Recently, I had a conversation with a friend whose company, a business to business distributor of industrial products, is considering creating a brand for an already existing non-branded product line. Needless to say, there are many factors that need to be evaluated when deciding whether creating a brand is a worthwhile endeavor. I would like to share a few of them here, with respect to branding a non-branded business to business product line.
First and foremost, will the move from a non-branded product line to a branded product line have generate opportunities to increase revenue? Revenue can be enhanced by increasing the product price, leveraging the brand to increase the market share, or a combination of both. Realistically, it may be difficult to increase the product price, particularly if the market segment is very price competitive. Further, existing customers, used to paying lower prices, may be sensitive to an increase.
It seems that the greatest potential to increase revenue is by leveraging the brand to expand the customer base and overall market share. Can the creation of a brand, supported by a significant investment in marketing, open doors to new customers and possibly new markets? If a price increase is necessary to cover increased marketing costs, will new customer acquisition offset any loss of customers due to a price increase? Should a dual non-branded and branded product strategy be considered, perhaps augmenting the branded product with premium services to build value?
What does the competitive landscape look like? Are there many competitors, with well-established brands? How are those brands positioned, and what key and valuable points of difference would your brand have? If your brand will be competing against a number of others that are firmly established, it may be difficult to gain a foothold. However, if your competitors are also unbranded, and do little or no marketing, then there may be an opportunity to attain a leadership position by being the first to launch a brand.
Should an opening exist to create a brand, then the potential reaction of your competitors must also be considered. How easy would it be for them to launch a brand? How assailable would your brand be? Do they have the resources to match or out-power you? Your ability to carve out a unique, own-able and profitable position in the market is key.
Resources and Commitment
Creating and building a brand takes resources and commitment. Are you willing and able to allocate sufficient resources, including talent and budget to build and execute a proper marketing strategy? Do you have full support and buy-in from senior management as well as the sales team, those who are on the frontline?
These are just a few considerations that come to mind. Do you have others you would like to add? I would love to receive your thoughts and feedback.