The Role of Branding and Its Critical Value to Business
The concept of Branding is relatively very new and fresh, especially in business sphere. Following down the foundation of Branding processes, it is necessary to go back into late nineteenth century. As Wally Olins (2006) demonstrates, at that time very few successful companies introduced design into their businesses for the sake of making employees feeling proud of their work place and working in comfortable conditions. That was usually in architecture and product design itself. It had a solely glorious context under it, rather than profit-driven. Therefore, the concept of demonstrating the status and celebration of the achieved results is considered to be one of the roles of branding, but surely not the most important one.
Only later American architects noted that design could be a source of attracting customers and therefore revenues. That particular moment in time, approximately 1950s, is considered to manifest the initiation of the term ‘corporate identity’. It was referred as a process ‘to create a coherent corporate whole associated with specific theme, attitude or personality’ (Olins, 2006). The importance of this operation was growing in a fast pace as results were demonstrating higher profits and ROI. Therefore creating corporate identity matters were discussed even on top-management and board of directors levels as a strategic direction for the company. ‘Corporate identity’ was now seen as a mean of communicating clear and important messages to the audiences on all levels, from shareholders to employees, - that is another very notable role of Branding in Business. In order to get a better linkage with the customers and to smoothen communication between managers and designers, organisations started involving marketing people into the corporate image creation process.
The evolution of Branding then progressed into the introduction of packaging and new product design into business strategic concepts. Simultaneously, interior design was brought into the business context in order to create a more efficient service layout and raise customers’ satisfaction. As Wally Olins (2008) pointed out, the term ‘interior design’ was now referred as ‘brand experience’. Consequently, the improvement of the physical aspects of products and services is another vital function of branding.
Branding, unlike design, corporate identity and others, has the most direct link to calculation of results and profitability. A good example of this is the fact that in 1988 Philip Morris purchased Kraft for six times more than its paper value. That was referred to as a brand value (Firdaus, 2011)
Nowadays Branding is a remarkably comprehensive concept, which is vital to any business, from SME to world’s biggest corporations. It has to embrace such areas as graphic design, environmental and interior design, media, advertising and IT operations, consumer behavioural issues, organisational culture, reputation, marketing practices, such as research and forecasting and many others.
Branding is the only tools created up to now, which is able to communicate all the company’s values and target messages in one. Everything else, for instance images, advertising, mission statements, sustainable strategies, etc, all those address only one subject at a time, unlike the complex result of branding strategy.
Nowadays, in the mass customisation society, business operations and innovations are not bringing any competitive advantage, as companies are able to copy each other products’ features and techniques relatively easy (Neumeier, 2006). Therefore branding may be the only and the strongest differentiator. In such cases the real value and importance of a brand can be calculated. Modern society is characterised as ‘information-rich and time-poor’ (Neumeier, 2006), that is why the consumers’ choices are based more on symbolic attributes.
Branding is believed to be the best way to build customers’ loyalty. As an example, Starbuck’s customers say they are sure what they are about to get there when they see the familiar sign at any corner of the world… It is all about trust and branding is able to create this trust like no other process.
The word ‘brand’ can be associated with everything, from retail products, supermarkets where they are sold, up to countries. Brands have an enormous influence on the world’s population and are currently directing and even manipulating people and, therefore, must be applied and used ethically and with care.
Nowadays companies and corporations are operating more and more sophisticated branding programmes. Now brand value is appearing regularly on balance sheets, especially for larger businesses therefore the importance of branding has been realised and proved. However, the intangible value of a brand is often much greater than the corporation’s tangible assets and is still very vague and hard-to-measure aspect.
Bibliography:
Olins, W (2006) On Brand: Branding and Money Making, Chapter 10,
Olins, W (2008) The Brand Handbook: Definitions in Branding, pp.10-22, London: Thames & Hudson
Neumeier, M (2006) The Brand Gap: Introduction, pp.8-13, Berkeley: AIGA
Firdaus, I (2011) The History of Branding. Branding history [online], retrieved from http://www.brandinghistory.com/2011/02/the-history-of-branding/, [accessed on 17/09/2011]
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