According to AllAboutBranding.com, brand extension is
“the application of a brand beyond its initial range of products, or outside of its category. This becomes possible when the brand image and attributes have contributed to a perception with the consumer/user where the brand and not the product is the decision driver”.
Your logo is a visual representation of everything your company stands for. But many companies still skimp on developing this key identity piece.
Ideally, your company logo enhances potential customers and partners’ crucial first impression of your business. A good logo can build loyalty between your business and your customers, establish a brand identity, and provide the professional look of an established enterprise. With a little thought and creativity, your logo can quickly and graphically express many positive attributes of your business, too.
There are basically three kinds of logos. Font-based logos consist primarily of a type treatment. The logos of IBM, Microsoft and Sony, for instance, use type treatments with a twist that makes them distinctive. Then there are logos that literally illustrate what a company does, such as when a house-painting company uses an illustration of a brush in its logo. And finally, there are abstract graphic symbols? such as Nike’s swoosh?that become linked to a company’s brand.
Before you begin sketching, first articulate the message you want your logo to convey. Try writing a one-sentence image and mission statement to help focus your efforts. Stay true to this statement while creating your logo. Here are some tactics and considerations that will help you create an appropriate company logo:
Look at the logos of other businesses in your industry.
Focus on your message. Decide what you want to communicate about your company. Does it have a distinct personality?serious or lighthearted?
Make it clean and functional. A good logo should be scalable, easy to reproduce, memorable and distinctive. Icons are better than photographs. And make sure that logo can be reproduced in black and white.
Your business name will affect your logo design.
Use your logo to illustrate your business’s key benefit.
Don’t use clip art. However tempting it may be, clip art can be copied too easily. Not only will original art make a more impressive statement about your company, but it’ll set your business apart from others.
Since the logo is integral part of a brand (but, of course keeping in mind what Dustin said logo does not create the brand it merely encapsulates it, symbolizes it) LogoLounge.com published the Third Annual Visual Trends Report.
The word “trend” seems to raise the little hairs on the back of some designers’ necks. Everybody wants to be a you-know-what-setter; no one wants to acknowledge the aftermath.
Trends are not an accusation of some widespread lack of original thinking. Instead, they are a sign of design evolution in our ever-shrinking world.
Think of them as confirmation that designers are excellent thermometers/barometers of human thinking the world-round. That there are corollaries should be no surprise. So we note trends with these caveats:
1. Are these trends on the way in or the way out? We do not presume to suggest one or the other.
2. Do trends tell you where to go or, conversely, where not to go? Again, that is for you to decide
Consider those 15 logo trends (folly stars, amalgams, blow out, cmyk, flames, wicker balls, weaves, whips, puffies, line dots, good drops, leaf life, blur, swirlys, hot dogs) and discover new directions. But remember: With any trend, it is better to realize how you arrived than to know you have arrived.
The Next Generation of Growth Brands is based on compound annual growth rate in brand value between 2001 and 2005. The report describes the growth brands as having “outperformed their peers in their respective markets during the past four years and are likely to continue to do so into the future”.
Apple, creator of the iPod, is the fastest growing brand in the world, with internet brands Google, Amazon, Yahoo! and eBay following close behind, pushing notoriously powerful brands like Coca-Cola off the list.
According to marketing consultants Vivaldi Partners and Forbes, Apple has managed to increase its brand value by 38% in the last four years — largely thanks to the ubiquity of its portable music device iPod.
Power brands like Coca-Cola and McDonald’s, which typically spend the most on advertising, did not even make it into the top 20.
Here is the top 10:
Brand – Value Increase
1. Apple – 38%
2. Blackberry – 36%
3. Google – 36%
4. Amazon – 35%
5. Yahoo! – 33%
6. eBay – 31%
7. Red Bull – 31%
8. Starbucks – 24%
9. Pixar – 23%
10. Coach – 22%
Anyone can do marketing with a blank check. Lean times, or even the threat of lean times, force us to be more careful in our decision making. Which brands should we push? Where should we promote our brand? How can we avoid duplication? Who is our target audience?
Cost-cutting measures include co-branded advertising, consolidating outside vendors, and cutting down on printing costs by creating more electronic promotional materials. More than that, here are 4 key areas, proposed by Lippincott & Margulies, to review in order to increase brand and branding efficiency in slowing economy:
During prosperous times, when companies are constantly unveiling new products and services, marketing materials can often grow out of control. An objective communications audit is the first step to ensuring that all marketing efforts are consistent and not wasteful.
