Is Your Brand Helping Your Business?
Whether you're a multinational corporation or a hobbyist making a few dollars off your blog, your brand -- the name, logo, slogan, etc. that identifies you -- can make a big difference in your current profits and future possibilities.
A recent Mashable article quotes Aswath Damodaran, a professor of finance at New York University, saying:
If you as a company tell me that you have a brand name, I'm going to ask you a question: "Do you have the power to charge a higher price for the same product?" If your answer is no...I don't think your brand has any value.
High profit margins are certainly one advantage of a strong brand. Consider Apple -- their computers, MP3 players and smart phones aren't cheap, but they still gobble up market share.
While it's true that the quality of their designs and products is critical -- it's a large part of how they developed such a strong brand -- they wouldn't be able to command such high prices based only on the individual products. People are simply willing to pay more to have the latest Apple gadget.
But contrary to the quote, higher prices aren't the only advantage of a strong brand. What about Walmart? Does "the low price leader" brand have no value? Of course not. The power of Walmart's brand is that it drives incredible amounts of volume.
In fact, the same is true of Apple. Even if they could sell the iPad for $5000, their brand wouldn't have much value if they only sold 25.
A strong brand can also benefit from lower advertising costs. Strong brands get more news coverage. And if your customers proudly flaunt their purchases, wear your logo, and talk about your products, you don't have to pay nearly as much to reach new customers and remind old customers to come back for more.
How do you brand your business for maximum mind share, market share, and market price?
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