Category: Branding

The secret to success: A strong brand drives sales and business value.

by Víctor Raúl Ordóñez | Feb 6, 2025 | Branding, Business, Economy

In today’s business world, it is easy to get lost in operational and financial details. However, there is one intangible element that is often overlooked, but has a huge impact on the success of a business: the brand.

Why is branding so important?

A brand is not just a logo or an attractive name. It is the total summary of how customers perceive a business. A strong brand generates trust, loyalty and, ultimately, a significant increase in sales and overall company value.

Increases trust and loyalty levels. When customers trust a brand, they are more willing to buy its products or services, even if they are slightly more expensive than those of competitors. Trust is built through consistency, quality and the promise of value.

Differentiation in a competitive market. In a sea of options, a well-defined brand allows you to stand out, communicate a unique value proposition and connect with your target audience.

Increased sales volume. A strong brand attracts new customers and retains existing ones, resulting in a steady increase in sales volume.

Higher business value. The value of a brand can represent a fundamental part of the total value of a company. While the value of a company considers tangible and intangible elements, the value of a brand focuses on its ability to generate future revenues and profits. According to Millward Brown research, brands represent, on average, more than 30% of the stock market value of companies in the S&P 500 stock index in the United States.

Examples illustrating the power of a strong brand

Google. Google’s brand value represents approximately 50% of its value as a company.

Apple and Microsoft. Brand value represents 36% and 29% of their enterprise value, respectively.

Coca-Cola and Gucci. Studies indicate that for Coca-Cola, the percentage attributable to the brand is 65%, while for Gucci it is 83%.

These examples show that brand value can far exceed the value of a company’s physical assets.

Why is it crucial for small and medium-sized enterprises (SMEs)?

For SMEs, building a strong brand is even more important.

Leveling the playing field. A well-defined brand can help SMEs compete with larger, more established companies.

Increase customer loyalty. SMEs often have the opportunity to build closer relationships with their customers. A brand that reflects these values can generate even greater loyalty.

Promoting growth. A strong brand facilitates the expansion and launch of new products or services.

Increase the value of the business. A valuable brand can be a key asset when seeking financing or considering its sale.

How is the value of a brand calculated?

The value of a brand can be calculated through different methods that analyze both financial aspects and consumer impact. These methods include:

Financial metrics. They consider market share, profitability, revenues, price levels and growth rates.

Soundness metrics. They evaluate brand recognition, customer loyalty and licensing potential.

Consumption metrics. They analyze customers’ buying behavior and their feelings about the brand, measuring relevance, emotional connection and value perception.

In addition, there are valuation methods that consider historical cost, replacement cost and relief from royalty. Incremental discounted cash flow models are also used to determine the future cash flows attributable to the brand, comparing the cash flows that would be generated by a branded company versus an unbranded company.

How to build a successful SME brand

Define the unique value proposition. What differentiates the company from the competition?

Identify the target audience. Who are you targeting? What are their needs and desires?

Create a consistent visual identity. Use a logo, colors and typography aligned with the brand strategy.

Communicate the message clearly, coherently and consistently. Ensure that all communication channels convey the same brand image.

Use a logo, colors and typography aligned with the brand strategy. Deliver on promises and exceed consumer expectations.

In a world where competition is fierce, a strong brand is an invaluable asset.

It not only drives sales, but also increases the overall value of the business.

For SMEs, investing in building a strong brand is one of the best decisions to ensure long-term success.

The power of a brand should not be underestimated.

Ah! the important thing is to create the brand concept!

by Víctor Raúl Ordóñez | Jul 16, 2024 | Branding, Business, Leadership, Marketing

The definition of a brand goes beyond visual design or advertising messages.

Es el proceso central donde se definen los valores fundamentales, la filosofía y los pasos que guiarán cómo la marca sirve a sus clientes y toma posición en el mercado.

Before embarking on creating a logo or crafting meaningless messages or advertisements, entrepreneurs should take time to reflect on what principles and promises they want their brand to represent.

Doing so not only ensures consistency in all future communications, but also establishes the conditions necessary to build strong and meaningful relationships with your target market.

