Advantages and Disadvantages of Branding

When we go to school and colleges the professor often asks to give an introduction of yourself so that all others can know your name and background in the same way in the corporate world there is branding. Branding is the marketing term often used when one is talking about companies introducing and establishing themselves in the minds of the consumers. Let’s look at some of the advantages and disadvantages of branding –

Advantages of Branding

  1. Branding makes the customer aware about the product or service because without branding how will customer recognize the product, just imagine if there was no branding then all cold drinks would have been same but due to branding many customers prefer to use coke brand while some other prefer to use Pepsi and so on.
  2. Branding helps the company in charging a premium price for their product because a good brand commands a higher price than its competitors which in turn leads to higher profit margins for the company. An example would be Sony charging a higher price of their LED televisions than Samsung and Philips because customers have that brand image that Sony has the best quality picture when it comes to televisions.
  3. Branding also helps the company in sustaining in the market for the long term because just imagine a company which has no brand and if the owner dies or some major problem happen in the company then company will be in trouble, however if the company has brand then company will keep running because brand goes on and on for ages and it negates majority of problems happening in the company.

Disadvantages of Branding

  1. The biggest disadvantage of branding is that it involves huge cost because brands are not created overnight and companies have to spend huge sums on advertising and publicity. Advertising has to be done consistently as doing it occasionally does not result in producing the desired result of creating a brand image in the minds of the customers.
  2. Another disadvantage of branding is that if due to some reason brand gets a bad name or reputation than it is very difficult if not impossible to regain the original position or status of the brand.
  3. Another disadvantage of branding is that company’s scope become limited or in simple words company losses flexibility to some extent as consumer tend to associate a particular brand with particular product only and if the company sells some other product then it is not sure that the other product will perform equally well in the market.

As one can see from the above that branding has both advantages as well as disadvantages, however its advantages outweigh its disadvantages and that is the reason why companies go for branding and makeover if the company is in financial trouble or it wants to establish itself in the market.

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