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Value of Branding : long-term profitability through increased customer loyalty

Value of Branding

Branding is a long term exercise, but one that reaps long-term profitability through increased customer loyalty.


Explain why a strong branding strategy is essential to the success of a company


Key Points

  • Branding is crucial to the success of any tangible product. In consumer markets, branding can influence whether consumers will buy the product.
  • Branding can also help in the development of a new product by facilitating the extension of a product line or mix, through building on the consumer’s perceptions of the values and character represented by the brand name.
  • Effective branding of a product enables the consumer to easily identify the product because the features and benefits have been communicated effectively.
  • Branding helps the manufacturer create loyalty, decrease the risk of losing market share to the competition by establishing a differential advantage, and allow premium pricing that is acceptable by the consumer because of the perceived value of the brand.
  • Branding enables the retailer to benefit from brand marketing support by helping to attract more customers (ideally ones who normally don’t frequent the establishment).

Key Terms

  • Branding: This process involves researching, developing, and implementing brand names, brand marks, trade characters, and trademarks.
  • co-branding: the combination of two or more well-known brands for marketing purposes, to strengthen one another’s preference or purchase intentions, or to reach a broader audience
  • Trademark: A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify for consumers that the products or services on or with which the trademark appears originate from a unique source, designated for a specific market. It also distinguishes its products or services from those of other entities.
“Branding is a way to create an emotional connection with a specific audience. ” – Troika, a network branding company.
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