Branding and its role in profitability of holding Companies Part 1

Abstract

Brand products and branding have important role in profitability of manufacturing institutions and holding companies. The relationship between brand and holding companies is very important because of its role and place in economic growth and development in these companies and needs further investigation and study. This paper examines the conditions and requirements of branding in holding companies.

Mutual congruity and aggregation of interests and economic activities of brands and SBU companies, along the development of brand for holding company may be a bold tactic in absorption of capital and acquiring economic interests.

It seems that the more brand holding and SBU products have compliance, the more reliability is created in customers, and consequently more capital and interest is generated for customers and holding companies.

Keywords: brand products, branding, brand holding and SBUs

 

Introduction

The main subject of merchants is achieving their objectives and multi-product sales. The majority of customers go to market when their desired product has successfully passed the performance tests. Therefore, presentation of the new product in a saturated market is difficult. This challenge is even more complicated because of the communicative traditional relations of market such as advertisement and messaging and product features to the customers in the mass publicities presented to customer.

Holding companies may provide a significant role in market by determining the activity area and target customers and improve their economic activities. Along this, choosing the proper kind of activity, market and company’s reputation are very important factors. Choosing brand product for activity of holding companies, and branding for holding companies may be a tactic to achieve this goal.

Researches show that strong brands might have many strategic advantages such as giving discount to loyal customers. These advantages are defined as brand capital. One of the valued added features to customers is hidden in companies’ brands.

Holding identity and holdings branding have had a complicated challenge for researchers. Researches about the increasing importance of holding identity and brand holdings are originated from some behaviors: 1- dialogue and communication of holdings, 2- organizational behavior. The existing challenge lies in management of holding brand, type of development, management and balancing the brand corporate. Type of relationship of the holding of some brand owners and formation of a united brand in the name of holding company is the subject of this paper.

 

Definition of brand

Brand is a name, term, symbol, design or any other feature that identifies on sellers’ good or service as distinct from those of other sellers. One of the brand features is the general evaluation of the customer from product which often expresses the behavior feedback of them. Brand makes the beliefs and features based on the product benefit. These features may be product related or not product-related and their benefits may be functional, experimental or symbolic

. Product-related are components that are expected by the customer in product performance or service. While not product-related is about the external aspects of product or service which is about purchase or consumption. Benefit is the value or price that customers believe the product or service have.

Customer finds different features towards the brand which are formed by using the product. These features intensely affect his/her future behavior such as joy of purchase and real purchase.

 

1- The factors affecting brand and branding

Two main principles in branding are: informing customers about the brand existence and reinforcement of brand image. One of the notions about reinforcement of brand image is the original brand personality. Brand personality is the features of brand formed by the customer. These features are: attributes, benefit and situation .

Consumer and consumption images are two main kinds from the four kinds of not product-related features. The other two kinds are knowledge about price and packaging or superficial information. Consumer and consumption images allow the consumer to generate reputation and features of brand personality and they are generated by direct experience or advertisement or marketing. These circumstances develop the reputation personality and the features of brand described by the consumer. Based on the research literature, the main factor for choosing brand by the consumer is to understand the brand personality of the product or service considering the competitive environment .Therefore, the brands that are well established and have the desired personality have advantage in marketplace and draw the positive attention of customers.

The other factor for choosing brand is reputation. Having reputation like a popular athlete makes the customers purchase the product or service. Confirming the reputation depends on the person and product. The endorser’s fit is important, such that a brand with a fixed personality may use it well for its interest (or not). Therefore, the endorser’s personality must have compliance and fit with brand.

The variables affecting the customer’s perception are:

  • Sponsorship
  • Fit
  • Brand personality
  • Attitude towards brand
  • Product involvement or contribution
  • Theoretical framework
  • Endorser personality
  • Attitude towards sponsor
  • Purchase behaviors

 

1-1 Sponsorship

Sponsorship is a kind of marketing that has been increasingly developed as a promotion tool in the last three decades. The sponsorship is defined as: a capital in cash or in kind in an activity for access to its potential capital, in cooperation and collaboration with that activity.

This notion as a way for marketing communication has significantly developed for the 6 following reasons:

  1. Governmental policy for privatization
  2. Adjustment of commercial costs of media
  3. Fixing the sponsorship ability
  4. New opportunities generated by the increase of leisure times
  5. Mass media to cover the sponsored events
  6. Inefficiency of traditional media

Basically companies have to be creative in their products and services market, based on the nature of government policy and customer behavior.