When brand conceptualization is neglected, the message and the benefits the brand offers may be misinterpreted or misunderstood by the target audience.

This leads to a poor connection and poor understanding of what the brand stands for and how it can meet consumer needs.

Here are three examples of how poor execution in brand conceptualization, design and messaging can result in wasted resources, team burnout and failure to connect with the potential market.

Inconsistency in communication. If a company does not clearly define its brand concept from the beginning, it may end up sending contradictory messages through different marketing channels. For example, a company that presents itself as green on its website, but promotes non-sustainable products on social networks, confuses consumers and loses credibility.
Waste of resources. A logo design made without a clear understanding of the brand concept can lead to continuous revisions or even a complete redesign, which wastes time and money. A common case is when a company launches a logo that does not adequately reflect its core values or identity, resulting in costly subsequent changes.
Lack of connection with the market. If a brand does not clearly articulate how it benefits its customers in a unique and special way, it runs the risk of being perceived as just another generic option in the marketplace. For example, a coffee shop that does not communicate why its coffee is different from its competitors could lose potential customers who are looking for a unique experience or added value that they cannot find elsewhere.

An effective brand concept always focuses on the customer and how the brand can meet their specific needs in a way that no other brand can.

This allows consumers to quickly identify the distinctive benefits of the brand and prefer it over other available options. Establishing this solid foundation prior to any marketing activity ensures that all subsequent efforts are aligned and maximize the impact on the target market.

In short, it is crucial for small business owners to invest time and effort in conceptualizing their brand before proceeding with visual design, marketing messages and social media presence.

This approach not only avoids wasting resources and wearing out the team, but also ensures that the brand communicates effectively and meaningfully with its audience, thus establishing a solid foundation for long-term growth and success.

A brand plan defines a clear business path

by Víctor Raúl Ordóñez | Jul 4, 2024 | Branding, Business, Economy

For an entrepreneur, implementing a solid branding plan is not only desirable, it is critical to the long-term success of your business.

A properly prepared brand plan not only guides production, marketing and communication actions, but also establishes a clear and coherent link with customers, meeting their interests and needs.

Logical factors
A brand plan is a logical structure that defines a company’s values, mission and vision. This helps align all business activities towards a common goal, ensuring consistency in product and service offerings.

Psychological factors
From a psychological perspective, successful brands not only offer products, but also emotional and aspirational experiences. A well-executed brand plan establishes emotional connections with consumers, which generates loyalty and brand preference.

Management factors
At the management level, a brand plan facilitates strategic decision making. It helps to prioritize investments, optimize resources and manage reputational crises more effectively, minimizing risks and maximizing opportunities.

Brands are so important that they should not be left to marketers.

David Ogilvy

The interrelationship is crucial

Design, communication, product quality and customer service levels are fundamental elements that not only define the perception of the brand, but also directly influence its success in the market.

Design is more than visual aesthetics; it encompasses functionality, usability and user experience. A well thought-out design is not only visually appealing, but also enhances the usability of the product, which can generate a positive and memorable experience for the consumer.

This is crucial because an attractive and functional design not only helps to capture the consumer’s initial attention, but also contributes to loyalty by providing a satisfying and user-friendly experience.

Effective brand communication ensures that the message conveyed is clear, consistent and relevant to the target audience.

A good information display system can set the brand apart from the competition by highlighting its unique values, product benefits and commitment to the customer. This differentiation is critical in a saturated marketplace where consumers are looking for brands that not only meet their needs, but also resonate with their values and aspirations.

On the other hand, product quality refers not only to product performance and durability, but also to the consumer’s perception of its value and reliability. A quality product not only meets consumer expectations, but can also exceed them, generating satisfaction and positive recommendations.

Product quality reinforces brand credibility and builds trust among consumers over the long term. In addition, a high-quality product contributes to the consolidation of a strong brand in the market, which can become a significant competitive advantage.

Failure examples

New Coke: Despite a change in product design and renewed communication, New Coke did not meet customer expectations in terms of taste and quality, which caused its rapid failure in the market.
Pepsi Crystal: Pepsi Crystal created a new product and a communication that promoted novelty, but the lack of clear quality and differentiation failed to attract the market’s attention.
Segway: Although it had a revolutionary design and communication that emphasized convenience and sustainability, Segway failed to convince consumers of the quality and utility of its product, resulting in disappointing sales.

