The Importance of Building a Brand (Edexcel IGCSE Business)
Revision Note
Written by: Lisa Eades
Reviewed by: Steve Vorster
Reasons for Building a Successful Brand
Branding is the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product or company from its competitors
Strong branding provides four key benefits to a business
Diagram: Benefits of Branding
Strong branding adds value, allows premium prices to be applied, improves product recognition and identity and differentiates products from those of rival businesses
1. Added Value
Strong branding can add value to a product by creating a perception of quality, reliability and reputation
2. Ability to Charge Premium Prices
Customers may be willing to pay more for a product that is associated with a well-established brand as they perceive products with strong branding to be of higher quality and therefore worth the extra cost
3. Branding Establishes Recognition & Identity
This helps to builds trust and credibility and creates an emotional connection with customers which helps to generate repeat purchases
4. Business Differentiation
Branding differentiates a business from its competitors and supports marketing and advertising efforts which can use key elements to build memorable promotional materials and campaigns
Strong brands also strengthen a businesses balance sheet.
Brands are considered intangible assets on a company's balance sheet
A strong brand adds to the overall value of these intangible assets, which may be an important part of a company's net worth and make it more attractive to investors.
Brands can be built using any one or a combination of the following methods:
By developing unique selling points (USPs)
Through advertising
Through sponsorship
Through the use of social media
Examples of the way Brands have been Built
Method | Explanation | Example |
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Unique selling points (USPs) |
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Advertising |
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Sponsorship |
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Social Media |
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Examiner Tips and Tricks
You could be asked to state an element of a business brand. Make sure you choose an element that is specific to the given business as state questions are testing application skills.
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