Brands Are Machines for Delivering Quality Earnings at High Margins

2213 Words Nov 26th, 2012 9 Pages
"Brands are machines for delivering quality earnings at high margins" Tim Broadbent. 'Advertising Works 2000'.
Although brands do not solely refer to businesses and their products or services (e.g. charities, countries, celebrities), this essay will discuss their relevance to profits with regards to business operations unless specified. Where most companies must at some point make a decision (consciously or unconsciously) whether to brand their company or not, that question is often rhetorical. Brands are established whether the marketing manager says they should or not. The decision really is whether to implement conscious brand management within the business or not. That is the difference between a strong brands and weak brands. Where
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Branding is all about differentiation. Stephen King said; “A product is something made in a factory; a brand is something bought by a consumer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a brand is timeless.” This is the very root of why companies should brand their products. Brand equity is a massive asset to the company. It is relatively easy for a company to replicate another company’s physical assets as well as their logo and packaging etc. However it is the brand equity that cannot be replicated. This is where the competitive advantage stems from. A perfect example of this is Pepsi and coca Cola. In a blind taste test, the result indicated that the majority of Americans, in fact, favour Pepsi over Coca Cola. Coca Cola is the number 6 brand in the world and Pepsi doesn’t even reach the top 50. Coca Cola’s huge success is entirely to do with its effective branding which has lead to massive brand equity and it’s bottom line results speak for themselves.
Heuristics are mental rules of thumb or shortcuts that simplify the decision making process for the consumers, also known as “mental biases”. This means that consumers do not have to go through an analysis of every detail each time they make a new decision. Heuristics are fundamental to the concept of branding. Customers, with the use of heuristics, associate certain brands with certain things. Examples of this is