We have mentioned brand names a few times. We said that a brand name can be a good way of differentiating a product. Brands which are well known and trusted can serve as a shortcut for consumers trying to choose between competing offers.
If two products are similar, customers are more likely to buy the product with the brand name they know, rather than the one they have not heard of.
An interesting example of how important brand image is can be seen from taste tests carried out by Coca-Cola and Pepsi Cola. Respondents were asked to decide which of the two cola drinks the cola drinks they preferred.
When they were allowed to see the brand of the drink there was a marked preference for Coca-Cola — 65 per cent preferred it. However, when the respondents were blindfolded the distinction between the two brands was reduced significantly. In this test 51 per cent of testers preferred Pepsi.
The differences between the two sets of results suggest that customers ‘taste’ both the drink and the brand image. The brand image adds value to the product or service in the mind of the customer. When they see the familiar Coca-Cola package and logo, value is added on an emotional level.
Branding can provide benefits for both buyers and sellers. Customers beneﬁt because they can immediately identify specific products that they do and do not like.
Without brands, product selection would be quite random, with customers having to read the packaging every time to find out about each product and how it matched with what they wanted. This beneﬁt of branding is the reason so many companies use an existing brand name for a new product. They hope that the values which attach to the brand name will attach to the new product in the mind of the customer and make them more likely to purchase it.
Sellers also beneﬁt because branding makes repeat purchasing easier for customers, which in turn may lead to brand loyalty, something all companies try to engender. Creating brand loyalty also permits companies to charge a premium price for a product.
For example, the manufacturers of Nurofen, a pain-relieving product, charge more than the manufacturers of generic products which use the same active ingredient (ibuprofen).
However, these benefits do not come free. Brand owners will spend large amounts of money on advertising their brands. For example, Coca-Cola spends over £12m a year in the UK on advertising, and Andrex (toilet tissue) over £8m.
One of the outcomes of this high spending for Andrex is that the brand is linked to the advertising symbol used — a Golden Labrador puppy. The attributes of the puppy — softness, gentleness — are attached to the product itself.
This outcome also allows Andrex to link its name with a charity, Guide Dogs for the Blind. This works well, as this type of dog is a popular choice of guide dog in the UK.
Today’s great brands have their own identity. If you ask someone to describe a brand they will usually use adjectives to describe its qualities. Branding is to do with the way customers perceive products, not just about the name or the symbol associated with a brand.
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