One of the most important aspects of strategy in modern business is “Branding”. Western companies were the first to realize the power of strong brands and invested heavily in building them. The big example is Coca-Cola. Then followed Japanese with Sony & Toyota leading their way. Only recently, the Eastern companies are realizing the importance of branding and today Samsung is benchmarked along with its top rival brands from Western World. In the past all these Eastern companies where functioning as a low cost manufacturing based for their Western counterparts.
There are many advantages of owning a powerful brand, not just an option of premium pricing. But building a brand is a costly and consistent affair. Also brand is often misunderstood merely as an advertising function and is therefore widely mismanaged.
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If I have to elaborate this, I would say that it is a mental impression of an experience offered by a product or service. An experience is the sum total of what we have seen, learn and undergone, and recorded in our memory. And mostly importantly we should not forget the fact that an experience is always coloured by our environment, our values, our beliefs, our social and economic standing, our cultural heritage, and our needs.
Traditional business people used to assume that product value as experienced by the customers and product value as measured by the company were one and the same. But in actual world it is not like that. Customer value is always perceptual as it is shaped by the subjective understanding of that customer and is, in fact, never objective. Therefore branding refers to all the activities that shape customer perceptions.
Successful brands have realize that although a product consists of a bundle of tangible & functional attributes, a brand’s offerings go much beyond that. For example: Nike is not just a shoe brand that people like to wear. Nike conveys the attitude to do things, image of being an optimistic and American culture portray by its tagline or catchphrase “Just do it”. Similarly if we study the most successful brand of our time “Apple” you will find that the whole brand essence of Apple is power to the people through technology. Apple’s advertisings are clearly recognizable and Apple has established a "heartfelt connection” with its customers.
Brand culture is formed when images, stories and associations are created around the product, mostly by the company and customers. In general, we can say that the brand value is the difference between what a customer is willing to pay for a branded product and a generic product. Brand story are always built around product experience, symbolic value, product features or relationship values to create right perception in the mindset of the consumer.