Not sure what “branding” means? Don’t worry! Branding is one of marketing concepts that is a bit ambiguous and can quickly become confusing, even for people who have studied marketing.
To understand what is product branding strategy, we need at first to know what is the definition of both of product and branding terms.
“In general, a product is everything that can be offered to a market, to satisfy a need or a want, including physical goods, services, experiences, events, people, places, property, information, organizations, and ideas” (Kotler & Keller, 2015).
This means that the product can be anything from a hotel stay, flight, language course, to clothes, foods, beverages, etc…
To illustrate the definition of a product and the role it plays in defining a brand, we will use the example of water:
As we all know, water is a free resource that every human needs to live and survive. However, it became a product the day humans and companies started commercialize it, for example by selling mineral water in glass and plastic bottles.
But water always looks the same, right? It is liquid and transparent. So, how can different companies sell the same product but still convince people to buy bottled water instead of bottled water from the competition?
The answer: by creating a brand.
“Branding gives services and products the power of a brand” (Kotler & Keller, 2015)
Branding is the process of giving meaning to an organization, company, products or services by creating and shaping a brand in the minds of consumers. It is a strategy designed by organizations to help people quickly identify and experience their brand, and give them a reason to choose their own over competing products, by making it clear what that particular brand is and what it isn’t.
The goal is to attract and retain loyal customers and other stakeholders by offering a product that always matches what the brand promises.
Who does it affect?
Consumers: As discussed above, branding provides consumers with a shortcut to making a decision when feeling indecisive about the same product from different companies.
Employees/shareholders/third-parties: Besides helping consumers distinguish between similar products, successful branding strategies are also adding to a company’s reputation. This asset can affect a range of people, from consumers to employees, investors, shareholders, suppliers and distributors. For example, if you don’t like a brand or don’t feel connected to it, you may not want to work for it. However, if you feel that the brand understands you and offers products that inspire you, you will probably want to work for it and be a part of its world.
Understanding branding strategies
Most companies started as a single product companies. Factors like desire to grow, increase manufacturing and marketing capabilities etc., tempt firms to become multi-product. As the number of products marketed by the company increases, identifying brand relationships becomes essential. Suitable branding strategies are designed to show how products and brands relate. Companies differ in their approaches in branding. Branding strategies include umbrella branding, product branding, line branding, endorsement branding, sourcing or dual branding, etc…
Product branding strategy
Product branding is driven by the customer’s logic. Each product is given a distinct brand name and given an exclusive name that will not be available for any other product. For example, Pepsi has Cola, Mirinda, 7ups, P&G has Camay, Whisper, Crest, Bounce, Ivory, Old Spice, Head and Shoulders, Gain, Ariel, Joy, Bold, Cheer, Tide, Pringle, Luvs, Vicks etc. HLL owns brands like Lux, Lifebuoy, Rexona, Pears, Liril etc.
Benefits of product branding
Branding a product offers a number of benefits to the company following it.
- Product brands is uniquely positioned and directed to a particular segment: In the product branding strategy, the brand is promoted exclusively. A brand is able to acquire a distinct position in the mind of the customer. What the brand stands for is understood and internalized by the market. The thrust is to make the brand gain its own set of associations and its own position.
- Product branding allows the brand to gain differentiation: The purpose of branding is to differentiate one brand from the others. Product branding does not share other products and does not participate in company associations. The company name slipped into the back seat. The product does not benefit from the company name. Customers easily communicate with product brands.
- Product Branding process allows the company to venture into unrelated areas of activity: Product brands are standalone. People don’t even know that they all share a common root in the company. For example, P&G’s brands belong to baby care, beauty care, feminine care, healthcare, fabric care, home care, food and beverage, and tissues and towels. This level of operational flexibility stems from its brand policy.
- It is much easier to appreciate the differences between brands when product branding is followed: customers know the brand that meets a particular need.
Marketers’ brands relate to all potential price points, benefits, and amenities associated with different sub-markets. Product branding leads to an appreciation of commercial differences.
- Product branding has the effect of making the company innovative and risk-free: The failure of one brand will not affect the prospects of other brands of the same manufacturer.
A new brand does not take on the reputation and image of the existing brand. So the manufacturer can offer an innovative product without any doubt of losing the existing brands in the market. Even if the new brand fails, people do not know that it is from a famous company because the name of the company does not back it up.
- Product brand avoids confusion in the market: the brand must represent a single product. Hanging multiple products on a name can cause confusion. A product brand represents a situation, an idea, a concept and a product in a clear cut way.
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