, broaden product offerings,
and enter a new product category. Four types of branding are:
New product branding
-- creating a new name for a new product in a category completely new to
the company. Example: A Taste of the Kingdom jellies.
-- protect market position by marketing another brand in a category in which
the firm already has a presence. Example: HORMEL® chili and its flanker
brand, STAGG® chili.
Brand line extension
-- use of the company's brand name in the firm's present product category.
Example: PepsiCo's Pepsi and Diet Pepsi.
(franchise extension) -- use of the existing brand name to enter a new product
category is called leveraging. Example: Mr. Coffee (a coffee maker) and
Mr. Coffee coffee.
is it important to develop a brand for your product?
A brand offers instant
product recognition and identification. Consumers identify branded products
and, as a result of effective advertising, have confidence in product quality.
Retailers like branded products because they make the store profitable - shoppers
attracted to branded products spend three to four times more on groceries
than do private-label shoppers.
Branding is beneficial
for four reasons:
-- A brand provides a clear and definitive reason for customers to buy your
product. If this reason does not exist, your product is a commodity and
the only measure of value is price. Small, value-added businesses cannot
compete on price successfully and need to incorporate some form of differentiation.
-- Consumers perceive brand-name products as higher quality, more reliable
and a better value than non-branded products. Generally speaking, the number
one brand in a category can command a 10 percent price premium over the
number two brand, and a 40 percent premium over the store brand. This price
premium is known as a brand tax. Consumers understand that a strong brand
can reduce getting stuck with disappointing or faulty products.
Builds brand loyalty
-- Brand loyalty is the recurring stream of profit generated by repeat and
referral sales of a specific brand. Repeat sales can be as much as 90 percent
less expensive to a company than new customer development.
-- Branded, recognizable products invoke a sense of pride in those associated
with production, promotion, sale, and distribution of those products.
is the process of branding a product?
A brand must be clear,
specific, and unique to your product. For example, the Wheaties brand differentiates
the cereal from its competition due to its association with health and "sports
excellence." To achieve the same successes with your products, you need
to execute the following steps to establish an effective brand:
Find a name.
Choose an appropriate name that is easily remembered and specific to the
product. The name should be restricted to three words or less - anything
longer is difficult for customers to recall. This process may require legal
screening to guarantee availability of the name and customer input to assess
attractiveness and appropriateness of the name.
Develop a slogan.
The selected slogan needs to be two to three words, catchy, and easily remembered.
To generate slogan ideas, you must stay focused on the buyer. Why should
they buy the product? What will they like about the brand? How does competition
compare? The slogan should take into account answers to these questions.
Create an appropriate
symbol or logo. It can be as simple as a geometric shape or as elaborate
as a silhouette of a person or object. Use the name, slogan and symbol on
every piece of correspondence related to the product- e-mails, invoices,
letterhead, business cards, advertisements and promotions, etc. This system
will eliminate inefficiencies in creative and production fees and extend
the branding process throughout everything you do. In a sense, it will prevent
"recreating the wheel" with each new media effort.
are the challenges of building a brand?
The greatest challenge
faced when developing and building a brand is creating just the right name,
slogan, and symbol for the product. It will take a great deal of time and
consideration. A thorough thought process and feedback from others will help
to get past this obstacle.
It is often difficult
to achieve initial customer recognition of a new product, regardless of branding.
However, branded items are more recognizable and memorable. Effective advertising
before and after the sale is key to overcoming this obstacle. Advertising
and promotion before the sale are essential to obtain first purchases and
follow-up advertisements after the sale will promote customer satisfaction
and repeat purchases.
Repeat purchases are one
of the primary objectives in brand development. Repeat purchases are critical
to your business' long-term success and contribute to brand loyalty, which
will be discussed in the final article of this series.
No endorsement of products
or firms is intended nor criticism implied of those not mentioned.
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