Time I got back to blogging :)
I have taken up this course called "Seminar on Brand Management" in the fourth term - a very very interesting course. We learn a lot about the core of a brand, positioning of a brand, a product etc. to ensure that it has the mindspace of the customer... I have been meaning to write on this topic ever since the term started, but never got the opportunity to put pen to paper, or, more appropriately, finger to keyboard!
So here goes..
The world around is is dominated by brands. Every item of consumption is branded in some way of another. Branding is an effort by economic agents to ensure that the customer has some way of identifying their products.
I wasnt too good at micro economics in my first term, but anyways, in my opinion, brands survive in an imperfect market. All real world markets are characterised by asymmetries, not only of information, but the ability of people to understand and interpret that information. That is why there is hardly anything like a 'perfect market'. I cannot categorically state that such markets do not exist, but logic tells me that humans are far from attaining 'perfection' :-).
To come back to the topic, brands are convenient and effective ways of exploiting asymmetries of information to make a consumer prefer one competing product/service over another. What is the objective of a brand? I would think it is to create a perception in the mind of the customer about various attributes of the product(s)/service(s) that the brand is representing. It is a symbol, a signal that hopes to either tear away the veil of asymmetry or profitably sustain that asymmetry to the advantage of the brand. Does the second option sound unethical? To my mind, the answer used to be a definite 'yes'. But then, I have come to realise that the value a person derives from consuming a product is actually a function of perception. If that person can be made to feel positive about using a particular brand, the brand should take all efforts to perpetuate that perception. The concept of value based pricing instead of cost plus pricing owes its origins to this sort of thinking in all probability.
Once an association is created in the initial stages of a brand's life, it often tends to get associated with the product being endorsed by the brand. But as time goes by, the brand feels the need to outgrow the product or the category it belongs to. Then the brand managers try to change the public perception of the brand by dissociating it from the product or category to which it was wedded to initially, giving rise to the concept of brand extensions. But the effectiveness of an extension depends substantially on how the new message sought to be communicated is related to the original message. A radical deviation in all probability will bomb in the market place. This also offers interesting insights into how perception can be altered in increments.
Moreover, the kind of communication strategies followed by a brand varies across the life cycle of the brand ( which may be different from the life cycle of a product - in fact, a successful brand outgrows the lifecycle of the product which it started off with). I could start off again on this, but this blog is getting too long already. So, maybe I will keep this for a later post.
Blogging off
Sitan
I have taken up this course called "Seminar on Brand Management" in the fourth term - a very very interesting course. We learn a lot about the core of a brand, positioning of a brand, a product etc. to ensure that it has the mindspace of the customer... I have been meaning to write on this topic ever since the term started, but never got the opportunity to put pen to paper, or, more appropriately, finger to keyboard!
So here goes..
The world around is is dominated by brands. Every item of consumption is branded in some way of another. Branding is an effort by economic agents to ensure that the customer has some way of identifying their products.
I wasnt too good at micro economics in my first term, but anyways, in my opinion, brands survive in an imperfect market. All real world markets are characterised by asymmetries, not only of information, but the ability of people to understand and interpret that information. That is why there is hardly anything like a 'perfect market'. I cannot categorically state that such markets do not exist, but logic tells me that humans are far from attaining 'perfection' :-).
To come back to the topic, brands are convenient and effective ways of exploiting asymmetries of information to make a consumer prefer one competing product/service over another. What is the objective of a brand? I would think it is to create a perception in the mind of the customer about various attributes of the product(s)/service(s) that the brand is representing. It is a symbol, a signal that hopes to either tear away the veil of asymmetry or profitably sustain that asymmetry to the advantage of the brand. Does the second option sound unethical? To my mind, the answer used to be a definite 'yes'. But then, I have come to realise that the value a person derives from consuming a product is actually a function of perception. If that person can be made to feel positive about using a particular brand, the brand should take all efforts to perpetuate that perception. The concept of value based pricing instead of cost plus pricing owes its origins to this sort of thinking in all probability.
Once an association is created in the initial stages of a brand's life, it often tends to get associated with the product being endorsed by the brand. But as time goes by, the brand feels the need to outgrow the product or the category it belongs to. Then the brand managers try to change the public perception of the brand by dissociating it from the product or category to which it was wedded to initially, giving rise to the concept of brand extensions. But the effectiveness of an extension depends substantially on how the new message sought to be communicated is related to the original message. A radical deviation in all probability will bomb in the market place. This also offers interesting insights into how perception can be altered in increments.
Moreover, the kind of communication strategies followed by a brand varies across the life cycle of the brand ( which may be different from the life cycle of a product - in fact, a successful brand outgrows the lifecycle of the product which it started off with). I could start off again on this, but this blog is getting too long already. So, maybe I will keep this for a later post.
Blogging off
Sitan
