World Business Web

What is branding?

The creative services industry has a lot to answer for! Unfortunately there is a huge amount of confusion surrounding branding!

Much of the confusion stems from two scenarios: branding consultants with a limited understanding of marketing, and; advertising and marketing consultants with a limited understanding of branding. Consequently the industry has confused audiences by coining often self-contradictory buzz-words and using them superficially or out of context. Not surprisingly the marketplace is left confused and sceptical.

We have attempted to create some clarity through concise definitions within a consistent frame of reference – a difficult task given to the sheer volume of confusion and misunderstanding that surrounds the topic.

Our definition of Branding is “the process of creating, maintaining, clarifying or changing a brand.

It’s as simple as that.

Branding encompasses much more than the visual realm. It’s the process of influencing the perception of a business or product, and any sensory experience can be used as a branding opportunity. Audible and emotional communication are very much part of the process, and can play a significant role in forming an impression of the company. In competitive environments, or to position themselves as an industry leader, smart businesses harness the impact of all interactions with consumers to differentiate themselves from their competitors and influence consumer perception.

Some interactions or “touch-points” will have a greater impact than others, and some companies decide to sacrifice certain branding opportunities to meet real or self-imposed budgetary constraints. Better to implement some level of strategic branding than none at all.

Why branding

Branding is a powerful and sustainable high-level marketing strategy used to create or influence a brand. It is used to generate a perception of, and thus a response in relation to, a product or company.

The power of perception (a brand) can positively influence buying decision/s by:

* creating an affinity or emotional connection with the consumer
* providing justification for paying a premium price for a service or product
* creating loyalty to the product or organisation
* demonstrating the quality and benefits of a service or product and the company behind it

Acquiring more loyal customers (who are happy to pay a premium price) is what many successful businesses strive for, and that’s what the marketing strategy called “branding” is all about.

How can your business benefit from this thing called branding?

Branding creates a brand – and you are branding your business or product whether you realise it or not. The question is “what perception are you allowing prospective customers to form, and is that perception costing you sales by giving them the wrong impression in relation to your competitors”?

High quality strategic branding creates competitive advantage by:

* creating a positive perception in the minds of target customers (and staff)
* positioning and differentiating you in relation to your competitors
* relating to and positively influencing customer buying decisions
* developing, managing, and building the value of your brand
* making it difficult for competitors to match your professionalism or positioning
* positioning companies as employers of choice

Branding can also deliver real internal benefits. It can play an important role in improving organisational culture and unity by:

* clarifying brand values and brand personality
* clarifying who you are and what you represent
* giving staff an identity they can understand and be proud to be a part of

And this, most importantly, fosters consistent projection of the intended brand externally.

Why do some think it’s a waste of time?

Sadly, many businesses take a reactionary approach to operating and building their business. Consequently, they never achieve the level of success that is attainable within their market. Many businesses are unaware of the benefits of strategic branding or the business lacks the time or skills to formulate well-engineered long-term plans and strategies. As branding falls into the longer-term category, it is often disregarded as too hard, too costly or even too boring!

Many business owners have no real understanding of branding and the impact it can have on the health of a business over time as well as immediately. They are often unaware of (or refuse to acknowledge) how “that airy-fairy branding stuff” impacts on themselves and others. Consequently they conclude that it’s of little or no value to their business.

But branding has been proven to be one of the most effective marketing strategies available to business, and it’s the smart businesses that make the investment in branding and put it to very good use.

So how do you create a brand?

A good place to start is by developing or clarifying your Brand Strategy or at least creating a solid Brand Foundation.

People often ask “What makes a good business plan?” Or, “How do I make my plan attractive to lenders and investors?”.

The simple answer is that lenders and investors (I’ll call them “readers” from here on out) are looking for good deals. A good deal is one that offers the reader a reasonable rate of return for the risk assumed. The complete answer is that you should write a plan that a reader will want to read and then get it to reader(s) who are looking for your type of project and levels of risk and return. This article deals with the first part of the equation – how to write a business plan that readers will want to read.

Readers want plans that clearly, accurately and completely allow them to make an initial determination about the project. Here are the steps needed to write that plan:

To borrow from the real estate industry, the three most important things about a business plan are research, research and research. While other things are important (even critical), ultimately your plan will live or die on the quality and completeness of your information. For that matter, you’re about to risk your time and financial future on a project – how much information do you want to have? Step one:

1. Become expert in your project. Learn everything possible about:

a. The customers to whom you will sell (your market).

b. The competition.

c. The actual costs of operating your business (get quotes).

d. The actual results of similar projects.

e. Your industry.

f. The project’s physical location(s) and it’s impact (if any) on the project.

g. The people who will be key to the project.
If you’ve followed the above, you’ve now got a mound of research – sticky notes, web pages, reports, quotes, etc., etc. But, what does it all mean? Step two:

2. Analyze. (Hopefully) when you first got the idea for your project there was a sense of excitement and a feeling that this is a sure winner. Now is the time to see if your feelings were well founded. With a critical eye, do a SWOT (strengths, weaknesses, opportunities, threats) analysis on your project. Determine what you are able to do to capitalize on the S and O and minimize the W and T.

Steps one and two may have changed somewhat your sure winner feelings – which is good. (If not, you either have hit upon the next sliced bread or you need to redo the preceding steps). Presuming that your research and analysis shows a worthwhile use of your time and money (and that of your readers) move to step three:

3. Forecast. This is where the rubber meets the road. Using your research and analysis you will now tell your readers that “this is what will happen to the money”. You’ll do it with accounting forecasts called pro forma statements. Provide either three or five years of statements with (generally) the first year done monthly, the second and third done quarterly and (if included) the last two years done annually. In all events, include:

a. Operating statements.

b. Cash flow forecasts.

c. Balance sheets.

Optionally include:

d. Various ratios (loan to value, debt service coverage, etc.)
In addition to the above, you should usually include a Source and Use of Funds showing where the source of the initial capital and on what it will be spent.

By this point you’re either sure you have a winner (differing from a sure winner in that you recognize the obstacles but are prepared to work through them) or you are going back to the drawing board to rethink your project. If you have a winner, step four is:

4. Write the plan. Obviously, you need to be able to use good grammar and spelling. You should be clear, concise and complete. Fill your plan with compelling facts gleaned from your research. Do not avoid the W and T from your SWOT analysis, rather, describe in detail how you will deal with them. Avoid platitudes and your own opinions – everyone knows that you like the idea, readers need facts to determine if they like it. Try to keep your answers as short as possible while still giving complete information. With the exception of the Executive Summary, keep your answers somewhat dry and factual – short, sweet and to the point.

The Executive Summary, on the other hand, is where you sell the sizzle. It is here that you make the claim that yours is a dynamic project that deserves full consideration. You need to compel your reader to read your plan and tell them why you are excited about the project.

You’ve now done the lions share of the work leaving only step five:

5. Review and revise. The review should be first by the author(s) and then by trusted advisors – the more people that you can get to review your plan the more likely you are to find any problems before they are found by a reader.

Follow the preceding steps and you will have a business plan that will get read and, hopefully, funded.