What is branding?

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Question - Is branding about:

• developing a compelling name and logo, and protecting it from brand pirates?
• designing compelling trade dress?
• the communications process, and being seen around a lot?
• premium pricing?
• licensing your brand?

Answer - We would say that it is all those things, and more. Our definition of branding is: "The creation, development and maintenance of a mutually-valuable relationship with a strategically selected group of customers, through the medium of a fresh and compelling elaborated proposition that is delivered consistently over time in everything that you do".

Key points

Branding is the business process of managing your trademark portfolio so as to maximise the value of the experiences associated with it, to the benefit of your key stakeholders, especially current and prospective:

• employees
• customers
• stock/share holders
• suppliers
• intermediaries
• opinion leaders
• local communities
• purchasers and licensees

Experts argue as to which stakeholders should be the main focus of the branding process, but this is probably the wrong question as their experiences are all inter-related:

• employees - the more your employees value your brands and understand what to do to build them, the more your customers, suppliers, local communities and opinion leaders will value them. The more attractive your brands are to potential employees, the more they are likely to want to work for you

• customers - the more your customers value your brand, the more they will buy your products and services, and recommend them to other people. They will also pay a premium for them and make the lives of your employees easier. This, in turn, will enhance the value of your brands to prospective purchasers and licensees. Research has shown that strong brands are more resistant to crises of reputation

• stock/share holders - strong brands multiply the asset value of your company (90% of the asset value of some major corporations lies in their intellectual property), and assure them that your company has a profitable future. They also allow you to afford to give competitive dividends to your current stock/share holders

• suppliers - suppliers like to be associated with strong brands as this benefits their own reputation in the eyes of other current or potential customers. You are therefore likely to get better service at a lower total acquisition cost

• intermediaries - retailers, distributors and wholesalers value strong brands as they improve their own profit margins. They are likely to give you more "air time" and shelf space, thus enhancing further the value of your brands in the eyes of your current and prospective customers

• opinion leaders - the media, politicians and non-government organisations are more respectful of strong brands

• local communities - supportive local authorities can make your life easier in many ways, and offer you better deals, if you have prestigious brands. Your local communities provide you with your work force and can be highly disruptive if they perceive you as damaging their environment

• purchasers and licensees - the question prospective purchasers and licensees ask is "how much more profit can I get for my products and services sold under this brand than under any brand I might build?". Strong brands can be spectacularly valuable. Fore example, the Coca-Cola(r) and Microsoft(r) trademarks are both valued at over US$50 billion, and that is just for the exclusive right to use the name - no people, no factories, no other assets. Many global brands are valued at US$5-10 billion

© 2004, Mud Valley ™ brand marketing community.

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