Marketing Communications

BENEFITS OF BRANDING 59

Branding makes shopping more effi cient in that it reduces the amount of decision-making

time required and the perceived risk of purchase, as a result of the fact that a brand promises

a constant level of quality. It gives consumers the ability to assess quickly the value and qual-

ity of new products by association with a well-known brand name. Furthermore, the con-

sumer derives a psychological reward, since some brands, like Rolex or Lexus, are regarded

as status symbols. Finally, branding increases the innovation potential of manufacturers, thus

leading to more variety and consumer choice.

Retailers also benefi t from strong brands because they improve the image of the store, and

as a result attract customers. Strong brands oft en result in lower selling costs and a higher

inventory turn. Furthermore, retailers benefi t from the marketing support the brand gets, by

means of advertising, sales promotion and in-store communications.

Last but not least, manufacturers benefi t greatly from high-equity brands.^74 In Table 2.5 , the

benefi ts for the manufacturer are summarised per brand equity component. High brand aware-

ness puts the brand in the evoked set of many consumers, and may even give it a prominent place

in this evoked set. Th e more a brand is in the evoked set of consumers, the more probable it

becomes that the consumer is going to buy it. Promotional support is facilitated.

Well-known brands are also capable of developing favourable attitudes and perceptions

more easily, again leading to more sales. Additionally, well-known brands can lead to more

interest and trust by retailers, resulting in easier access to the distribution channel. Well-

known brands also increase the power of the manufacturer over the retailer. As already

mentioned, a brand name serves as a shorthand signal for favourable brand associations.

Brand awareness also gives the company and the brand a sense of trustworthiness and the

image of commitment.

Table 2.5 Brand equity components and branding benefits

Brand equity components Benefits

Brand awareness z Brand in evoked set

z Influence on attitude and perceptions

z Anchor for associations

z Signal of substance/commitment

Product performance/perceived

quality

z Price premium

z Differentiation/positioning

z Reason to buy

z Channel member interest

z Brand extension potential

Imagery associations (user

type, brand personality, history,

feelings)

z Differentiation/positioning

z High price premium

z Memory retrieval potential

z Reason to buy

z Brand extension potential

High brand loyalty z Reduced marketing costs

z Trade leverage

z Attracting new customers

z Time to respond to competitive threats

M02_PELS3221_05_SE_C02.indd 59M02_PELS3221_05_SE_C02.indd 59 6/5/13 2:59 PM6/5/13 2:59 PM