All companies invest heavily in their brand, but why exactly is it so important? Let’s look at some key facts.
1. Brands Are Memorable
When you say that you want a cold drink, you might reach for a Pepsi Cola or a Coca Cola. You probably don’t reach for a Cola or know the own-brand equivalent. Most of us say ‘Coke’, despite Pepsi spending millions in an attempt to build comparable brand recognition. The power of the brand is absolute in consumer markets in particular, where there are plenty of easy alternatives for customers to experience. When brands are memorable, they become lodged in the customer’s mind for the attributes that the brand wants to convey.
2. Brands Add Value
Customers pay more for brands, as they perceive them as having value. This value may be for a more superior product or experience overall, a certain cachet of desirability or other brand features.
3. Brands Increase Revenue
The added perceived value of a brand will usually increase a company’s revenues from sales and help to grow its profits. Strong brands can charge a margin for their perception of higher quality, which is why they are always more expensive than ‘own label’ or value brands. Sometimes there is actually very little difference between the products – look at grocery basics as a key example here, especially when two different products may actually come from the same manufacturer – but the brand value provides the differential.
4. Brands Create Loyalty
The brand persona helps customers to engage with the brand and to feel an affiliation for it. In that way, they are inclined to buy it again and again to experience those positive feelings. Many of these brand associations are built in childhood, and customers remain loyal to the brands that they have grown up with. Look at cereal brands such as Kellogg’s or Cadbury’s chocolate as two examples here. A branding agency such as www.reallyhelpfulmarketing.co.uk/brand-development/ can assist with brand development.
5. Corporate Reasons
When brands are sold, they have a valuation attached to them which provides an independent market valuation or collateral for a lender to release funds against. The power of the brand even extends beyond consumer gains!
So to really see your company succeed, invest in the brand for the longer term and enjoy the gains.