13 Sep 2020
A few weeks ago, I had a chance to visit a clothes shop. I came across a nice white shirt which had a price for 25,000 TZS, I also saw another shirt which looked exactly like the first one but had the words "Louis Vuitton," written on it. The price of the second shirt was 40,000 TZS. This left me with a question on my mind, what makes the difference in price though both shirts had the same quality?
Branding is what makes the distinction between the two shirts. When starting a business in the early stages, the selection of a brand name is essential for the success of the company. The choice of an appropriate brand name accounts for about 70% of the success of the company.
A brand takes the form of a symbol, slogan, color, or logo. A brand is a guarantee of what to expect from the product. A brand shows the difference in quality between companies that offer the same service or product. A brand can contain words, colors, or letters. Creating a victorious brand name requires consistent learning and understanding of the value the company wants to create for its customers.
When one company is bought by another company, there is a huge difference between the price paid and the book value of the company. This difference is accounted for by the brand value of a company, which is known as goodwill. Goodwill is an intangible asset that has a huge contribution to the current value and future value of the company. Creating a strong brand name is vital for the success of a company. Four properties are essential when selecting a brand name;
Short and clear name is preferred over longer, more complex names.
Brand names such as LG, Coca Cola, Pepsi, and Samsung have all one thing in common, short names with a powerful message. If a name is complex or very long then it lacks memorability to the customer and may create a gap between the customer and the company. The brand name must suggest the qualities associated with the product. For instance, the Rolls Royce logo can be seen as very attractive and has a shiny appearance that exhibits the fact that Rolls Royce has a very high-quality car.
Another aspect to consider when creating a brand name is the ability of a name to be spelled, pronounced, and remembered. You cannot select a name that is very hard to remember or pronounce, as it will make it hard for the customer to get used to your brand name. Last but not least factor is the name should be distinctive and free of any negative connotations. You have to make sure the name is free of any negative meaning in any language. For instance, you might have a short and clear name of a brand that is powerful in your country, but when your brand name is in use in another country, it seems to have an offensive meaning.
Researching your brand name is an important process before creating a brand name. In summary, the four characteristics of a brand name are distinctiveness, relevance, memorability, and flexibility. Not all successful companies have necessarily all four characteristics as mentioned but at least one of them is present. There are brands which are successful but have distinctive property but hard to pronounce.