Branding Basics for Small Business

Branding is ultimately about whether someone will pay more (or less) for a product or service from one company (brand) over another.  The most valuable brands in the world can and do charge a premium price and customers go out of their way to find and buy that particular brand.  (It's not just about the logo!)

Branding is how a product, service, company or person is perceived (stereotyped, really) by other people

• Brands are a label that people put on a company, product or a person. 
• They're usually just a few words like, "Volvo cars are reliable and boxy-looking" or "Apple iPad is new, cool and expensive." 
• They're a way people categorize and sometimes stereotype something. That makes it easy for them to make future buying decisions. 

Branding is what people think (believe) about the reputation of a company, product or person (it may not be accurate)

There's a lot written about branding, money spent by large companies to conduct research about their brand and consultants paid for how to enhance their brand image. But it all boils down to this: What's your reputation? What perceptions (and sometimes misperceptions) do people have about you? Your company? Your products? Your services? 

TIP:  This is how a brand consulting and experience consulting firm/think tank Hornall Anderson that works with clients like Starbucks describes branding and their expertise...

Most companies, products and people don't have any brand reputation with most people.  There are too many products, companies and people to keep track of and categorize so most consumers don't.  Your brand may be known by the people who you interact with frequently and others who may have heard something about you.  That won't come close to representing the majority of the population. 

The best known brands have been in business for many years and have spent millions on advertising, marketing and on their customer experience to establish their brand image and reputation.

Think of branding like high school.  If you went to a high school with 1,200 students you didn't know everyone. You knew your closest friends and could describe them to someone else (usually with two or three adjectives). Anyone else you categorized (stereotyped) based on how they looked, or what they did, or what you heard about them. They were either a geek, a jock, a cheerleader, a brain, a stoner, a goth, an artist, and so on. Most people weren't both a goth and a jock. A few individuals in high school did have a reputation and it was generally created based on something they did (good or bad). And their popularity (or lack of it) wasn't their own doing, it was the result of what other teens thought of them. Branding products, companies and people works the same way.
 

Typical ways that people categorize brands

Most Popular. 

People describe these brands as:  "I love it!  I want it!  (Or I own it!)   Apple iPads and iPhones are brands with consumers that have "brand love" for the company and products.  These are the most popular brands.  These are brands in which people have a personal affinity. Like people who own Harley-Davidson motorcycles, or only wear Nike and not Adidas.  They pay to wear the logo of the brand they love.

There are some important differences within this category of people who say they love a brand...

• "I love it...I want one...but I can't afford it"  These are aspirational brands.  Jaguar is an example of a brand that most people admire but can't afford.
• Splurge  These are brands that are accessible, but not for everyday for most people.  Coach purses may be in this category or a fancy restaurant. 
• Trendy/cool  There are two types of brands in this group. Some are fast fads. Something that's seen as cool for a while and then fades, like Ty "Beanie Babies." Then there are brands that stand for trendy and cool like Apple: They keep introducing products that people admire and find relevant.

The "safe" buy   These are the companies, products and services that are considered mainstream and "safe" to buy from.  People generally respect and like these brands but they don't generally have exuberant Brand Fans and zealous customer advocates.  Why do you go to Starbucks and Chevron stations when you're driving across country versus the local brand you don't recognize?  Starbucks and Chevron are "safe" to buy from.  Remember that saying, "No one ever got fired for choosing IBM."  IBM was a safe buy.  

Functional  The majority of brands fit in this category.  These are brands that you buy but don't like or love...they work.  They're steady.  They're reliable.  They're known. Most food and beverage products you buy every week on your grocery list fit in this category.