Branding strategy is a means to increasing profitability that is ignored by many small business owners.
Although large corporations have adopted branding strategy and realize the importance of a good brand to corporation profits, many small business owners know little to nothing about branding. What they do know is usually related to visual identity and graphic design.
But branding strategy requires much more than visual identity. In fact some brand consultants consider visual identity the least important of branding components. Other more important components comprise the basic branding strategy for small businesses.
The first three of these components are covered in this article. The last three will be covered in part 2.
When an entrepreneur is considering a new business is the time to target a market and to learn every thing possible about target market members.
This part of branding strategy requires knowing demographic characteristics of target market members. Demographic characteristics can usually be determined through research, including brain-storming and researching literature on the Internet and at libraries.
Then the entrepreneur needs to determine psychographic and behavioral characteristics for the market in order to determine what products or services market members are likely to buy. Getting this part of the branding strategy correct determines business and branding profitability.
Several segmentation products and services are available online to assist business owners with this research, but some are quite expensive. However, small business owners can learn to do this research for themselves.
Selecting the wrong business name often derails a branding strategy from day one. The major problem that small business owners make in naming their businesses is naming them after themselves instead of selecting a name that represents what the business does or sells. A business name is the most important part of the business’s brand. It should appeal to the target market and leave no doubt about the business’s purpose.
Of course there are large corporations that break this rule, but these corporations spend fortunes establishing the relationship between their company name and the company’s purpose. Most small business owners can’t afford fortunes to establish their business name and brand. Thus, taking the time and resources to get this component of branding strategy right early saves money and increases brand profitability.
The pricing component of branding strategy includes four major decisions. Small business owners need to consider:
1. how well product or service meets an unmet need,
2. its quality,
3. its distinguishing characteristics and
4. what the target market is able and willing to pay for it.
Pricing decisions also need to consider how the product or service will be distributed, and the costs of marketing, advertising and promotion, in addition to the cost of producing the product or service.
Getting the target market, business name and pricing components of branding strategy right should be done before launching the business or product. They are fundamental to the success of a small business’s branding strategy.
Linda P. Morton, Ed. D, APR, studied branding and other marketing strategies throughout her three-decades professional career. She writes a blog on branding profitability targeted to small business owners at http://www.brandprofitability.blogspot.com