Functions of Branding


In its most basic function, branding is a method by which a product is identified. A few decades before, branding was a method that was used to introduce a product into the market. The growth of the product as a sought-out brand was to happen on the merits of the product’s quality and market acceptance. However, with changing times, branding has come to have an important role of its own in the life cycle of a product. As before branding still helps to identify a product. At the same time, branding also has many other functions that in turn have a psychological impact on the customers.

Today branding and its associated functions have a very important role to play in the success of a product. More and more product managers are finding that branding has a function of its own in the developmental stages of a product. For example, a well-known brand can have an extra edge in being accepted by the new end users. This is because brands have a lot of psychological effect on the user and the success of one brand can in fact ensure that successive brands that are produced by the same company will be well received by customers. Branding has so many functions in modern management. Brands can create wants in customers and motivate them to buy the product even if they do not want it. Hence, it may be seen that brands have a powerful impact on the user. Today, business managers spend a lot of time and money in order to create a successful brand and the effort they take to create it well justified.

Changing roles of branding

Branding as a means of communication

One of the main functions of branding, other than being just an identifier of a product, is that branding has become a medium of communication for the company with the customer. A brand name has become a comprehensive message that conveys a lot about a product to the customer in the least possible words. Consumer communication is a marketing effort that puts across the views of the company to the clients. Consumer communication can happen from many perspectives. Communication can happen between the company and the customer as a direct customer service effort or as advertisements when the company propaganda is put across to the consumer. It must be noted that today, advertisements are based on brands and the communication that happens between the company and the customer through the ads depend on what messages are to be conveyed by the brand to the potential customer.

Businesses use all possible means to communicate with the customer. Communication may be subtle when they register in our memory without us knowing about it, or it may be more emphatically done through deliberate and loud advertising. Subtle advertising is a technique through which simple messages, which are associated with the value is projected to the customer through popular media. This is part of the brand-building exercise. Perhaps we may be aware that we attach value to a product almost ‘automatically’, which after careful analysis can be traced to ads that were subtly imprinted in our memory. For example, the new product of a popular company is spontaneously thought to be good by our minds because we have good experiences with the previous product and so we tend to generalize. Similarly, when popular stars endorse a product, a subtle message that the product is being used by well-known personalities is imprinted in our minds even though the advertiser does not say so explicitly.

An example to consider would be the sports goods industry. The sports industry has been experiencing a surge in growth over the past few decades due to many factors. Important among them is the exposure and importance that sports and exercises have gained over the past few years, as a means of keeping healthy and fit. Today more and more people are drawn to sports and exercise regimes. The sports apparel and footwear industry today, have outgrown the traditional market niches and have begun to cater to the needs of non-professional sportspersons as well. This is because an increasing number of people are discovering the advantages of keeping fit in a world that is increasingly being affected by stress related to one’s profession.

Similarly, a better grasp of the advantages of using sports gear even for non-professional needs exists among the public. This has of course been made possible because of better information dispersal, and brand advertising. Whatever the cause, it has encouraged people to buy sports goods for their everyday needs. An interesting phenomenon that is happening in the market is that the sports market and the fashion industry have found the importance of going together to capture new markets. It may be said that the potential for sports apparel and footwear is tremendous and will certainly grow in the coming years

Branding as a source of motivation

It must be acknowledged that we are asked to buy a range of goods that may or may not be useful to us. The irony is that many of the goods that we buy are in fact useless to us and the marketer is able to promote his product by creating value for it in our minds through proper branding and advertising. Branding a product can often motivate people to buy a product. It has been observed that customers often settle for products merely on the merits of the brand name. It may be commonly observed that companies have specific targets on which their products are focussed. For example, a garment manufacturing company may have a specific product that is focused on a specific age group. Motor vehicles may target the gender of the consumer to create products.

These products have an identity of their own and hence the customers are able to identify with the product. This process of identifying with the product is the major hurdle that product managers try to overcome through branding. Once the customer believes that the product meets his demands and aspirations, he or she becomes loyal to the brand and will not switch to another brand unless a very compelling reason crops up. Here the brand is motivating the customer to stay loyal to it. In return, the brand assures that it will provide what the customer expects from it.

Branding as a means to create product value

The subdivision of a product segment into smaller segments is ample proof of the fact that consumers are being led to believe in the novelty of the goods that are being sold today. For example, most of the brands available as personal care products today would have been marketed under ‘toiletries’ a few years before. The segment has been divided into two or more segments so that customers can be goaded to buy products from all three segments. The change in perspectives is very evident.

Branding also helps in developing new products for the firm. The importance of new product development is very critical for companies. In fact, it is the basis on which the operations of the company depend. New product development also provides the company with operating profits. In this regard, the product does not merely limit itself to the manufacturing companies alone. In fact, new services are also important. Hence, for companies in the service sector the formulation of new services are very important while in the manufacturing sector, the formulation of new products and new imaginative services are important for the company.