A review of all marketing support materials can help companies to identify what materials are being produced, who’s producing them, the cost for each, and then the total marketing communications cost. This is often a surprisingly large pot of cash. It also results in identifying the audience for each communications vehicle. Completing this kind of company audit can help companies identify where their efforts are repetitive, and possibly even unnecessary.
Through a brand portfolio analysis, companies can take a serious look at their products and services to determine their target audience. After evaluating each brand by grouping it in a designated category and assigning it to a key audience, a company can then step back and decide if support for some of those brands can be consolidated, cut back or eliminated.
Heavy advertising spending is not a prerequisite for building a strong brand. Understanding who your targets are, and then prioritizing those audiences, can help in ascertaining where advertising is a necessity and where it’s a luxury. By narrowing the focus and sharpening the message content, companies can use creative, less expensive alternatives to communicate to who’s critical and not to who isn’t.
Develop decision-making tools based on a set of criteria to manage naming, co-branding and marketing expenditure. Developing a permanent set of criteria will also ensure that future branding issues are decided upon consistently and efficiently.
Since seven seems to be the magic number which relates with brand value and brand valuation let’s check seven applications of brand valuation:
External investor relations
Mergers and acquisitions were the original driving force for brand valuation. Now many successful companies use brand valuation as an ongoing business performance indicator: to help ensure that brand strength is reflected in share value.
Internal marketing management
Brand valuation is increasingly being used as a management tool in leading organizations. For example: brand valuation figures can be used to evaluate new product and market development opportunities, to set business objectives or allocate budgets.
Internal royalty rates
Across a large organization there may be many affiliates, subsidiaries or divisions that make use of any particular brand. As the profit potential of brands becomes more clearly understood more companies are charging royalties, across their business operations, for the use of these brand assets.
Licensing and franchising
Where companies allow outside organizations to use their brand, on a licensing or franchising basis, a brand valuation can lay the foundation for appropriate charges.
Tax planning
As the management of brands as financial assets becomes more sophisticated, so tax authorities around the world have started to take an interest in how these assets are managed. The result is that more and more international organizations are planning the most cost-effective domicile for their brand portfolios and are organizing their tax affairs with their brands in mind.
Securitized borrowing
Even in the conservative world of banking, the asset value of brands has been recognized. As a result brands have been used to secure loans, especially in the US, where companies such as Disney have borrowed significant amounts of money against their brand name.
Litigation support
Brand valuations have been used to support litigation against the illegal use of a brand name (as a basis for calculating damages, for example) and also in cases of receivership, to prevent the assets of the business being undervalued.
Brand is often limited in its definition to awareness of a product or service. A company markets its brand – creates the name, broadcasts it to target customer segments, and applies it to its corporate identity or a set of products and services. The brand makes the company, product, or service recognizable.
This limited view of brand is destined to fail in today’s business environment. Marketing, which orchestrates only a small part of the brand-customer relationship, puts the face on the brand, making a set of promises.
Creating a coherent brand experience requires aligning every touchpoint of your organization with your brand. The more perfect that alignment, the more perfect the customer brand experience. You can’t escape your brand. Either you make the customer experience, or it gets made without you. Brands are essentially the collective perceptions of an organization’s key constituents (customers, suppliers, investors, employees, etc.) and are defined more by deeds than by words. Brand is how your customer experiences what you do.
Visionary companies recognize that responsibility for brand management belongs with the organization as a whole.
It’s your choice: deliver an effective brand experience or don’t. If you’re active in shaping the customer experience you can develop a rich and long-lasting relationship, firmly based in your brand. Where you fail to create a strong relationship with customers, a competitor will. Here are five places to start:
1. Clearly articulate your brand identity. If you can’t clearly articulate your brand identity, you’ll be unable to control how customers interpret it. A clear brand identity sets expectations across your organization for your products and services.
2. Establish a customer value proposition and use it to guide each department. The various departments responsible for delivering against your customer value proposition need to understand what the customer value proposition means to them.
3. Define the optimal customer experience. Identify the contact points where customers interact with your company.To create a holistic brand experience, you need to create a consistent and compelling experience at each of these touchpoints.Take an outside-in perspective when aligning each department with your customer value proposition and brand identity.
4. Cultivate relationships with customers. Treat these relationships carefully. Listen attentively to what you’re being told, learn from it, and respond.
5. Strengthen your brand over time. Based on what you learn from your customers, recalibrate your brand. Always be aware of how your brand can strengthen your brand-customer relationship.
