Have you ever wondered how many businesses start their journey every day and others are in the incubation process? How many companies make it a successful one?
To quote author Sabry Suby from his book 'Sell Like Crazy', "The statistics are grim: 96% of all businesses fail within 10 years, with 80% failing within the first two years."
Sounds surprising, right? All the entrepreneurs out there surely climb very high hills, planning and creating business plans as perfectly as possible before launching a business. Then how come the statistics tell such a tragic story?
It is not always a good product or service that makes you purchase or repeat a purchase, there are other factors behind them. One of them is branding. The branding of a product or service attracts you.
Eventually, it makes your purchase without you even being aware of it. The name, logo, tagline, colour, and packaging fall under product branding and are called brand elements. Branding often plays a more significant role than the product itself in your purchase decision.
While shopping on a lazy Friday after the salary has just entered your account, does it happen that you buy random things that you have not bought before? What attracts you to something you are not familiar with and does not belong to your shopping list?
The product? No, because you have not consumed it yet, you do not know how it is. Marketing? No, you are not familiar with this yet. It is because you are seeing the product for the first time.
What else? Is not it the name, the logo? Does not the name, logo, and packaging allure you? Whether you answer in the affirmative or the negative, it does. Every organisation plays the first card with its branding elements (name, logo, tagline, colour, packaging) to create a first impression created in the market.
Initially, the brand alone makes the company known to the public, formulates its reputation, and roots for long-run retention in the market. Every well-planned branding involves a lot of research to find which colour, shape, and word will attract its target customers and eventually make them buy it, make them feel good about the product even before consuming it, and make them rely on it without having any actual reason.
Many people with an entrepreneurial spirit, who might not be from a business study background, choose to opt-out of introductory courses on business understanding, which do not include any topic on the importance of the right branding of startups.
Even the ones who come from a proper business studies background fail to realise the importance of brand management and skip relevant courses or topics. As a result, when many startups make a very good entry in the market with properly mapped out branding and grasp a good market share at the beginning, some businesses with very good quality products fail to do so.
While some startups literally skip the branding part as a whole, some startups make some mistakes in branding their business.
The most common mistake is conducting zero research before setting the brand elements and going for random brand elements based on the owner's personal preference.
Many people think brand elements, like names and logos, are random things that do not need much work or time. They just sit, think for some time and end up setting names, and logos that pop up in their head without any target customer-based research or understanding.
The colour psychology says that red stands for youth, boldness and excitement. Now imagine you are setting up a brand of personal care products for older adults, and you pick a shade of bright red as the major colour of your brand elements.
At the end of the day, your target customers may end up feeling uncomfortable around your brand, and you may end up generating a poor profit and an unsuccessful startup.
Many businesses search for existing successful brands in the industry that they are willing to enter and decide to copy their brand elements. This strategy is called- 'clone branding'.
Following this might give you both fame and profit for a brief period, but in the long run you may fail horribly. Having a vital differentiating factor is inevitable. Unique branding makes a unique selling point.
Another major branding mistake is- not maintaining the culture. When you are coming up with brand elements, you are setting specific emotions and beliefs. You are defining for your customers how to feel around your brand.
Maybe your brand elements are placed in a way that expresses excitement, creativity and uniqueness, but your outlets tell a different story- they are dull, monotonous, and boring. Hence, your customers get confused and eventually leave.
As much as providing good benefits through a product or service is essential as a startup, setting the correct branding strategy is also non-negligible for you to triumph in the market.
Quazi Tafsirul Islam is a senior lecturer at the School of Business & Economics, North South University.
Shanaz Parvin Brishty is a research assistant at the School of Business & Economics, North South University.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.