Source: Image of Apple logo, muffler sound, coffee cup, images by Video Scribe, License held by Jeff Carroll; Image of IBM logo, Creative Commons, http://bit.ly/1r6mHSa; Image of Nike logo, Creative Commons, http://bit.ly/TJC8l1; Image of Harley Davidson Sportster, Public Domain, http://bit.ly/VA5AeU.
Hi. I'm Jeff. And in this lesson, we'll learn about the basics of branding, why it's important, and about different branding strategies. So let's get started.
First of all, what is branding? Well, branding is creating an individual name and perception for a product, company, or idea through marketing measures. The visual identity of a brand is often handled through trademarks. Now a trademark provides exclusive legal use of branding and all of its related elements.
These elements can include a company's name, the colors associated with the company-- such as blue for IBM-- the logo-- like Nike's famous swish-- symbols, tag lines, and even packaging. All of these can be used to reinforce a brand identity. And once a strong brand identity is created, it becomes recognizable by most people.
For example, when you see this logo, what company name comes to mind? If you said Apple, then you can see how branding is important for a company. One other method used to create brand loyalty is through product differentiation. This is creating a perceived difference between a good or service in the mind of the cluster of customers that are the focus of the business or organization.
When consumers are loyal to a brand, they'll return to that brand for repeated sales. One good example of this in practice is Harley-Davidson. They make motorcycles just like Honda or Yamaha makes motorcycles, but when you own a Harley, you are part of a well-differentiated community. And Harley-Davidson encourages this by stressing the differences between their products and others, such as the distinctive sound a Harley bike makes.
Once you buy a Harley and join this community, it becomes difficult to buy any other motorcycle in the future, because you would be forced to leave this tight knit group. That is how product differentiation builds brand loyalty. There are some dangers to brand loyalty in the marketplace.
One of these dangers are substitute products. Now these are products that a consumer would select in lieu of another product. Coffee, for example, can be seen as a substitute product by many. They may choose to buy the cheapest or most convenient version instead of remaining loyal to specific brand. And this is why strong branding is so important.
Without it, consumers would switch from your product, but with good branding that creates a sense of familiarity and community, coffee drinkers can also become fiercely loyal to a single product. And they may even work to convince others to try the coffee too. That is the importance of brand.
There are a few strategies that companies can use when attempting to create a strong brand. They can focus on individual product branding. An example of this is the Kleenex tissue. This individual product has been branded so well that for most people it has become the generic name for tissues, or a company can focus on their family of products.
Mercedes is an excellent example of family product branding. The company has worked diligently to associate their brand with reliability and quality. So the expectation in the consumer is that this will exist no matter which car model they choose to buy, or a company can take an existing brand and extend it. Bose, a maker of high end speakers, is an example of this.
Bose became a strong brand by selling one type of speaker. But once those speakers were successful and known for their sound quality, Bose began to branch out into headphones and surround sound speaker systems, while still maintaining their strong brand. OK, good job.
In this lesson, we learned about the basics of branding, including product differentiation and the danger of substitute products. We also discussed a few branding strategies. Thanks for your time, and have a great day.