Page 101 - MYM 2016

We have become quite accus- tomed to brands in our lives. Companies such as Apple, Google, Coca Cola, and Toyota have four of the most
valuable brands in the world. e most successful companies spend considerable time, energy, and money managing their brands. Why do they do so? Because it is economically bene cial for them to do so. As they build their brand image in customers’ minds, they are able to have a more loyal customer base willing to pay extra for their products and/
or buy more of their products. ey recognize that to maintain and grow their customer bases most e ectively they should carefully nurture positive consumer perceptions of their products or services and correct negative misperceptions.
For many years, Google knew they had a great internet search engine, yet never tried to manage their brand. Only later did they realize that their brand was one of the most valuable assets. Users would opt to do web searches on Google over other search engines, simple because it was Google, never even exploring whether the searches on Bing or Yahoo or Baidu would yield better or faster results. ey had become brand loyal. is provides value for Google as they are able to very successfully sell their tra c to advertisers.
Similar to companies, nations have brand images of their own. Would nations’ economies similarly prosper if they adopted similar “brand” strategies?
Some people, however, may be resistant to
the idea that nations are also brands. ey might
be concerned that applying the term “brand” to a nation diminishes its dignity or reduces the nation and its people to the level of a corporate product. But the basic concept of a brand is not complicated and should not be threatening to patriotic sen- sitivities. In business, a brand is the collection of perceptions that consumers have about a company and its products or services. ose perceptions may be based on feelings as well as concrete facts, and those perceptions may or may not be objectively accurate. Regardless, those perceptions a ect prices and volume of sales. Similarly, a nation’s brand is the collection of perceptions people have about the
sPotlight oN braNDiNg
nation—perceptions about what people can expect if they visit the nation, buy goods from the nation, or invest capital there.
Branding consultancies have developed meth- ods to estimate the value of global product brands and regularly publish rankings based on those esti- mates. I teamed with U.S. News & World Report and WPP’s BAV Consulting on the “Best Countries” study to measure nation brands—and how nations’ brands a ect their economies.
Why do companies care about their brands?
e most successful companies invest in long-term product branding strategies. rough development of good products and services cou- pled with focused and coordinated advertising and public relations campaigns, these companies create awareness and positive perceptions of their prod- ucts or services. ey do so because there is good return to the company if consumers are aware of the company’s products or services and have posi- tive associations with them. is return is re ected in the company’s ability to charge a premium price for the product or service and/or to create greater volume of sales.
As the brand improves, it shi s the demand curve outward. e gure below depicts a shi in a product’s demand curve because of an increase in the brand perception. e result of e ective prod- uct branding depicted in the chart is an increase
in pricing and sales. e shaded areas indicate the increase in revenue.
fig. 1: shift in demand curve of a product due to increase in brand perception, leading to increase in price & sales
OCTOBEr 2016 MINd YOUr MarkETING | 101