Recently I met 3-4 such entrepreneurs who had similar question. What does it mean to create a brand and how much sales increase if you start building a brand? These are the traders who have been successfully selling their products in the market for years. Therefore, when it comes to brand building, it is natural to ask a question related to sales. But when you ask someone or any consumer if they know the name of that particular brand, the answer will certainly be “no”. If the business is going on and sales are taking place why should I think about making a brand; this is the mindset that prevents a successful brand from entering the market. Since we do business; sales become an important factor and there is nothing wrong with thinking for sales all the time. But these days, just thinking about sales can be detrimental in the long run. This ideology is often seen between two generations in family business; The older generation will say that brand, advertising is all nonsense. We’ve grown, traded, sold, so don’t fall into all of this. The new generation, on the other hand, who have been educated, having global degrees and understand the importance of the brand, can do nothing more against this ideology and the friction between the two generations is growing. This cuts off the wings of the new generation and it can do nothing in its heyday, and keep on doing business with the ideology of the old generation.
So, every now and then I get asked the question, will starting brand building increase sales? My answer is always “NO”. This does not mean that brand building does not increase sales, but it is important for a business guy with such a mindset to understand that creating a brand or brand building involves more than just increasing sales; Which in the long run will earn you more than your sales figures.
Certainly, sales will increase but if you only consider sales, the purpose of brand building or establishing a brand will not serve and so my answer is always “NO”. Creating a brand or brand building requires a brand strategy. Following which will give the brand a shape and a direction. This direction will help you for your product development, for marketing so that you will be always in the heart and mind of your consumer. There are many aspects of brand strategy but here we will try to understand some important aspects rapidly and know why it is important to create a brand and why it cannot be associated only with sales.
DON’T SELL COMMODITY, MARKET A BRAND
By not giving importance to brand building or lack of brand strategy will make the product you sell a commodity. It is difficult to bring this commodity to the brand stage, so start working towards building your brand before your product becomes a commodity.
TARGETED APPROACH WILL STOP WASTAGE OF INVESTMENTS AND EFFICIENCY
Another big problem is that the target audience is not defined when the focus is only on sales, they sell their goods realizing that the whole universe is their target. For example, the product is to create a woman’s ethnic range or traditional clothing. In general, as a trader you would say that all women are our target audience. This means that it doesn’t matter who buys us but whoever wears and buys the product is my customer or TG. When you think about brand strategy, first of all you will define your target audience and accordingly your product will be developed, marketed, positioned. This will make your energy, investment, dealer network etc. all focused and reduce the waste of all things. Consumers will look at you differently and think that this merchant has created this brand with me in mind and not for people around the world. Brand strategy will give you a focused approach.
DIFFERENTIATE YOUR BRAND FROM YOUR COMPETITOR
The brand strategy will create positioning based on your product’s USP, consumer and your competitor so that you can identify and differentiate your brand from your competitor. This will allow you to consistently deliver the message you want to your target audience and not a different message that will confuse the consumer.
CREATE EXPERIENCES FOR THE CONSUMER TO BECOME A LOVED BRAND
Brand strategy will create an experience for your consumer as much as the consumer will love your brand. Today’s consumer will remember the experience not just the name alone, and will bring the brand into their life through that experience.
CUSTOMER LOYALTY FOR BETTER PROFITABILITY
As we have seen before that all is fine if sales happen. But whenever I go out to sell a product, I have to look for a new customer. It is difficult to sell goods to a new customer while it is easy to sell goods to an existing customer who has experience with your brand. Brand building strategy will win the loyalty of your consumer. Your efforts will be less to sell goods to this consumer and hence your profitability will increase.
HELPS IN MARKET EXPANSION AND BRAND EXTENSION
Today consumer will buy the brand they trust and not the one whose name is not heard before. So, brand strategy will help build brand trust. Going forward, if the brand is established, it will help in market expansion and also the brand extension will be easier with the brand goodwill you have got.
COMMAND PREMIUM ON PRICE
When you bring newer products to market, it will be easier to sell because people know your brand. Creating a brand will allow you to place more price commands and demands which you cannot do with the mindset of just selling your product as a commodity.
CREATE EQUITY AND RAISE FUNDS
In the future if you want to bring your IPO, create equity, raise funds; if the brand is established, it will be easier to get all this as people know and will be interested in your brand.
ATTRACT TALENT TO STRENGTHEN TEAM
If the brand is established, you will have the talent you need to work for that brand. People want to work with a well-known brand and not with an unfamiliar company. So, the brand not only attracts the customer but also good talents.
Your product or service will be good, business will be running smoothly, goods will be sold, you will work hard for it, but your focus will be only sales. As mentioned above, if you work hard to build a brand, then the growth of the brand will be certain. If the product you sell is supported by strategy, the brand will create a value through smart working which will not only give you sales but also give long-term growth to the company and brand, and raise various aspects of sales as mentioned above.
So, whenever you think about why there is a need to build a brand and that might be an unnecessary expense, think about the above points again. But, remember that brand building is not a magic wand that has just appeared. Brand building is a golden rod that will explain its value to you in the future.
Some parts of this article are excerpts from the book “BRAND BANSHE, BUSINESS VADHASHE”, written by Sameer Joshi, Founding Partner – Sam & Andy.