What is Branding Essay Example | Topics and Well Written Essays - 250 words - 1

What is Branding - Essay Example An example of a company with a strong brand is Starbucks Cafà ©. Another company that has excelled due to its marketing strategy is McDonalds. McDonalds spends over $2 billion in advertising each year to solidify its brand value (O’brian). One of the greatest benefits of a branding strategy is that it improves customer loyalty. Customer loyalty is a great benefit because it provides companies with a steady inflow of income. Not all products are suited for the application of a branding strategy. Commodities such as gold, silver, copper, petroleum, and rice are not suitable for a branding strategy because its price fluctuates daily in stock exchanges such as NYSE, NASDAQ, and LSE. Companies that operate in industries in which there is intense competition do not benefit from branding strategies as much as firms in other industries, but branding can be use to differentiate the company. Differentiation allows firms to operate in niche markets where branding can be effective. Another advantage of using branding to differentiate is that it reduces competition. In the case of a pricing war the use of branding is not suitable because the cost associated with the implementation of a branding strategy will further deplete the operating margins of the company. O’brian, K. 4 May 2012. â€Å"How McDonalds Came Back Bigger Than Ever.† The New York Times. 8 February 2013.