Branding- A brief introduction and the need
In the modern day game of Retail-Purchase, Branding has become one of the most important aspects of any business, be it large, small, a B2B, or a B2C corporation. A compelling branding strategy surely gives you a noteworthy edge in the ever-so increasingly competitive markets. But what does branding exactly mean? And how exactly is branding going to help you and your business to reach the soaring height you have always dreamt of flying at?
Your brand is your promise to the customer. Your brand tells the customer what they can expect from the product or the service you offer, and what sets you apart from your competitors in the battleground. Simply put, your brand is the way your customer perceives you. It not only describes your product and sets it apart from other available options in the market; it also helps connect you to the customer emotionally. They feel good when they buy from you, they have a sense of satisfaction and superiority, because they have put their trust in your brand, and they consider it better compared to the products on the offer to them by other companies. Moreover, a strong brand value sets you up nicely for pushing well beyond your physical assets, and also acts as an advert to the outer world, as the saying goes, “What people like, people talk about”.
Numbers don’t lie- The economic aspect of branding
Undoubtedly, branding has become one of the key components of marketing in the modern era. However, it also measures up a huge chunk of the invested capital to develop a brand and make it reach out to the masses.Development of a brand broadly consists of creating a striking logo, along with a catchy slogan to go with, and most importantly, a bewitching brand name. Though the elemental work lies with spreading the brand name to the masses, and everything in this world has a price tag, and the price tag on this one is hefty.
While the logos or the catch-lines do not make up a significant portion of the money spent on advertising, it might just turn out to be a little on the expensive side. Take the case of Coca Cola v/s Pepsi. While Coca-Cola spent 0$ on their logo, their arch-rival Pepsi had to shell out a whopping $1 million in 2008, for redesigning their logo.
According to a report by Association of National Advertisers (ANA) for the US, expenditure on brand activation added up to a stupefying $560 billion for the year 2015, jumping to $595 billion for the year 2016. In the same year, spending on brand activation accounted for a gigantic 59.8 percent of overall marketing expenditures.
Talking of India, the practice of brand development in the country is growing at a rapid rate. One such example can be seen in the seemingly infiniteOppo and Vivo hoardings everywhere. Also, in a study conducted by EY, about 90 percent of the organisations surveyed are planning to spend as much as 15 percent of their annual marketing budget exclusively on social media. Recently, the famous e-commerce giant Paytm has decided to invest INR 600 crores on branding and marketing alone in the Year 2016-17, as reported by Livemint.
Think of what a brand can do to your sales? Well, history surely doesn’t lie and paints a clear picture of it. Take the example of Coca-Cola (again). The journey of Coca-Cola began in a three-legged brass pot in the backyard of the founder, Mr John Pemberton in May 1886. The following year, sales of Coca-Cola averaged just 9 glasses per day (Well, that’s how much you and I can drink alone in a day, isn’t it?). Today, they have come as far as selling almost 1.9 billion glasses per day, and Coca-Cola is the only grocery product to have had sales of over 1 billion euros. Now that’s some gain!But, this gain didn’t come on its own. It involved a lot of hard work over sleepless nights, and more importantly, advertising the product and the brand. Following the opening year sales, Mr Pemberton engrossed a total of $50 and spent $73.96 on advertising (yep, you read that right).
The psychological aspect- Is spending money the only way?
Come to think of it, how many other ways can you think of, other than splashing the cash on building a brand and hence, building your firm? Well, there can be many, which is evident from the one case we have recently seen – Reliance Jio.
In the case of Reliance Jio, all of a sudden it came into the picture, blew every opponent out of the water and became the next best thing in Indian telecom sector. All of this in a relatively shorter period of just over 9 months. While we can all agree that Jio has now become a household brand in all of India, behind the reason of Jio’s success is months and months of brainstorming by some most brilliant minds this country has seen in the field of marketing. Instead of blindly following the conventional techniques of marketing like TV ads, posters, print media, and digital media, they played a masterstroke by letting the customers use the product without asking anything in return.
Jio commercially launched its services on 5 September 2016, and within the first month of commercial operations, Jio announced that it had acquired 16 million subscribers. This is the fastest ramp-up by any mobile network operator anywhere in the world. Jio crossed 50 million subscribers mark in 83 days since its launch and subsequently crossed 100 million subscribers on 22 February 2017. What Jio did right was not to charge a penny for the first 6 months, and letting the customer get used to it, while simultaneously managing to break their opponents (and the market), so that when it comes down to actually choosing between the products, they are the only ones standing tall. This is evident from the fact that when Jio opted out of providing free services and started rolling out paid plans in the form of ‘Prime Membership’, by 1st April 72.2 million Jio customers out of 100 million had opted for Jio Prime. This uncommon technique of brand making shows that no matter how you build a brand, it is extremely essential to build the brand.
Author’s take– How important is branding?
The author would like to conclude on a modest note – Branding / brand-building is evidently one of the quintessential aspects of modern day marketing, be it in any form. It doesn’t matter if you give away freebies, or spend money to be on air 24×7, or make the customer feel out-of-the-world special with your services if you want to grow and remain significant, you need to make a name for yourself. (Pun intended).
-by Udit Madaan