A Look into the Meaning of Branding Identity and Its Importance to Businesses
Over the past few years, a lot of discussions have been made about brand and its significance in marketing. As a result, there are now a lot of different explanations and definitions to the concept of branding. While there are various ways of interpreting this idea, almost all business owners will definitely agree that branding is vital, and thus creating a “brand identity” for any business or organization must be part of their long term plans.
One of the challenges companies face when it comes to developing their branding strategy is how they could actually measure its financial benefits not only from short-term, but also long-term perspectives. The questions usually are how a brand identity may contribute to the financial status of the company as well as what its value really is should it not be able to bring in a lot of profits to the organization.
What Is Branding or Brand Identity Exactly?
This article is written using a certain and clear definition of brand identity. It is what represents the way a company chooses to be perceived in the market. Branding identity is also about the principles a company stands for and of course, it is the one that makes a promise to its consumers or customers.
How Significant Is It to Have a Strong Brand?
There have been a number of studies done to identify the benefits of having a strong brand. According to research, companies can benefit from strong brand identity both financially and non-financially. Here we will be focusing on the six benefits that can directly affect the financial performance of a company. These benefits build on each other and are thus interdependent. What’s amazing is that once a company attains all the six financial benefits of branding, it would simply go back to the first benefit and repeat the entire process.
These are the 6 financial gains of having a solid brand identity:
1. Brand identity leads to a price premium.
Have you ever wondered why some people are willing to spend thousands of dollars for a Jaguar instead of just a Ford? These two types of cars are virtually the same, except that the former has additional accessories and options. You may be surprised to know also that many cars, even exotic cars, are made by a single company but are labeled and marketed in different ways. The thing is, the value of products depends a lot on the brand. Some high end brands tend to affect consumers’ minds more than the quality and performance of the products.
2. A price premium affects the perception of quality.
As they say, when buying expensive and branded products, you actually get what you pay for. If Gucci is more expensive than any other brands of watch, it simply implies that maybe Gucci offers the best quality. This is what most consumers think, at least. But this isn’t necessarily true. The truth is that there are many other less expensive yet good quality watches out in the market. Then again, this popular belief that price reflects quality still prevails.
3. Perceived can lead to consumer usage.
Consumers always have a tendency to go for those brands that they think are quality brands. This is also one reason for brand loyalty and repeat buying. For consumers, products are worth the cost if they get good experience from such products.
4. Perceived quality contributes to the ROI or return of investment of the company.
What could be more surprising is the fact that perceived quality is more powerful than any other marketing strategies. Brand identity creates an image of quality that then leads to the company’s profitability. This is achieved through the increase in market share and increased prices. In the end, an improvement in the product’s perceived quality results in better ROI.
5. Consumers connect value to quality.
This is almost the same as what the second benefit is all about. Should a brand establishes an image of better quality compared to other products, it will make consumers think of high quality brands as better value.
6. Perceived quality can set a brand or a company apart from the rest.
Even the most successful companies are consistently finding ways to make their company and products unique and different from others. By using an effective branding strategy, they are able to create an identity that people can very easily relate to. This will then lead to benefit number one again.
All things considered, it makes a lot of sense that it is very important for companies to invest in brand identity building. As a matter of fact, branding should always be a part of their long term plans and also be considered a continuous process. It is through this that companies can really enjoy the benefits of having an established name in the market.
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Cedric Loiselle is an expert writer providing high-quality articles to a various range of niches including health and beauty, business and finance, as well as lifestyle and fashion. Whether you’re looking for the most up-to-date health tips, or looking around to find the best gift to give to your loved ones like designer bags and watches by Gucci Montreal, you will surely find his articles to be of great significance.