Opinions expressed by Entrepreneur contributors are their own.
You can have a great idea, the funds to execute that idea and the people to help you bring it to life, but without a brand, you have nothing.
Branding is the bread and butter of any business, and the ultimate key to its success. Put simply, it is the ability to make plain areas of differentiation that distinguish your products or services from competing ones. At its core, a brand helps bring life into a company, regardless of its industry or category, and there are a number of elements that come together to create a good one. It’s very much like a person, in that it has unique and defining characteristics that position it for a desired target market. It also helps dimensionalize a business and add character that appeals to that market.
Take Oreo cookies, for example. Instead of marketing itself as crème sandwich cookie maker, the company takes its product to the next level. The tagline “Twist, lick, dunk” was marketed as the proper way to enjoy one, turning eating a cookie into a full snacking experience. The resulting power of the brand helped separate Oreo from other cookies — a layer of character and likeability that appealed directly to its target market, which has helped make it consistently successful for more than 110 years. Without the brand behind it, Oreo would just be another snack label.
Branding is also broad and complex: There are many components needed to build one, even before promotion and advertising, including asking the following: How do you know who you are advertising to, how do you know what you are advertising, and how do you know when it’s time to rebrand and reposition?
Related: 3 Examples of How to Build a Strong Brand Community
What is Brand Equity?
A foundational element of branding is brand equity — the total value of a brand based on associations and expectations. Such equity is determined by name awareness, loyalty, perceived quality and actual associations.
• Brand awareness is, of course, critical, and falls into two categories: recognition and recall. The former refers to remembering past exposure (for example, hearing a jingle and instantly recognizing the company it belongs to), while the latter is more about what product comes to mind when a category is discussed (say, a brand envisioned when you think of insurance, or toilet paper). This can vary for each person based on where he or she lives, as well as their habits, etc.
What’s more important, recognition or recall? The answer is actually neither; it depends entirely upon each company and its goals.
• Brand loyalty measures how loyal a consumer is to a brand. There are some consumers who will simply not buy a specific brand, while others might be ever-comparing two and can’t commit to either one. Still, others might dependably go with the lowest-priced product, and there are also those who buy out of habit with no specific rationale. Lastly, there are committed, loyal consumers who will always turn to your product. There are proven ways of enhancing this critical loyalty, like frequent buyer programs and incentives (isn’t it interesting how some people will only fly on one airline — captivated by the loyalty miles they’re accumulating?).
Related: 5 Ways to Build Highly Valuable Brand Loyalty
• In the mind of a consumer, perceived quality is the value they associate with a brand, regardless of how good or bad it may be. In the end, perception is everything. By differentiating themselves from competitors, brands do what’d needed in order to be different — to demonstrate that they are better— and specialization and/or exclusivity can lead to a higher perceived quality. Tactics like influencer marketing can have a positive impact on perceived quality as well. It comes down to how the consumer views the brand and its overall image.
• The last component of brand equity is actual associations. This can be anything a consumer might associate with it — whether a spokesperson, a logo, a specific color, even a tagline — anything that triggers the consumer to think of a particular business.
By being cognizant of all these elements, a company can start the process of evaluating its standing in a product category as well as its distinctiveness. Being able to understand one’s own value can also help in understanding what the target market is and how to successfully advertise to it.
Related: ‘Brand Equity’ Is an Intangible That’s Worth Real Money
Being able to evaluate the brand equity of a business is the start of the journey of building that brand. Understanding this equity can help generate insights that can be helpful in narrowing down a target market, as well as determining how a brand is lacking and its need for growth or repositioning.
Business Strategies, Entrepreneurial Advice & Inspiring Stories are all in one place. Explore the new Entrepreneur Bookstore.
Comments are Closed