Branding – What is it All About?
Why is branding so important for small businesses? We all know the world’s most successful brands that have established large followings and have created impressive value in goodwill and intangible value for the firm (Shell, Coca-Cola, Xerox, Apple, etc). But what does branding mean to the average sized company, and how do small and mid-sized businesses compete well in a flat world? In order to understand this, we must first visit the past to take a brief look at history.
After the Great Depression, companies created value entirely through the superiority of their goods and services. Manufacturing techniques and service quality had a high degree of variance between the large market leaders and the smaller firms attempting to compete. That difference created the draw for consumers to make their choices. As manufacturing and competition grew up, product and service differentiation began to shrink, and the focus turned to creating product identity that distinguished products that were virtually indistinguishable otherwise. To this end advertising and marketing science was born. Companies began to focus marketing efforts towards understanding the target market and distinguishing their product or service in the mind of the consumer. As long as companies could get the consumer to believe the product or service offered additional value as compared to competitors, then they could charge premium and create value.
As we have advanced into the modern world, the focus of branding has changed. Marketing science is so advanced, products and services are virtually indistinguishable in a lot of markets, and consumers are extremely savvy, so modern focus is no longer on distinguishing products and services from competitors. The internet has brought a leveling effect as transfer costs, barriers to entry, etc are at their lowest level in history. The focus of branding is now on creating a cult-like following, a passionate consumer base that follows the firm’s products and services in a tribal manner. Everything you see in advertising today is related to experience within a brand, and no longer focused solely on benefits of a product or service.
The opportunity for the small to mid-size business is to focus its energy and attention on crafting a message that recruits consumers to join with their brand and experience the power of the brand through use of the products and service. Brands do not have to be large to create a passionate following, they just have to craft the right consumer experience. The savvy business owner must consider consumer experience along with marketing and branding, aimed towards brand loyalty through our inherent sense of community. In our next branding article we will focus on ways for the small business to do just that…. Stay tuned.
Wesley Danson is the VP of Finance and Operations at BMP Partners, Inc.