Brand. Product promotion. European brands. Sale of brands

A strong brand turns product recognition into an independent business value. Registration of rights to a name, logo and design helps develop sales, licensing and international distribution on one basis. For the business owner, the result is to place the rights to the brand with a suitable company and use this asset in contracts, investments and promotion.

Advertising can rest: why waste money — buy a brand first! 

What we are seeing today is a real revolution. A revolution in the advertising business. A crusade has been declared against advertising and spending on it, because nobody has spare money any more. And even if they do, nobody wants to throw it away. The golden days when money was not counted and businesses proudly admired their own goods have passed. If the old saying used to be “advertising is the engine of trade”, it has now been replaced by a wiser expression “branding is the engine of sales”. Do you see the point? Dealers, distributors and ordinary traders have realised that you can trade and bargain for as long as you like, but if nobody buys anything from you, your business is in trouble. You need an engine not of the process, but of the result. Everyone realised this at the same time.

 
You may ask why. For many people the words advertising and brand are almost synonyms. That is exactly the point — they are not. Advertising is spending money. Branding is accumulating value. Advertising makes a business poorer. Branding increases the capital value of a business. The more a company spends on advertising, the poorer it becomes, even to the point of bankruptcy. At the same time, the more money is invested in developing its own brand, the richer the company becomes. This happens because a brand has a price, while advertising does not. The value of a brand is included in intangible assets, while advertising expenses are not: they are treated as costs, and often unproductive costs.

Whose brand is better?

Ask people whether they like advertising. Out of 1,000 people, you will hear 999 answers: “no”.
Ask people whether they believe advertising. Out of 1,000 people, you will hear 999 answers: “no”.
Ask people whether they immediately run to buy beer or washing powder after seeing an advertisement. Out of 1,000 people, you will hear 1,000 answers: “no”.

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At the same time, the director of a brewery, sitting on a soft sofa in the evening with a few relatives, may feel extremely proud when he sees his advertisement or logo on the screen, assuming that millions of viewers watching television at the same moment experience the same elevated feeling. He imagines that the whole country is delighted with his beer, that in every home relatives call each other to watch how beautifully the beer pours from a glass in a rapid advertising block, while young people around it look on with envy or laugh at its taste.

Correct. Now ask the question differently: do they like, for example, Mercedes? Or Sony? And 99% will say YES. Why? It is very simple — people remember the brand, not the advertising.

In reality

In reality, people do not feel any special delight from ordinary advertising. They change channels, drink tea, go to the bathroom or check their children’s homework. As everyone knows, television viewers often feel only irritation from advertising, no matter which advertisement it is. Building product promotion only on irritation, when your welfare, future and ultimately your money depend on that product, is simply foolish. Some people have understood this.

So viewers are dissatisfied, business owners are disappointed and later look for someone to blame when they see sales falling. The result is logical because there was no basis for promotion. The product or service is no different from many similar alternatives. As a result of this intrusive and tiring advertising, sales do not increase, while companies still pay for people’s dissatisfaction and lack of motivation to buy these supposedly wonderful and attractive goods.

Meanwhile…

At the same time, the opposite happens with brands. Investment in branding increases company value. It is an investment. A focus on the brand attracts positive attention from buyers; they are pleased that they bought a good product. Sales grow. Everyone is satisfied. Advertising based on a brand becomes much more effective than advertising an ordinary product.

Why do you think competitors fight so fiercely over trade marks? It would seem that they could simply continue producing their beer, furniture or aircraft and improve quality and design. But no — they buy trade marks. Notice that everyone buys other people’s brands, but nobody buys other people’s advertising budgets. How can you make your own trade mark better? Sometimes you cannot; you need to buy a new one whose starting position differs from competitors. In what way, you may ask?

At least by its origin. Even a company with a 30-year history, registered in a Western European country and operating in the former USSR, is already a brand in itself, regardless of its name. Domestic private business is much younger. By buying a company in the EU, you can immediately add a much longer market history and proudly state on the packaging: Since ... in Europe, now in Ukraine.

Advertising with and without a brand — what is the difference?

You may ask how ordinary advertising differs from branding. The difference is similar to that between ordinary wired telephones and mobile phones. The first may work no worse, but require enormous spending on cables, trenches, stations and so on. This affects the cost of communications. Mobile communication needs much less physical infrastructure. Costs can be much lower, quality higher and profit larger. Therefore, those who defend ordinary “advertising technologies” can return to the twentieth century and explain why clients should waste advertising budgets there. Those who want faster efficiency, a profitable result, more buyers and increased sales are invited into the twenty-first century. This is the age of brands.

If a company or trade mark reaches “brand orbit”, it begins to attract buyers like a magnet. This becomes a basis for higher sales and further prosperity. Progressive business owners who no longer want to throw money into the advertising wind start counting their money and investing it in their own brand.

