Branding is defined as creating an individual name and perception for your product, company, or idea through marketing measures.
Branding can be associated with trademark, which includes elements such as name, colors, logos, symbols, tagline, and packaging. Trademark provides exclusive legal use of branding and all of its related elements. This means that no one else can use your particular color scheme or logo.
EXAMPLEYou can't have two products called Coca Cola because once trademarked, it gives Coke the exclusive rights to use that particular name. Mercedes Benz is another example; no one else can use this particular symbol on a car, because it's a trademark and it provides Mercedes Benz with exclusive legal use of that particular symbol.
Product differentiation is defined as 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 the organization. The last part of that definition describes something you may recall from an earlier lesson, called the target market.
Product differentiation is important because it is used to create brand loyalty with a particular brand or product. When customers are loyal to a brand, they will return to that brand for repeated sales. Customers view that product as unique.
Harley Davidson is another great example. When you buy Harley Davidson, you're not just buying a motorcycle. You're becoming a part of a brand loyalty family. You're differentiated because of the image that Harley Davidson portrays, and if you buy into that differentiation, then you're more likely to buy your next motorcycle from Harley Davidson as opposed to Honda or another motorcycle manufacturer.
A substitute products is a product that a consumer would select in lieu of another product. Now, branding is important here because you don't want people substituting another product for the one that you are selling.
EXAMPLETake Starbucks versus Folgers. You want to make sure that consumers are buying your particular brand of coffee and not substituting it with another.
EXAMPLECoca Cola is another good example. Coca Cola wants to make sure you keep buying their product. They brand it in a particular way to create a differentiation between the product and something else, and to keep you from substituting a product like Pepsi for Coke.
Companies have a choice in branding strategies, or how they brand their products or their company.
|Individual branding||Involves branding a particular individual product||Coca Cola makes a lot of different beverages, selling everything from water to juice to coke. However, they brand each one individually. On the one hand, this can create big gains for the individual product. On the other hand, there are a lot of things to keep up with when branding in this way. Consumers don't necessarily associate a particular brand of water with Coca Cola the company; they associate Coke with the company.|
|Family branding||Consists of branding a family of products or a company as a whole||With Sony, you're buying the brand name. You're not necessarily buying the individual camera, camcorder, phone, or PlayStation. You're buying the Sony product or the Sony name.|
|Brand extension||Launching a new product by using an existing brand name on a new product in a different category||Clorox is a simple bleach, but they've extended that brand name into other areas, such as cleaning products for your bathroom and kitchen. Brand extension involves taking a brand that's already known and established--like Clorox--and expanding into different markets, taking that good name along with it.|
Source: adapted from sophia instructor james howard