One of the questions that many companies grapple with is which level of branding they should use. The main choices are:
Corporate branding
Corporate branding is where the corporate name is the brand, and here the products tend to be described more in alpha numeric or letter terms, and not have distinctive brand names. Such is the case with BMW. Corporate branding gives each product the strength of the corporate brand values and positioning, and saves a great deal on advertising and promotional spend. It builds up the strength of the corporate brand and its financial value. Corporate branding is very appropriate to those companies engaged in service industries, as their products are more intangible in nature. When consumers cannot see the product, the company brand name helps give them an assurance of quality, heritage, and authenticity.
Product branding
Product branding is where each individual product has its own brand name and resources. With this strategy, the company name is either totally or virtually absent. It gives each brand the opportunity to have unique values, personality, identity and positioning. As a consequence, this approach implies that every new product the company brings on to the market is a new brand, and can be positioned precisely for a specific market segment. Product branding makes it easier for the company to evaluate brand performance and worth, and makes for better resource allocation decisions. Moreover, if the product is a flop, or is involved in a marketing disaster, the bad news does not attach itself to the company name. Product branding is costly though, as advertising and promotion costs cannot be shared, and its success depends on the product itself having a sustainable competitive advantage and clear positioning in the marketplace.
House branding
House or endorsement branding uses both ideas, and the corporate name is placed alongside the product brand name. This allows the product brand to assume its own identity and positioning, but draw strength from the values of the corporate brand, and give consumers the assurance, in many cases related to quality, of the corporate brand. There are a variety of ways in which this can be achieved, with the corporate brand in lesser or greater prominence. House branding helps with the introduction of new products, where it can be very difficult to break into mature markets without the endorsement of a strong and credible corporate parental brand name. One possible disadvantage is where the product is not favourably received and causes damage to the parental brand name.
Should a small company use branding as a part of its competitive strategy? There are some factors that imply that brands with a small geographic market have a good chance to steal market shares from the gigantic, global brands.
The most important thing from a small brands perspective is to be strong in its own defined market. A smaller brand has an opportunity to serve its customers in a more flexible and in a more creative way than its greater counterparts. Most of all that goes for small brands that live and breath closer to its customers than big, global brands. Many of these small brands have a chance to get stronger if they stop having inferiority complex against the bigger brands and start to make their brands more clear and focused, and build their brand in a new and exiting way.
Small companies with local and regional markets seem to have accepted the global brand´s dominance over their customers and live by the convention that branding costs too much money and they are left to compete with product offerings and price. Even though they have realized their opportunity to offer personal service, it is seldom you come across companies that manage to do so in a unique or exiting way. Therefore they do not manage to overcross the hindrance which the credibility of the big brands put up.
You do not build a strong brand only through advertising and media, it is the collected, over all experience that makes a strong brand. This experience is infl uenced by all encounters you have with a brand, how the salesperson act, how other personnel interact with you, service, packaging, public relations, etc. The bottom line is to which degree you manage to satisfy those needs that you have promised to satisfy.
Small companies have flat organisations, the decision making process should be a lot easier and they are physically close to the market they wish to attract. Yes, small companies may have less money to spend on large media, but due to their small sizes a possibility to create a near, unique and possibly also an exciting experience for their customers. In a small organisation it should be much easier to manage and perform a consistent branding strategy. The possibility lays not in thinking big, but to think further.
We discussed earlier that co-branding is not a new concept, and that it remains crucial to consider the strategic objectives of the project and to address all the possible risks before it is launched.
Co-branding can be an asset in nearly all aspects of marketing, from creating initial awareness to building loyalty. There are four main approaches to co-branding that companies should consider.
Promotional/sponsorship co-branding.
Co-branding began with endorsements. This approach can be a good beginning point for organizations; the relationship is simple, but it can result in significant brand enhancement and sometimes even an unplanned opportunity.
Ingredient co-branding.
Partners in ingredient co-branding are usually the company’s current suppliers or largest buyers. Easy access to offerings and a well-established relationship translates into a lower level of investment required than in other forms of co-branding. An ingredient brand’s success relies on being distinct, either through patent protection or by being a dominant brand.
Value chain co-branding.
Other players in the value chain can create new experiences for the consumer, which, in turn, can create a level of customer value and differentiation not possible with promotional or ingredient co-branding. There are three types of value-chain co-branding:
Innovation-based co-branding.
In this approach, partners create entirely new offerings to provide substantial increases in customer and corporate value. It offers the potential to grow existing markets and create entirely new ones. Because both partners are seeking a high level of value creation, the rewards and risks are often an order of magnitude larger than those created by other co-branding approaches.