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The Business Case For Brand Building

By Chuck Schaeffer

While much has been written of branding in general, nearly all content and advice are developed around the CPG (consumer packaged goods) industries where branding has enjoyed mind share and measurable success for centuries. Technology branding faces vastly different markets, customers, messages, purchase cycles and challenges than the more traditional CPG industry. As branding for the technology market is less understood I will use the next six blog posts to flush out the most salient technology branding concepts and strategies. I intend to cover the following six topics over the next six weeks.

  1. The Business Case For Branding (this post)
  2. Why Technology Branding is Different
  3. Brand Building Challenges (Know Before You Go)
  4. Crafting a Winning Brand Message
  5. Brand Design
  6. Brand Strategies

More so in the technology sector than many other markets, effective brands have become the differentiating factor in an industry facing rapid hyper-competition, perceived commoditization and accelerated technology obsolescence. The simple truth is that there are only two marketing methods to secure client relationships. The first is to know your customers better than your competitors and leverage this knowledge to secure customer relationships. The second is to differentiate your solution through effective branding so that the solution is perceived to be unique or superior to competitive offerings.

A brand is an association of values and attributes linked to a name, mark or symbol that define a product or service's value to its customers. A brand represents a claim or promise by the company to buyers indicating what the product or service will do for them. The difference between brands and company or product names is that names generally do not carry defined customer associations. Names are merely labels, however, names can become brands when customers associate them with worth or other characteristics.

Successful hardware and software technology companies have long recognized that the best solutions alone do not make successful companies. Successful technology companies are not made from the best product or service, but rather the product or service which buyers think is best.

Brands are often recognized as a technology company’s most valuable asset in part because of the pervasive business advantages achieved. Brands promote key strategic benefits, including:

  • Attracting, acquiring and retaining more customers because product and service offerings demonstrate stronger differentiation and higher perceived value;
  • Sustaining price premiums and higher margins because the branded solutions are directly associated with increased value (not just decreased cost);
  • Increased negotiation power with customers, suppliers, channels, and M&A prospects;
  • Fending off competitive threats because customers prefer the branded solutions;
  • Increased company valuations, market value and intangibles or goodwill based upon stronger customer share, loyalty and predictable earnings streams;
  • Increased human capital performance stemming from superior recruiting, training, and staff retention;
  • Achieving a more profound and lasting impact within your professional market or personal community.

Brands invoke a prevailing perception in the buyer’s mind and thereby create powerful intellectual assets. Brand equity is calculated from the financial impact generated from those perceptions as demonstrated through customer purchase behaviors. Everything is branded and all prospects use brands to make purchase decisions. While recognizing the value of branding comes as a no-brainer for most, the process for designing, developing and promoting winning brands is a feat accomplished by an extraordinary few technology companies. Instead, many technology suppliers pursue a less thoughtful approach to brand building by dispensing company logo’d paraphernalia, buying piece meal advertising, making unsupportable claims, developing clichés and over spending on broad marketing campaigns. Branding is much more than these types of tactical measures or even linking a clever name to a technology offering. Brand-building doesn't depend on splashy advertising campaigns and big media budgets. Instead, leaders increase the power of their brands by improving the messaging of how their companies outperform their competitors. Branding is the process of making and proving certain promises to customers about delivering an experience, level of performance or result.

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READER COMMENTS

By Scott Calhoun.
Succinct and to the point - great article!

comments

By Mitch Wyeth.
This post demonstrates why branding is the new advertising. Advertising is dead.

Response: While I'm a brand believer, I wouldn't necessary blend brand with advertising. I also believe the death of advertising has been greatly exaggerated. Successful advertisers have reinvented themselves with each new change in technology as evidenced by a consistent increase in advertising spend for each of the last 10 years.

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