The reason why the development of new products is important lies in the fact that any product has a limited time of demand and after that demand phase wanes, the product loses its charm in the market. Hence, we see many innovative products becoming obsolete after some years of dominating the market. Progressive companies need to deliver new products that can build on the reputation that was gained by the previous product. Another reason which compels change is strong competition. When a product is challenged by similar products in the market, Manufacturer’s resort to updating the product at regular intervals so that they can compete with other products in the same market segment. Usually, such products will have a short life span owing to the changing preferences of the customer.

Branding as a method of asset building

Today, every company is involved in developing its assets. Assets are not simply the tangible aspects of a firm. Consumers, as well as goodwill, are assets of the company and it is a company’s responsibility to maintain and develop its assets to meet its objectives. Branding has a major role to play in developing the assets of a company. This is because branding plays a role in the overall makeup of the business strategy of a firm and can make or mar the prospects of a company.

Businesses are built on strategy, acumen and trust. Strong business acumen identifies the business, strategy executes the idea and carries it through, and trust is the mainstay on which successful business rest. Trust in business is controlled by both internal as well as external factors. While the internal factors are related to the administration and general conduct of the business, the external factors are those that determine how the business relate to the places and people where it is established. There are many factors that contribute towards building trust between entrepreneurs and their counterparts in any government. The biggest factor that any business manager would look for before investing in the current and future stability of the business and both short term and long term benefits from the business. This is particularly so when a new business is being established in a country.

There are many examples in the business world, where new products that were introduced in new markets could stand against the competition solely on the power of its brand image. This is true in any kind of business where the customer in a new market assesses the quality of a product on the strength of the brand or previous brands of the same company. A good brand conveys the idea that the company that owns the brand will be responsible for the customer and will not cheat to make money.

This reliability that is afforded by the product is very important in the expansion into new markets. Rust and colleagues have found that the customer of the 21st century will be more conscious about his privileges as a customer. The business houses will pamper the customer more, and this, in turn, would enhance the spending of the customer. A brand that conveys an aura of fine quality will be preferred by customers who would be ready to pay for the services and his/their prime concern would be the quality of the service rather than the money, which needs to be spent for the service.

Branding as a marketing tool

Marketing is still being misunderstood as glorified selling by many people. The requirement to sell has overshadowed the business scene to such an extent that executives do not see any other objective in marketing. The fact that selling is just another part of marketing management is a very high-flying concept that many find difficult to believe. Even companies, which have had huge profit margins in the past, are beginning to feel the heat of the competition. Moreover, globalization has thrown open the protected market of many countries to international brands. The immediate result of this is that all the activities of marketing are seemingly becoming exclusive to companies with bigger financial outlays. Even after spending so much money on marketing efforts, companies are not able to gain the desired benefits from their efforts.

On the other hand, we have seen that many smaller companies with comparatively very small marketing budgets are able to penetrate the market and are able to become popular with the customers. The reason is that such companies have adopted effective strategies than relying on raw money power and propaganda. The lack of sensible strategy and the failure to use technology, combined with obsolete methods of marketing seems to be the bane of many companies who are not able to make a successful thrust in the market. Most ideas are either short-sighted or serve only the immediate purposes of the company. Lack of professionalism is very evident in the management of many companies that have great potential. A very important aspect of business that still is a grey area for many business organizations is effective customer management.

Branding as a sign of product diversity

Companies cannot stay complacent to changes that are happening around them particularly when the market indicators are very critical of the functioning of the firm. In business, everything has a life cycle. Products, services, ad campaigns etc. have a vibrant period of activity after which it loses its sheen and becomes a liability on the company that promotes it. Even concepts have a life period after which they lose their relevance. Ironically, the concepts that define marketing also have had to change with time, since they lose their relevance with time. Essentially marketing, in the form of branding, involves the sum total of all activities that are used to make a product an undeniable part of the customer’s life.

The strategies that have been traditionally used for this objective have changed with time. The strategies that have evolved over the decades were very much influenced by the prevailing business atmosphere and social issues of that time. It, therefore, leaves no doubt that the companies listed in the article would have made the required corrections to their marketing strategies in order to cope with the problems in the marketplace.

The concept that product sales are solely determined by needs and wants is applicable only to the third world or the lesser developed nations where the novelty of the product may offset critical thinking into its quality or finer details. In advanced nations, the new paradigm is the demand for exclusivity, which is provided by branding. Today customers have demands that can be supported by sheer purchasing power. Innumerable products are considered as a social status. The role of a marketer is to point out to the customer that a particular product would enhance his or her status. This has been the main idea behind branding. The power of branding is very evident in the textile markets of the world. High-quality cloth is manufactured in Asian countries, which is sold under leading multinational brand names.

The brand name guarantees the quality and status of the product. Branding requires considerable resource allocation from the company, particularly long-term investments. Almost all companies have positioned their products to satisfy a particular niche of customers. Therefore, the number of products produced by a single company has increased which cater to the requirement of different types of consumers. Exclusivity is a very potent marketing concept that can compel people to go for a product even if they do not need them. A powerful brand is said to have a consumer franchise, which will ensure that consumers maintain their loyalty to that particular brand. The success of a brand also ensures that future products of the company attract market appreciation without much effort.

