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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