The brand adds elements that somehow differentiate the offer from others aimed at satisfying the same need. These differences can be functional, rational or tangible, that is, related to the performance of the product identified by the brand. Or, they can be related to what the brand represents – and therefore are identified as symbolic, emotional or intangible.
Branding helps consumers identify the source or producer of a good, allowing them – individuals or organizations – to attribute responsibility to a particular producer or distributor; or to evaluate a product according to how it is “branded”. Consumers discover which brands meet their needs and which do not mainly from branding activities: the main communication/advertising medium to ensure a competitive advantage.
Purpose of branding
Branding is about giving goods and services the power of the brand. And so it is all that is needed to create differentiation. To “brand” a product, you need to give it a name and use other brand elements to ensure that it can be identified and explain to consumers what the product is and why they should take it into account. Branding aims to create mental structures that help consumers organize their knowledge of products and services, so that they can make informed choices, while creating value for the company.
For branding strategies to be successful, consumers must be convinced of the existence – within a category of goods or services – of significant differences between one brand and another and distanced from them the idea that all brands are the same: a brand equity must be communicated that is capable of truly differentiating the brand.
Brand Equity
Brand equity is a complex intangible asset consisting of the added value brought to goods and services by a variety of factors: brand loyalty, brand awareness and/or knowledge, perceived quality, mental associations, distribution channels, the way consumers think, feel and act with respect to the product, the price and profitability of the brand for the company. For the latter, brand equity represents an important intangible asset with psychological and financial value.
According to Aaker, brand equity or brand heritage is therefore based on intangible assets that can be grouped into five categories:
brand loyalty or brand loyalty
brand awareness, that is, notoriety and recognition of the brand name by customers
perceived (overall) quality
brand associations
other exclusive company assets such as distinctive features, patents, registered trademarks, etc.
Brand equity can therefore bring added value to the company and its customers (or subtract it) to the extent that these assets contribute to interpreting, processing and storing large amounts of information on products and brands. At the same time, they affect the greater or lesser certainty that the consumer has when making a purchase choice; in practice, the associations made by consumers with a certain brand can determine the purchase choice, the perceived quality and the customer experience. According to the American scholar, in fact, before the consumer immediately thinks of a certain brand, there are four intermediate phases:
Unaware of a brand: step in which the customer does not know the brand of the product: therefore, for him the brand does not exist
Brand recognition: phase in which, thanks to a superficial knowledge of the product, the brand begins to be partially appreciated
Brand recall: the word recall itself makes one think of a brand recall when the customer thinks of a service they need in a category of products/services
Top of Mind: the moment when potential customers immediately think of a specific brand for a specific category of products/services
Companies with a strong brand, therefore with a very positive brand equity, can benefit greatly from brand value, since consumers are willing to pay more for that product (with the same features and quality as a competitor) only for the brand value. On the other hand, it is negative if, given the same circumstances, consumers respond less favorably to the marketing activity.
All this leads to focus on several benefits deriving from a positive brand