In their effort to build effective brands, name and character licensing has become a big business in recent years. Manufacturers pay huge sums of money to use popular names and characters to vouch for their products. Customers especially children often seek out brands that have the name of their popular cartoon stars. Although the industry is ever-changing because of the changing aspirations of the public, it has great potential to cash in on the temporary mood of the public.

Branding as a means to influence consumer behaviour

Branding also plays an important role in consumer behaviour. Although the influence of social factors is more prevalent in younger people, even elderly people are seen to be very conscious of social acceptance, with regard to their likes, dislikes and decisions. For example, in the automobile sector, it is seen that elderly people would not generally opt for an SUV and would, on the contrary, opt for a luxury sedan. On the other hand, young people would, if given a chance, opt for the SUV. The difference lies in the image that each group tries to project about themselves, which in turn has been reinforced by the communication between the brand image and the psychology of the consumer.

Young people always try to project a carefree, unbridled attitude, while elderly people would like to project a mature, understanding and powerful appeal. Therefore the elderly people would not like to project a reckless attitude but would prefer to maintain a dignified and powerful profile. The same attitude difference holds true in all products and has compelled manufacturers to produce different products for different segments of society. In this case, the SUV would be preferred by the elderly, more as a means of transport while on a holiday than as a daily commuting vehicle. On the other hand, a young executive would be very happy to drive the SUV to work, to impress his colleagues. This is where the market positioning of the product becomes important.

It may be said that consumer behaviour is fleeting. This is because consumer attitudes changes as the person grow or matures. Hence what is important for a consumer at a particular age is not any more important to him at a different age. Similarly, consumer preferences vary across different cultures. The objective of a good marketing strategy is to ensure that the product is liked by the maximum number of people from various backgrounds. This will ensure the popularity of the product among a wide variety of consumers, which would ultimately help the company to sell its products to the maximum number of people. In the case of SUVs, the initial attraction of the vehicle is its power and ruggedness. However, as the owner grows and has a bigger family, his priorities will change and the expectations from his vehicle are modified according to many situational needs.

The SUV caters to the need of many diverse kinds of users and so, has been a favourite of the sports enthusiast, the weekend traveller, the executive, or the entire family that wishes to travel together. In addition, reliability, ruggedness, and consumer confidence in the vehicle are very important factors that have enhanced the reputation of this class of vehicles. The SUV is considered to be the ideal vehicle for big families and those people who wish to travel together with a lot of their things. Culturally, some families prefer bigger vehicles because their families are bigger and a vehicle that can accommodate everyone has a very important value.

Marketing communication is a very important factor that determines the success of a brand.  An advertisement also creates a lasting impression of a product in the minds of the consumer and is a very important aspect of branding.  Almost all advertisements for any brand of SUV highlights comfort, stylish interiors, powerful engines, four-wheel drives and a heady mix of power and style. In fact, the SUV could be the only class of vehicle that is critically rated for the balance between power and luxury. This is because of the expectation of performance from the vehicle. An ordinary sedan may be forgiven if its engines sputter under extreme torture. One such incident is enough to send an SUV brand out of the market.

This is exactly the high point that advertising campaigns try to highlight for the SUV. Performance is a big issue that each ad campaign tried to highlight for the SUV. Similarly, performance is the single factor that has placed the vehicle in a unique slot of its own. In spite of its stylish interiors and exteriors, the SUV is always positioned as a rugged machine that takes the beating to keep the passengers comfortable. This ruggedness has been the hallmark of SUVs for a very long time. In fact, it is not the luxuries, which the car offers that are the highlight of the SUVs. The fact that these luxuries are provided even in difficult situations (bad roads, high terrain etc) is the high point of the vehicle and this is what has attracted people to it.

Branding has a much larger role in the life of a product than merely identifying it in the market. Branding, which encompasses creating a unique product that is focused on customer needs, is a part of the marketing activities that are pursued by a company. It is a process that tries to convey the message that a product is specifically made for a customer. The message conveyed by branding becomes personal when the customer receives it. Hence, it has a very important psychological effect and it may be safely said that brands affect the mind of customers to such an extent that it creates value in the human mind.

As far as the customer is concerned, identifying a product with oneself and attributing value to it, are the first steps that ensure the success of a brand. In this context, it may be said that branding helps in creating a space for the product in consumer minds. Branding also has other important functions which help product managers to create a specific niche for the product. In the product life cycle of the product, this niche is important to ensure the lo9ng life of the product. It may be often seen that similar products compete with each other by trying to break into the niche of each product. Branding also requires a lot of responsibility from the producer of the product. This is because a flaw in a brand can affect the mind of the customer who may attribute a low value to it even though it may have many good qualities. Hence companies must understand that branding is the culmination of all activities that are performed in the creation of a product. Hence, branding as a part of business strategy has to be given much more importance by companies.

Works cited

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