Branding: Making a Name for Yourself

Is Your Brand Just a Name or Something of Value?

By Mitchell Goozé, Principal
Customer Manufacturing Group

Branding is all the rage and has been for the past several years. It has reached the point that many companies are spending hundreds of millions of dollars trying to re-brand. So what is branding, how does it apply in your market, and how can you use the tool to help your company be more successful? This article reviews those issues.

What is a Brand?

Brands are a “short-hand” method to remind your customer and prospective customer what they can buy from your company that they can’t buy any place else (real or perceived). Implicit in that statement is that there is something behind the Brand.

Branding is not just a:

1. Slogan
2. Ad or ad campaign
3. Symbol
4. Shape or Logo
5. Sound or Jingle
6. Spokesperson
7. Product

And branding may include some or all of the above items. The issue is the confusion of the tactics of branding with the Brand concept.

Branding is a set of tactics that can be used to create awareness and connection with a Brand. However, without a fundamental value proposition targeted at an identifiable market, branding will not create a Brand.

Brand versus Branding

As stated above, a Brand represents the unique value(s) of your company’s products or services in the mind of the customer and prospective customer. Countless products companies introduce Me-Too products to jump on a fad product bandwagon and hope this will create a brand. How is your line or product different (in reality or perception) in the minds of your customer?

Branding is a set of tactics designed to create Brand awareness. Unfortunately, too many companies attempt to use branding to substitute for creating a Brand. This is usually an expensive and wasted set of activities.

Good branding is designed to leverage the value you propose to provide in the mind of the customer or prospect. It is not useful for creating that value. Name awareness without an understanding of the value inherent in the “name,” does not create a Brand, it simply wastes money.

If your Brand does not provide value (real or perceived) in the mind of the customer or prospect, they have no reason to remember your name and your branding activities are doomed.

What is the Value of a Brand?

There are three places that Brands can add value: For the customer, for the company, and for the company’s stock price. Let’s look briefly at each.

Providing value for the customer

If a Brand does not provide any value to the customer (either real or perceived), then ultimately your branding activities will fail. The customer won’t pay for costs that don’t add value. So, branding activities that aren’t tied to a potentially successful Brand, result in lower profits. Therefore, if you intend to create a Brand and build that Brand through branding tactics (which cost money), then the Brand must add value for the customer.

So how does a Brand add value for a customer? Simple, as stated above, it is the mind-trigger that reminds the customer of the value they can acquire from the goods/services represented by the Brand. In today’s frenetic world, useful mind-triggers save time, and time is a very valuable resource.

This implies that if you create a successful Brand, you must be careful not to damage it with line extension or products that don’t fit. If your line is known for the science behind it, for example, introducing a new product without sufficient science risks damaging your whole Brand.

Providing value for the company

If a Brand provides value for the customer, then it can and should be valuable to the company. Brands, created by a value difference (real or perceived) and effective branding tactics, provide a company with a useful difference in the market.

The process of finding and understanding your company’s difference and then creating that mind-trigger for customers provides your company with a powerful competitive weapon in the market. Valuable brands, that maintain value, command shelf space in the mind. More mind space usually translates into more sales.

Effect on your stock price

David Aker, a professor at the University of California, Berkeley, has determined from research that there is a positive correlation between branding and stock price. Notice that we did not say creating a Brand and stock price. In reality, branding activity alone (done convincingly) can increase your stock price. This can be a mixed blessing.

If you create a visible branding activity that is not correlated to building a Brand, your stock price may move upward due to the belief that you may be creating Brand value, even if you aren’t. This may sound good but branding activity that does not tie to a Brand has no inherent value to the customer or the company and is ultimately a waste of time, except to the extent that it increases your stock value.

Unfortunately, once it has had a positive affect on your stock price, you can’t stop the branding activities even if they are not truly Brand building without having a negative effect on your stock price. This notwithstanding, your profits are going to suffer from wasted branding efforts that can now have no more positive effect on your stock price. (If this sounds like a potential “addiction” it certainly can be. So don’t get started because it can be tough to “kick the habit.”).

What Does It All Mean?

The bottom line is that it is seductive to embark on a branding campaign without having thought through your Brand strategy. This is the path too many companies take and it results in countless wasted dollars at best, and failed companies at worst.

Don’t be seduced by the flash of branding tactics. Whether it be a “Super Bowl” ad, or a new promotional campaign, don’t start without asking yourself, from the customers’ perspective, so what?

Creating a valuable Brand is a process. The bad news is it doesn’t happen quickly. The good news is that your competitors are most likely too impatient to do it right. This leaves you with a potential competitive advantage . . . if you want to use it.

Need more information?
Mitchell Goozé, Principal
Customer Manufacturing Group
225 Gregorgio Court
Reno, NV 89521
408-987-0140
LinkedIn
800-947-0140
Fax: 408-727-3949

About the Author

Mitchell Goozé

A recognized expert in marketing, innovation and leadership, strategic positioning, and customer relationships, Mitch Goozé has addressed groups throughout the world. Mitch is an experienced general manager and leader with operating experience in the high technology and consumer products industries. He has experience running divisions of large companies, as well as being CEO of mid-sized companies. Mr. Goozé was president of Teledyne Components, a division of Teledyne, Inc. for five years.

Mitch is a Certified Speaking Professional (CSP). Vistage, an international organization of CEOs, named him Marketing Resource of the Year. He was named Speaker of the Year 2001 by TEC UK.

Mitch was a major contributor to Future In Sight, (Macmillan, 1995) and has three books on marketing in print. He has been a member of Customer Manufacturing Group since 1991. Customer Manufacturing helps its customers increase marketing/sales performance through process improvement management.