Branding has become one of the most fashionable technologies in the world for developing trade marks. Why? Because when competitors are very close behind, becoming a brand is one of the main ways to distinguish yourself. They may still be operating within the same niche while you move to a higher level. They still think in terms of TV commercials, newspaper pages and outdoor billboards, while you build brand recognition. Everyone understands that the era of strong competition has arrived. Ordinary advertising alone does not solve the problem; it simply empties the budget.

Brands in large business

Metallurgy. Our country suffered greatly from the embargo imposed by the United States on sales of our metal. This suffering might have been avoided and the situation could still have been improved. Foreign partners said that our companies behaved incorrectly on the world market by trying to dump products. Selling products below world prices is not welcomed by the international market. The answer is to play by the rules and win the market not with cheap and controversial prices but in another way.

The idea is simple. Create a company producing metal and make it a world brand. Then tell the world about this brand. Buyers will come to you not because of a low price but because you are a brand. As a result, you gain both profit and reputation.

How to become richer with a brand?

 You may ask how brands are developed, how this effect is achieved and what this new lower-cost technology of product promotion is. You may also ask what brand tools can break the usual advertising stereotypes.

A dental technician does not explain every component of a filling, not because it is a secret but because the job is to repair your tooth. You do not expect a mobile operator to explain the full path of every signal either. The same applies to brands: the mechanism exists, has been tested and its effectiveness has been confirmed. Hundreds of firms have seen the benefit of using this scheme and are satisfied that profit can grow without dependence on an expensive advertising machine.

We are pleased that we were among the first in the country to follow the trend for European brands. Everyone wants to be in the mainstream, and nobody wants to remain on the side of their own business. Trade marks that have learned the value of a brand see their wealth grow. Those who spend only on advertising watch their business bank account decline.

The country has started speaking the language of brands. It is interesting that everyone now wants to become a brand: politicians, products, services, cities and parties. This means there is something attractive in the idea if it makes company owners stop, dream and envy. All from one persistent thought: “I want to become a brand”.

Fashion

Becoming a brand is not simply fashion. It is high fashion. Those who do only ordinary advertising can now look as outdated as people wearing old raincoats or galoshes. Fashion is created to bring money to those who follow it.
The prices of brands are known. The world’s top ten are worth billions of dollars. Local Ukrainian brands may be worth hundreds of thousands. Which brand is better, Ukrainian or European? Why wait if you can start developing a European one immediately? Any Western European country is already a brand in itself, especially if you add 20–30 years of market history in the EU.

This creates a good basis for storytelling, so loved by advertising and PR specialists: a sale can be accompanied by a good story about how, 30 years ago, a certain John Smith created a business producing “what you need”, and now it is an international holding company that also applies its experience in Ukraine. What do you think?   

On the market, a brand is not only a sign of quality. It is a sign of an advantage over other goods. If dozens of bottles of vodka, varieties of cheese, boxes of washing powder, packs of tea, refrigerators, cigarette brands and coffee jars stand in a row on a shop shelf, the only way to focus the buyer’s attention is to give the product brand value. On the label, packaging, price tag or at the shop entrance — it does not matter. The buyer’s eye falls on the brand and the wallet opens for it. The objective is achieved.

Many times we have seen the results of educating consumers about brands and our slogan addressed to ordinary people: “buy only brands”. An elderly woman enters a shop and asks the assistant: “My dear, is this sour cream a brand?”

 
There is therefore no need to be surprised by the rise in sales of this sour cream. It has momentum.
In more serious language, it has energy — the energy that attracts the buyer and motivates a purchase. This should, of course, be supported by a genuinely good product. When the buyer tells neighbours, children, grandchildren and colleagues about the branded product, the energy of the brand grows rapidly. This allows the brand to reach an orbit of recognition. One further advantage follows from this: long life in the minds of its supporters, the same people who give brands something very valuable — their money.

Money

People even say that brands make money out of thin air. That is the dream of any entrepreneur. The point is to create something intangible that people will continue to buy for a long time. Air itself is not emptiness; we breathe it and life depends on its quality. In the same way, brands can influence quality and style of life.

Demand divides our life into brands and non-brands. The first have a better future, while the second may struggle. In this competition there is no small jury of experts. The jury for a brand is the public and its money. Consumers effectively vote for the trade marks they prefer, producing a form of public recognition and a ranking based on real demand.

It is a rare situation when everyone can benefit: producers because sales grow, consumers because they receive a better-known product and reduce the risk of buying something untested, traders because turnover grows, and the government because quality of life can improve at least slightly.

Want to go to Europe?

For a long time Ukraine was separated from many international business trends. Foreigners could say that Ukraine had no brands and ask how it expected to move toward Europe. Whatever the patriotic arguments, business owners are interested first of all in money and results. There is no need to limit yourself to Ukraine — you can take a ready European brand and develop it. This is possible, legal and realistic. The important point is to be among the first.

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