Reasons for Building a Successful Brand
- Branding is the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product or company from its competitors
- Strong branding provides four key benefits to a business
Diagram: Benefits of Branding
Strong branding adds value, allows premium prices to be applied, improves product recognition and identity and differentiates products from those of rival businesses
1. Added Value
- Strong branding can add value to a product by creating a perception of quality, reliability and reputation
2. Ability to Charge Premium Prices
- Customers may be willing to pay more for a product that is associated with a well-established brand as they perceive products with strong branding to be of higher quality and therefore worth the extra cost
3. Branding Establishes Recognition & Identity
- This helps to builds trust and credibility and creates an emotional connection with customers which helps to generate repeat purchases
4. Business Differentiation
- Branding differentiates a business from its competitors and supports marketing and advertising efforts which can use key elements to build memorable promotional materials and campaigns
- Strong brands also strengthen a businesses balance sheet.
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- Brands are considered intangible assets on a company's balance sheet
- A strong brand adds to the overall value of these intangible assets, which may be an important part of a company's net worth and make it more attractive to investors.
- Brands can be built using any one or a combination of the following methods:
- By developing unique selling points (USPs)
- Through advertising
- Through sponsorship
- Through the use of social media
Examples of the way Brands have been Built
Method |
Explanation |
Example |
Unique selling points (USPs) |
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Advertising |
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Sponsorship |
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Social Media |
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Exam Tip
You could be asked to state an element of a business brand. Make sure you choose an element that is specific to the given business as state questions are testing application skills.