Why brand is important?
A “Brand” is a commerce related identity of any seller’s product or service. Brands are normally consisting of names, and symbols. Simply explained, brand is the basic form of identity given for such products and services may be of a profit based or a non-profit based organization. There is no rule to put a brand name on each and every product of a multiple business organization, if the organization name itself acts as the brand name of products from different categories. But there’s an importance of having specific brand names for each product or a service of similar categories. If further explained, as there’s an unlimited production of typical services and commodities of same category within a specific country, area or internationally, consumers most often call the product by brand name but not its category. For example if we take soap, nobody buys anything that is simply called “soap” regardless of the brand. There’s a specific reason for this attention given to a brand, to be discussed.
In basics of financial accounting the brand is considered as an intangible asset. Intangible assets are the most valuable type of assets for an organization as the monetary value of it cannot be calculated. Such assets’ values are calculated comparing that of a similar product or service of another organization in Economics. A brand’s value is assessed by a simple principle of Economics known as “opportunity cost”. This previous explanation of the importance of brand is based on social science. The researches on consumer behavior clearly show that a greater percentage of consumers go for the branded products and services. It is shown that there’s a sense of trust built with the branded products and services than services. If further analyzed we can see that a brand of a specific item or service builds up its popularity with time. It is also bound with the company reputation, which has to be built up over time winning the consumer’s trust and loyalty. The consumers most of the time thinks the quality of a product is proportionate to the reputation of a brand. Therefore there’s a significant place given to the brand by consumers.
Market analysis shows that most of the new and small scale companies tempt to put brand names for the products sounding similar to those of reputed companies. This proves that there’s an attention for the brand name by consumers. Most importantly such popular brands have gained their popularity not only via marketing strategies. There’s a connection between the quality of a product or service with its popularity. When the quality of a certain brand is accepted by the majority of consumers as good, the brand gradually gains attention. Therefore a brand has huge potential of creating competitiveness between similar organizations.
A new organization planning to face such competition against familiar brands of consumers must pay their attention in bringing up an attractive and potentially different brand name. Though it takes time to create consumer awareness, and trust over a brand, once its identity is accepted by consumers the producers also gain their attention. This is a huge benefit for an organization to expand their market and stabilize for long term.