Stating the obvious

November 25, 2009

Effective branding creates value.

All companies engage in branding. Most companies are not brands. All companies would benefit from being a well-known brand.

Branding is not a cosmetic exercise that improves the company logo nor is it related to the quality of the company’s advertising. Branding is what happens every second of every day in every company, and usually it is done without a plan. It is not something that only the marketing department does. Branding is what the whole company does.

The value of a brand comes from the fact that it has meaning for customers. It is a guarantee of quality, be it a car or chewing gum. Brands are brands because people understand why they prefer it over the other product, often paying a price-premium.

Brands are symbols. Branding is a business process that can create brands. Symbols such as Porsche, Coca-Cola and Diesel are meaningful only by consistently delivering on a promise that the companies must live up to day-by-day, assuring the product’s quality, availability, desirability by internal business processes. If these processes are not consistent with what the product should mean, if there is no perceived difference between product A and product B, if service is promised but rarely delivered then the branding process will never end up in a brand.

Most Estonian products are not unique products. The same products exist somewhere else. The only reason for their success is geography. They are sold here. However, since there is a lot of competition on the Estonian market, and there are lots of similar or identical products in different packages, but almost no product difference or inherent meaning, then the only argument producers are making today is that “our’s is cheaper”. Selling everything cheaper doesn’t make companies successful, nor does it help people in the company earn more money because the company is earning less. In fact, everything cheaper all the time can only lead to smaller salaries and even greater pressure on compromising on quality.

Everything is bought and sold on two considerations: price AND quality. A well managed branding process shifts attention from the price of the product to the value of it. Value is emotional and every decision made by customers is emotional. Only a compromise is rational. Branding is the art of creating value.

Create some today.