Retail Branding Theory

Industry giants use retail branding to make product sales outpace the competition. They spend fortunes to create distinctive brand images that persuade consumers to choose their brand over others. But creating a brand image does not have to be a complex and high-priced venture, says marketing expert Maria Ross. Entrepreneurs on any size budget should take a closer look at retail branding theory because it can multiply their bottom lines.

To prove that smart branding drives profits, retail branding theorists point to real-life examples. Brand expert Interbrand Design Forum’s 2011 retail report lists the top-performing U.S. manufacturers who, says Interbrand, owe their hefty market shares to clever brand strategies. Similarly, brand consulting firm Bain & Company reports that it was able to transform declining profits into a sales surge for clothing retailer Apparel & Co., by revamping the retailer’s brand image. Finally, there is the example of Apple Inc., which reported a huge profits surge in quarterly earnings in 2010. According to the website BrandStrategyInsider, Apple can attribute its success to a forceful branding message: “By maniacally focusing on its brand ideal…Apple has created a market that it singularly owns.”

Retail branding requires strategy, which is the tactics a company adopts to arouse consumers’ interest in its brand. According to the marketing website Design Damage, strategy starts when a company’s marketing department defines a brand that embraces its business model. It then develops a consistent message aimed at consumers’ emotions, which persuades them to prefer one product over others for reasons they cannot always fully identify. To further strengthen that customer loyalty, a brand strategy should be flexible enough for a company to alter its brand when consumer spending recedes. An example is to extend money back guarantees during a sluggish economy. Strategy tactics also help a business decide on the most effective media -- television, print advertising or social websites -- to carry its message. The goal of brand strategy, says Ross, is a corporate climate where everyone focuses on killer earnings.

There can be no branding without differentiation, which is the ability to persuade consumers that your product differs from the rest, says "Entrepreneur" magazine. Differentiation requires a distinctive mission, values and goals. According to marketing professionals at Reach Brand Strategy, a business can achieve brand differentiation by offering consumers a “humanizing” buying experience. Thus, Starbucks promises patrons of its coffee shops a warm, upbeat atmosphere and friendly servers. Differentiation can also come to a company that fastens its brand image to values consumers embrace, such as humane treatment of animals. For example, values-based differentiation might cause a leading seafood company’s advertisements to boast that its suppliers catch fish without harming the marine environment. Differentiation is vital because it leads to brand equity.

At the heart of the retail branding theory is the belief that a successful strategy pays off through the added value consumers associate with a product. That added value comes when consumers perceive one brand is superior to others in the same category, and they are willing to pay more for it. "Entrepreneur" magazine attributes this phenomenon to consumers developing an emotional attachment to the brand because the manufacturer has associated it with people who possess things that consumers crave, such as exceptional talent or fame. A popular example is sporting shoes manufacturer Nike’s use of star athletes in its advertisements. When a highly respected athlete plugs Nike shoes, consumers want to wear those shoes because they believe that doing so lets them share in the athlete’s success.