Closing

The connection between design, communication and product excellence not only defines brand perception in the marketplace, but also plays a critical role in its long-term success. By integrating these elements in a coherent and strategic manner, organizations can establish a strong brand and significantly differentiate themselves from the competition, generating an emotional connection and ongoing loyalty with their customers.

Inconsistency destroys business

by Víctor Raúl Ordóñez | May 7, 2024 | Branding, Business, Leadership

In an organization it is essential to be consistent between what is said and what is done.

It involves aligning the values that represent the company and the day-to-day actions.

When there is no congruence, trust wears thin and people leave.

Inconsistency can destroy an institution’s or company’s reputation, and rebuilding it could be an almost impossible task.

Are they lying?

A well-known example is Enron, this American energy company was full of corrupt practices and financial irregularities.

While he preached ethics and integrity, his managers were involved in fraudulent activities that led him to lose his position.

The lack of clarity in its public discourse and its internal actions damaged the company, affecting employees, shareholders and the market in general.

Volkswagen, once known for its quality and reliability, was caught manipulating data on pollutant gas emissions in its vehicles.

Although it had an image of sustainability, its internal actions were contradictory. This inconsistency caused a crisis of confidence and led to costly sanctions.

Uber, during its brief growth, the company presented an image of innovation and revolution in the field of transportation, presenting itself as a modern and innovative option to traditional cab services.

However, behind this facade, the organization faced serious obstacles related to internal culture and ethical strategies.

In 2017, a series of revelations rocked Uber, revealing a toxic work environment and issues of harassment and discrimination.

The difference between stated values and actual shares had disastrous consequences.

Five tips

1. Define and communicate the philosophy and values clearly.

It is important that the company’s values are clearly defined and understandable to everyone, from employees to customers. Communicate them consistently and make sure they are an integral part of the company’s culture.

2. Implement consistent policies and practices

The stated values should be reflected in the company’s policies and practices. If the company values sustainability, for example, it adopts sustainable practices throughout the organization. Consistency is essential to avoid inconsistency.

3. Train people in ethics and transparency

A consistent company requires employees who understand the importance of ethics and transparency. It guides employees to make decisions aligned with the company’s values and philosophy.

4. Establish control and follow-up mechanisms

It is essential to have control mechanisms in place to detect and correct possible inconsistencies. Establish auditing and monitoring systems to ensure that the company is aligned with its philosophy.

5. Encourage open communication and feedback.

When there is no open communication, the results are often poor. It is essential to foster an environment where employees feel comfortable sharing their concerns and offering feedback or timely solutions to situations in the company. This helps identify problems before they escalate into a crisis.

Inconsistency can have devastating effects on a company. From loss of customer confidence to total collapse, the consequences can be catastrophic.

However, with clear values, consistent policies and a culture of open communication, companies can avoid these pitfalls and maintain the trust of their customers and employees.

The key is to align what you say with what you do.

You may also be interested in the following article in Design Rush

Quality is essential for a brand

by Víctor Raúl Ordóñez | Mar 21, 2024 | Branding, Business, Economy, Marketing

Quality is the primary factor that adds the most value to a brand.

This quality forms the basis of the customer experience, surpassing even communication and advertising in terms of relevance.

While communication plays a crucial role in spreading the brand message, its true value lies in the tangible benefits it delivers to consumers.

Steve Jobs, in an interview, highlighted the superficiality of advertising awards.

For him, the success of a brand is not determined by the number of awards it receives in advertising contests, but by its ability to exceed consumer expectations. This statement underlines the importance of focusing on the quality of the product or service, rather than relying exclusively on communication strategies. There are numerous examples of companies that have won awards for their advertising campaigns, but ultimately failed to achieve the expected commercial success. These situations highlight the disparity between advertising industry recognition and consumer perception. The examples below clearly illustrate the disparity between advertising industry recognition and consumer perception, and show how even award-winning advertising campaigns may not translate into commercial success for brands.

