Branding vs Promotions

Brad VanAuken The Blake ProjectNovember 20, 20133 min

Branding Strategy Insider helps marketing oriented leaders and professionals like you build strong brands. BSI readers know, we regularly answer questions from marketers everywhere. Today we hear from Chris, a VP of Marketing in Atlanta, Georgia who asks this on branding versus promotions…

I head up the marketing efforts for a regional sports bar & grille chain with 50+ stores. I work with many restaurant operators and have not been able to put into simple terms how the short-term strategy of promotions is a mistake versus marketing our brand for long-term growth. The casual dining industry has been struggling and patience is not something my colleagues have and so easily we fall into the “we have do something” trap and come up with another promotion. We communicate WHAT we have [i.e. the promotions: $5 Cheesesteaks; Trivia @ 7pm; Kids Eat Free on Tuesdays, Late Night Happy Hour, etc.] instead of communicating WHY a potential customer should visit us [we are fun, we love sports, we have great food, etc.].

We have not marketed our brand in the past. There’s always been an offer attached or we just advertise an offer. I’m trying really hard to break the cycle. Research we just conducted shows our brand awareness is weak. We’re trying to be all things to all people so we don’t differentiate ourselves. We’re not providing the WHY. Anything you can share that will help me explain this on a level that an owner/operator can understand would be greatly appreciated.

Thank you for your question, Chris. Brands exist to differentiate one company’s products from all other products in its category. By definition, brands are able to charge a price premium over commodities – the stronger the brand, the higher the price premium that can be charged. Brands deliver other benefits to companies as well:

  • Increased revenues and market share
  • Increased stock price, shareholder value and sale value
  • Increased word-of-mouth marketing
  • Increased customer loyalty
  • Increased ability to attract and retain talented employees
  • Increased employee job satisfaction
  • Increased clarity of vision
  • Increased profitability
  • Decreased price sensitivity
  • Increased ability to mobilize an organization’s people and focus its activities
  • Increased ability to expand into new product and service categories
  • Additional leverage with vendors and retailers (for manufacturers)

Brands are built over time through strong brand identity (logos, taglines, etc.), marketing communication and customer service. Most importantly, you must consistently deliver on the brand’s unique value proposition each time the brand interacts with the customer at each point of customer contact.

Focusing on sales promotion (offering price discounts, value-added products/services, etc.) increases sales in the short term, but usually also results in decreased profit margins and diluted brand equity. Constant sales promotion activities over time can train customers to wait for sales to buy a company’s products or services. Investing in brand building does not increase sales in the short term the way sales promotion does. But it does begin to build a brand that customers view as unique and desirable. Strong brands appeal to people emotionally and often transform their customers into brand evangelists. Some brands even have cult-like followings.

Through the psychology of saving, sales promotions entice people to purchase the brand “now.” Brand building campaigns create emotional connections with customers, causing them to want to interact with and talk about the brand more frequently and more intensely.

Chris, I hope this helps you explain the difference between promotions and branding and helps you break the cycle.

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  • Matt

    November 21, 2013 at 4:41 am

    I like this piece – I like it because it does clearly delineate between what long-term brand development is about versus the short-term promotion. The post serves as a good reminder that it’s easy to get caught up in promotions and forget the long-term. BUT – the tricky part is that there are market segments where you must do both to compete. From plastic surgery practices to small mom/pop retailers trying to compete with big box stores and soaring online sales to the big boxes themselves – promotions are what people are looking for quite a bit of the time. And I’ve seen a disturbing trend of decision makers with a “promotion only” mentality instead of opting for the better brand. I do appreciate the post because of the solid reminders that it brought to light.

  • Arpit Desai

    November 26, 2013 at 4:44 am

    Good Post. Completely agree with Matt. A lot of companies these days only tend to focus on the short term goals and concentrate on Sales promotion to achieve short term goals.
    Senior management in a lot of companies just dont seem to understand the meaning and importance of brand and are downright against supporting the marketing department in brand building which ultimately leads to poor future for the company. By the time management realises this its already too late and becomes very hard to turn around the brand.

  • susan chodakiewitz

    February 5, 2014 at 5:46 pm

    I really like this article. It clarifies the for me and difference between promotions and branding. How and and why will companies come to you?
    Not only for your product or for potential sales, but how will your brand enhance theirs? This thinking can give direction to how you develop as a company and how you develop your product lines. Thinking the big picture and how your products can also work in sync to build other brands.
    Thank you.
    susan chodakiewitz
    Founder Booksicals Books

  • Gareth Parkin

    March 13, 2015 at 5:38 am

    A very well written piece and it serves as a great reminder of the difference between a short term objective and a long term goal of building a sustainable and successful brand. Building a brand is not an overnight job and takes careful planning and a strategy which should look well in to the future and not just the here and now. I agree with Matts comments also that in many cases you have to look to do both, ie a short term promotion and brand building – both server their purpose, however you should always be looking at the shorter promotions in conjunction with the long term goal of building a strong brand.

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