3.3. Benefits of Branding
The benefits of effective branding strategies can be categorized under the broad heads of financial benefits as well as social benefits. Peter Doyle (1990) had gathered various statistics that provided evidence of a link between brand popularity and company’s profitability, some of which has been represented.
- Brands which were found to have a market share of about 40% were seen to generate about three times higher return on investment compared to those who had a market share of only 10%.
- In the UK grocery market alone, it was seen that the top brands generated six times more return on sales when compared with the second leading brand, while the third as well as the fourth brands were seen to be unprofitable.
This is because brands represent an asset to their owners. They are an important intangible asset on the company’s balance sheet as they can reap several benefits in the form of niche creation for the products of the company in the minds of the consumer which assures of high sales that occur due to brand loyalty as well as brand recognition. Moreover, it also assists in the total quality management processes within the company through the conduct of its aim of achieving zero-defect output along with production of high quality output on a sustainably consistent basis.
1.4. The Road Ahead – Capitalizing Brand Equity through Brand Extensions
The success of brand management strategies lie in the effective and efficient segmentation, targeting as well as positioning of the brand (Lane & Sutcliffe, 2006). It is not a one time process but an ongoing process which call for substantial planning as well as efforts. Respected brands have high brand equity. Brand equity can be defined as the complete set of behaviors and associations on the part of the brand’s consumers, channel members, as well as Parent Corporation on a joint basis that assists the brand in commanding greater volumes and higher margins than in the case of absence of brand.
Brand Equity equips the brand with a much stronger as well as sustainable differential advantage in the market (Chay 1988). It is because well established brands have the potential to command premiums provided that the target customer base is the same, through the process of brand extensions (Tauber, 1981). In simple terms, brand extensions imply that an existing brand is used to market a new offering to a similar customer base which the brand had been catering to.
1.4。未来之路 – 凭借品牌资产品牌延伸