Branding is a critical source of competitive advantage for firms. It is one of the only sources of sustainable competitive advantage, because your competitors can never duplicate your brand. This paper will explore the value of branding, to highlight the ways that a company can create, reinforce and leverage its brand to enhance corporate value.
Nature of Branding
A brand is a significant source of differentiation between products, and in many cases it is the primary source of differentiation. The brand is the name and marque of the product or company, and the value of a brand lies in its ability to communicate in shorthand a set of attributes to the audience (Wood, 2000). The more strongly the attributes are associated with the brand, the more effective the brand is.
Companies create their brands in order to convince consumers that these attributes are valid. Sometimes the attributes are related to the product, and other times they are not, but they are the attributes that the company wants to associate with the brand. The ultimate objective is to create widespread recognition of the brand among consumers, and immediate recall and agreement that the brand does represent the desired attributes. If the consumer shows interest in acquiring goods or services of that brand because of...
The message is repeated in all media, both advertising and in public relations communications, and through these repetitions an association is created between the brand and the attributes (de Chernatony, 2010). If the company wants to amplify the reinforcement, it can do so with added advertising expenditure -- some companies advertise extensively even though they are household names, just to reinforce the messages that they have built up over the years.
A key factor in brand reinforcement is that the brand message needs to be consistent over time, because inconsistency will reduce the degree to which the consumer associates the brand with certain attributes. It is also worth considering that the brand can be marketed to different audiences. To do so will allow for an expansion of the audience of the message. If the message becomes embedded in society, then people will spread that message on their own, so that a brand can become known and associated with specific attributes even without the need for advertising.
It is also important that the company defends against threats to the brand equity. For example, if a competitor…
