BUSN20016 Research in Business: Impact Of Branding On Sales

Statement of the Problem

• Branding of products in an organisation can create or destroy the image of that organisation. Branding a product aims at gaining trust and loyalty to the customers which will lead to maintaining existing customers and even create new customers hence increase market returns. However a slight mistake done on branding can lead to the destruction of the organisation especially in a competitive market environment.

• For instance there exists various companies that provide soft drinks in the market but this soft drinks provide the same satisfaction to the consumers. If a company makes a mistake in branding, the other companies will gain more market than the branding company. However, the main aim of branding is positive impacts especially in market and retaining of customers loyalty. Negative impacts of branding a product is very rare.

Aims and Objectives of the Study

• The main objective of this study is to find out the impact of branding on sales and on organisation.

• The research will look at various impacts of branding and effects on sales and organisation.

Scope of the Study

• The main scope of this research report is aimed on limiting the fields of the source of supporting details from existing world top ten companies who continuously rebrand their products and as well on the earlier research papers done by successful researchers. This limited information gathering technique will lead to clear and precise findings that will give a good report and ensuring one remain on an optimum time frame hence saving time.

Definition of Terms

• Branding:as per the business definition, branding is an activity of giving a particular name and image to goods and services so that customers will be attracted to them and wants to buy them.

• Product:Is anything that be offered for market attention, acquisition or consumption to satisfy customer want or a need.

• Brand leader:product that acquires greater market share than other products.

• Sales:this exchange of products (goods) for money.

The above terms have been defined as per business requirements and as per their use in this research paper.

Methodology

This research involved use of various written research in which I did my research and added value on those research. The participants involved are the top ten known business in USA which are multi-billion and their business profile are available online. This business companies include: Walmart with revenue of $482.1 in 2015, Exxon Mobil with revenue of $246.2 billion, Apple with revenue of $233.7 billion and others. The research methodology was done through material readings which include research papers, journals and website materials.

Findings

Advantages to the sales:

Preference

Preference is the consumers’ take on given products whereby consumer develop a greater interest to that specific product than to the others. For instance a business can develop a strong brand that such as food product which creates a greater preference for their products. When a product has more preference, the customers has a favour on that brand and will always buy that product. This preference increases customer loyalty and as well kicks off other companies products which satisfaction is similar. Some customers can influence other customers to consume that product from that company leading to increased sales.

Identification

Identity creates awareness of existence and increases customer knowledge about the product and the organisation. Branding increases market returns. Identification of the organisation is brought in by use of logos, images and graphics that is always recognized by the consumers. Whenever the organisation markets a product, they involve this marketing techniques of unique colours and logos that when any customer comes across the advert, he easily recognises the product and knows the product maker. The customer can even be the marketing agent by advising others to market on the same. This organisation identity remains in the market and always trends throughout the marketing seasons for a long time. Product brands that are easily recalled by customers have reduced marketing costs.

• Advantages to the organisation:

Extension

Whenever an organisation has a new product or a new market sector to venture and has been offering a strong branded products, the organisation will highly sell the new product and venture into the new market with minimal chances of failure. This is because the organisation products are very known and highly accepted by the consumers in the market hence creating trust to the consumers. The generated product highly sells because in most cases the new product is a complementary of existing product. The new product is associated with the existing qualities of the earlier product.

Growth

Branding helps organisation increase sales revenue which can be used to grow the customers’ number. Most customers gain preference with a product especially when they have used that product and the product has made them gain a habit of using it. They prefer that product to others and influence other customers to turn to that product. This leads to the market growth of that organisation as customers become the marketing ambassadors. The main reason as to why consumers keep on recommending a product to others is because that product is giving them satisfaction they require and they can easily recall the qualities of that product. This customers will always seek organisations products without accepting substitutes.

Barrier

Strong brand can help make the product to be the brand leader. A brand leader product will always help an organisation to maintain a market share and prevent other investors from entering into the market. New competitors can only manage to venture in if they make a major investment of launching a substitute of the product which can counter your brand strength and is a more quality brand compared to the existing one. This investment entry is not easily achieved. This will always scare new investors and help an organisation control market pricing levels. An organisation products will always be sold whenever the prices are favourable compared to the existing low priced substituted products.

Disadvantages of branding include the following:

High percentage rate of failures

Not all companies succeed on branding a product or a service. In fact, almost 40% of branded products fail to perform if not done well. New products have higher chances of failure of up to 80-90% according to Stuart (Stuart, 2008).

Lack of fit

Lack of fit between original and extension product categories (Keller 1992; Loken 1993; Romeo 1991). Although rebranding has been aimed to achieve customer loyalty and increase market revenue, less concern has been taken on negative impacts of branding a product. If the branded product does not meet the consumer wants and needs, the product will face a decrease in sales and can destroy company’s reputation.

Conclusion

Branding of products leads to positive impacts on both sales and organisation as negative impacts are minimal. For instance branding will make the product more recognizable, gain preference and increase its market sales. On the other hand branding will increase company’s image, provide barrier to the competitors who wish to venture in the market with the same product, company can easily extend its sale products as it can include substitute products and even increase company growth. Although creating a competitive environment using a brand requires much research and findings of identifying what other competitors are offering and what customers wants and preference are, companies should always establish its brand since it impacts on company’s business growth and long run operations sustainability (Park, 1992).

References

Keller, K.L. Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing, 57, 1 (1993), 1–22

Aaker, David A. and Kelvin Lane Keller (1990), “consumer Evaluations of Brand Extensions,” Journal of Marketing, 54 (February), 27-41.

Keller, Kelvin Lane and David A. Aaker (1992), “The Effects of Sequential Introduction of Brand Extensions,” Journal of Marketing Research, 29 (February), 35-50.

Loken, Barbara and Deborah Roedder -John (1993), “Diluting Brand Bekiefs: When do Brand Extensions Have a Negative Impact?” Journal of Marketing, 57 (July), 71-84.

Park, C. Whan, Michael S. McCarthy, and Sandra J. Milberg (1992), “The effects of Direct and Associative Branding on the evaluation and Reciprocity Effects of Brand Extensions,” in Leigh McAlister and Michael Rothschild (eds.) Advances in Consumer Research, Volume XX, Provo, UT: Association for Consumer Research.

Romeo, Jean B. (1991), “The Effect of Negative Information on the Evaluation of Brand extensions and the family Brand,” in Rebecca H. Holman and Michael R. Solomon (eds.) Advances in consumer research, Vol.18, Provo UT: Association for Consumer Research, 399-406.