 

1-2 Framework of theory

The theory foundation in this research is “adaptive theory” that is used in management for describing the compliance of profession and employees’ personality for affecting organizations and the outputs related to work, activity, cooperation and their corporate. This theory is used in marketing for testing and describing the levels of compliance and adaptation between events, sponsors, features and endorsers of reputation and brands. Based on this theory, the experiences and information related to each other that are somehow similar and may be compared with little deviance are as much adapted to each other. Based on the article of Becker et al. the level of adaptation (compliance) between brand and its endorser (sponsor) is very important. When this compliance is low, its relation and value in customer’s mind is less formed and consequently will affect the sales of the company and its value and equity. Since the customer will not intend to buy the brand product or service.

 

1-3 Fit

Fit means: dependence, similarity, or adaptation of real communication, sponsor and reputation.

Fit means collaboration between two or more companies. The effective feedback of customers is more favorable when the fit is higher than the fit is weak.

Fit may be measured in some ways: 1- characteristics of product/service, 2- customer image, 3- brand personality, 4- benefit.

 

1-4 Endorser personality

Using the reputation of endorser for sales is a marketing strategy. Celebrities and famous and popular people in a society may play a role in the publicity of a product/service of an organization as the endorser personality of a brand. A successful endorser is a celebrity who has public acceptance for proposal or cooperation and collaboration with a product or service in an advertisement. The general indices of brand endorser in advertisement are gender (male/female), physical attractions, reliability and personality.

 

1-5 Brand personality  

Brand personality is a series of human characteristics common with a brand. Compared to the features related to product, brand personality tends to be symbolized or self-expressed. This aspect of human personality influences over time like cartoon or movie characters. Customers simply think about brand and they choose it if it is famous.

Considering the relationship between brand and human one may realize that brand has human-like or human personality with little difference.

 

1-5-2 History of brand personality

Although features of brand personality and human may rationally be similar, but they are different in how they are formed. The inherent feature of human personality is formed based on the unique behaviors. Physical characteristics, features and beliefs and popular characters are of the same kind. In contrast, understanding the features of brand personality may be formed and affected by any direct or indirect contact of customer with brand. The personal features of individuals are directly related in contact with brand. Thus the human features common with brand are directly transferred to brand.

In addition to personality characters, human characters such as gender (knowing the way of thinking of man and woman is very difficult), age and level of life like personality characters directly affects the brand image of consumer, staff or endorser of product. For instance, Virginia Slims cigarette may seem feminine and Marlboro may seem masculine or Apple PCs may seem ideal for youth and IBM may seem ideal for old people.

 

1-5-3 The symbolic use of brand: brand personality against human personality

Theoretically the reason for brand weakness is the asymmetric relationship of brand structure compared to human personality. Although three dimensions of the five dimensions of brand personality are connected with three human dimensions (adaptation and intimacy both consist of warmth and agreement; extroversion and excitement are both resulted from sociability, energy and activity; and curiosity and competition both are generated from responsibility, reliability and safety) but the other two dimensions: stability and complication are different from the five human personality.

Although the dimensions of human personality remained fixed in cultures, the dimensions of brand personality in these circumstances are not stable and unique because of the differences between them. Eventually, little information is available about the psychological mechanism of brand personality performance in cultures.

The symbolic use of brand in cultures significantly differs. For instance, in cultures where independence and individualism are known as values, customers show more interest for using brands to show their difference from others. Adversely, in pluralist societies where solidarity, unity and similarity are known as values, customers tend to use brand for showing similarity with others.

 

1-6 Attitudes towards sponsor

A situation may be defined as follows: the personal evaluation of an individual of a subject such as advertisement may be desirable or undesirable. The customer’s evaluation of the advertiser or the sponsor has essential importance in purchase behavior and brand features. The formation of positive feature of the sponsor is the first step in affecting the sponsorship process and it affects the purchase behavior.

Customers that have better feeling of adaptation between brands have good feeling about sponsor. Long-term cooperation between brands or between brand and sponsor along the objectives and image of organization might have much effect on success.

 

1-7 Purchase intention

According to Spears and Singh  purchase intention is the unique smart program in generating brand demand. The more is the level of motivation the more is the real intention of individual for purchase. This feeling or intention is the connection of features and behavior. Customers have the intention of purchasing the product or service before doing it and this intention exists before purchase. If the features related to advertisement occur in the first place, they affect all other features.

 

Product involvement or contribution

The notion of product involvement or contribution is precisely examined in customer’s behavior and society’s psychology and it relates to how customer uses the product in everyday life. Product involvement expresses that products and special services are more or less the core of people’s lives and point to their needs and demands and reflect their beliefs and values. For example, automobile is a product with high involvement. Many personalities choose an automobile to feel that they show the original and real image of themselves in society. Thus such a choice improves their social identity and self confidence. Products with low consumption life such as beverages have little involvement and customer has less care for them. The product involvement has an important aspect in marketing, because it can affect the people’s feedback to product and services.