In close connection to marketing, brand ROI or return on investment is the measurement on whether the brand name of a product is generating income for the business. Not really income per se, but it sees to it that the name of the product has impact on how well the product is known and how people connect the name with something else.
Marketing strategies of today use branding as a key focus in introducing a new concept or innovation on current products that has several competitions worldwide. Simply put, a brand name should affect how customers and consumers make decisions on what to buy. Notwithstanding the price, a brand name can move the business forward if the name is associated with good things that consumers are looking for. This may have something to do with the product’s quality, the credibility of the product and the company, and the tenure of the company in the business. Many companies have established their brands for being present in the market for many years that it is seemingly impossible for them to change names. The brand is already part of the pop culture, and may even be substituted as a name for the common name of the product. This normally happens if the brand name is the first of its kind in the industry or, say, it is a machine that was first released under the brand name.
Business establishments invest in brand marketing. This investment in making people aware that their product exists is expected to yield results. The results may not be in direct profit, but strong brand names often lead to businesses having an easy time getting approved for loans to sustain and expand the business even further. Also, a strong brand name is very likely to increase the product’s value in the future. As the product gets into a phase in which it is already considered a common household word, businesses may raise the financial value or worth of the product, and yet expect that the consumers will stay loyal. The most common example is designer clothing. People will always be willing to shell out money that reaches the high heaven just to get designer clothing.
The branding of these designer clothes has something to do with how it was advertised. There is surely a heavy investment for artists and actors who endorse the product for several months. Flyers and billboards are also added expenses, add to that the television and radio commercials and marketing enterprises done in malls with the appearance of the product endorser. As a result, the brand is associated with class. And the brand ROI is more than what was actually spent in the marketing strategies implemented.
Once a brand has built credibility, brand ROI is surely to follow. In the many years to come, it will not be easy to erase the brand name from people’s minds. The simple name of the product itself will ring a bell in people’s minds that it is what their money is worth. Only then can a company say that the target set on brand ROI has been achieved.
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