First, the South Korean brand Samsung has been recognized for its innovative advertising campaigns that have won numerous industry awards. However, there have been times when these campaigns have failed to significantly drive sales. Despite its outstanding advertising performance, Samsung has faced challenges in consumer perception and product differentiation in a highly competitive market.
Another prominent example is that of a food company such as PepsiCo. In the past, PepsiCo has launched highly praised advertising campaigns that have won numerous industry awards. Despite the quality of these campaigns, in some cases, they failed to drive sales significantly.

Finally, one can mention the case of a fashion brand such as Calvin Klein. Calvin Klein is known for its disruptive and provocative approach to advertising, which has earned it numerous industry awards and accolades. However, even with highly creative and visually stunning campaigns, the brand has experienced times when sales have fallen short of expectations despite the advertising recognition.

These examples demonstrate how successful advertising and industry recognition do not always translate into a fundamental increase in sales or positive consumer perception of the brand. Ultimately, product quality and the brand’s ability to meet consumer expectations are fundamental factors that determine a brand’s true value and success in the marketplace. What a good marketing and communication system can achieve with a great product and service:

Extend the reach to more audiences.
Reinforce positive ideas and opinions.
Create barriers to competition.

It is difficult to put a value on how much sales growth marketing and advertising can generate, although two studies report an increase of 14 to 17%.

Kantar Millward Brown study: The “BrandZ Top 100 Most Valuable Global Brands” study found that brands with strong marketing and advertising grew by 17% in value in 2022.
Forrester study: A Forrester study found that companies that invest in digital marketing experience a 14% increase in brand equity.

Tips to increase the value of a brand with marketing and advertising:

Develop a clear marketing strategy aligned with brand objectives.
Invest in high quality content that is relevant to the target audience.
Use a variety of marketing channels to reach target audiences.
Measure the impact of marketing on brand equity and make adjustments to strategy as needed.

Additional resources:

The short term is the enemy of companies

by Víctor Raúl Ordóñez | Mar 12, 2024 | Branding, Business, Economy, Leadership

In the competitive business world, the short-term perspective can become the biggest obstacle to a company’s sustainable growth and long-term survival.

Often, the obsession with immediate results can drain not only the market, but also the team and suppliers, creating an unsustainable environment. In this article, we will explore how a focus on the short term can be detrimental and offer solutions to counter this challenge.

Companies that focus exclusively on short-term goals run the risk of exhausting their market by exploiting available resources in an unsustainable manner.

This practice can lead to a rapid decline in customer interest, as short-term strategies often sacrifice quality and customer satisfaction for immediate results.

It is essential to take a broader perspective, considering how short-term actions will impact the company in the long term.

In addition, the work team and suppliers can also suffer the consequences of an excessive focus on the short term.

Constant pressure for quick results can lead to decreased employee morale, burnout and high turnover.

Likewise, relationships with suppliers can become strained if they are constantly pressured to meet short-term demands, which can negatively affect the quality and reliability of products or services.

To overcome these challenges, it is essential to adopt a more strategic and sustainable mindset.

Instead of seeking immediate profits, companies should focus on long-term development, building strong relationships with customers, employees and suppliers.

Implementing branding and marketing strategies that focus on building a long-term image can be key to ensuring customer loyalty.

Examples of major business failures due to a focus on short-term profit include:

Lehman Brothers (2008): The pursuit of immediate profits and excessive risk-taking led to the collapse of Lehman Brothers, one of the world’s largest financial institutions, triggering the global financial crisis.
Enron (2001): Enron focused on reporting inflated financial results to increase its value in the short-term stock market. This unethical practice resulted in one of the largest financial scandals and the company’s bankruptcy.
Nokia (early 21st century): Although a leader in the cell phone industry, Nokia was unable to adapt quickly to technological changes and lost its dominance due to a lack of long-term investment in research and development.

In conclusion

the short term can be the enemy of companies if approached in an inordinate manner.

It is crucial to adopt a broader perspective, focused on sustainable development and building long-term relationships.

By learning from past mistakes, companies can avoid the pitfalls of instant gratification and build a path to long-term success.

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