Branding refers to that process through which a distinct identification is given to a product either by giving a name, sign, symbol, term, design or a combination of them to identify the product and differentiate from that with the competitors. Branding helps a firm to distinguish its product from the other competing products available in the market.
For example- Lux, Pears, Lyril etc. all are similar products, but their manufacturers are different. In addition to product differentiation, branding also helps in marketing of goods and services. Following points highlight the importance of branding towards marketing of goods and services.
- Branding helps in advertisement of a product and advertisement is only possible if product branding is done. Without branding, a sales manager can give information about a product but cannot increase its sale.
- Branding helps in creating brand loyalty towards a particular product. A company can use branding for price differential and charge premium prices for products that have a good brand name in the market.
- Branding helps in launch of new products also. If the brand name of a company becomes famous, the company can launch some of the products in the market quite easily. The new product under an established brand name is likely to be accepted easily and get a quick start.
