A brand identifies a seller’s product from a competitor’s product. There are three main purposes for branding product identification, which is the most important purpose, repeat sales, and new-product sales. Branding has a lot of terms that marketers use there is brand equity, global brand, and brand loyalty. Marketers also have different brand strategies that they use for different products or customers. It all depends on the consumer for them to decide which strategy they will use. The different strategies are generic products, manufacturer’s brands, private brands, individual brands, family brands, and co-branding. The branding purposes and the branding strategy make up the importance of branding.
Different Branding Terms
Brand equity is one of the terms marketers use. How much is a brand worth? Brand equity is the value of the brand it doesn’t develop instantly. A brand has to be nurtured and marketed so consumers trust the brand. Brand equity can also affect the buyout price of a company. There are three different meanings of brand equity. The first is the total of brand as a separate asset when it is sold. The second is how much a consumer is attached to the brand. And lastly to describe the beliefs and associations that consumers have about the brand. Marketers tend to define brand equity differently from accountants.
Global brand is another term marketer’s use. Global brand is the name of the product that has worldwide recognition. It also has been referred to brands where at least 20 percent of the product is sold outside the region and the home country. Marketers have to make sure that there is nothing offensive in terms of the name or packaging in the different cultures and languages. There is one problem with global brand if there is a problem in one country there could be a repercussion for the brand.
Importance of branding 3
Brand loyalty is when a customer is committed and buys repeatedly the same brand. Brand loyalty only exist when customers have a high relative attitude toward the brand which a customer exhibits repurchasing behavior. Brand loyal consumers cut the marketing costs of the firm as the costs of attracting a new customer was six times higher than the cost of retaining an old one. Customers that are willing to pay higher prices can also bring new customers to the firm, this type of loyalty can be a great asset to the firm. The key to influencing factors of brand loyalty is that customer’s perceived value, customer satisfaction, brand trust, commitment, and repeated purchase behavior. “Brand loyalty is the biased behavioral response expressed over time by some decision-making unit with respect to one or more alternative brands out of a set of such brands and is a function of psychological processes.” (A Review of Brand-Loyalty Measures in Marketing by M. Mellens, M.G. Dekimpe, J.B.E.M Steendamp. Vol. XLI, 4, 1996)
Biased response: ...