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Entrepreneurs and Marketers, Article Review Example

Pages: 4

Words: 1121

Article Review

The article “Big Firms Mentor Start-Ups on Their Image” talks about the importance of branding in a crowded market and how it is poorly understood by a significant number of entrepreneurs (Glazer & Vranica, 2012). The sheer number of startups and the intensive competitive environment means entrepreneurs have to find ways to stand out from the crowd and branding is one way to do so. Branding offers an identity to the startups and makes it easier for the consumers/users to associate a particular product/service with the company. Successful companies are also successful and highly recognizable brands which explains why organizations have emerged that offer incubator programs to the entrepreneurs and startups. These incubator programs are being organized by or in association with the country’s leading advertising agencies including Diageo PLC, WPP PLC, Interpublic Group of Cos. Inc. and Publicis Groupe SA as well as industry leaders including P&G, Pepsi Co., Coca Cola, and Kraft Foods Inc.

The idea behind the incubator programs is that the startups will not be able to survive or succeed unless they have successfully created a brand personality in the users/customers’ mind. Unless startups have succeeded in creating positive brand equity, they will fail to attract or retain users/customers. The brand doesn’t only cover logo or name but encompasses the total users/customers experiences and expectations with the companies. This is why the mentors often advise entrepreneurs to ensure that all of their brand communication with the users/consumers should send a consistent message. Brand communication takes place through different brand elements such as logo, URLs, symbols, and slogans. Not surprisingly, the founders of RentShare discovered that their older logo and branding made it seem like the company was being managed by ex-bank executives who were out of touch with the next generation.

Brands also help communicate what the underlying company does. Successful brands often become synonymous with the product/service they offer (Associated Press, 2012) because consumers always think of these specific brands when think about a particular product/service. This is why incubator programs are designed to help startups successfully position themselves by offering unique value or solution to the users/consumers. In order to effectively position themselves, startups have to be aware of their strengths, the type of product/service they intend to offer, and convince the users/consumers that they offer better value than the competition.

We specifically note in the article that all of the companies involved with the incubator programs such as P&G and Pepsi Co. are those that themselves own some of the world’s leading brands and understand the power of powerful brands in a crowded market. These companies know that brands not only help capture customer loyalty but also provide advantage to future offerings by the brand owners. In addition, brands also provide pricing power to the companies even though there may be little difference between the competing products in the market. This is because leading brands have a history of quality products and services, thus, consumers are willing to pay premium price for peace of mind as well.

As Bob Gilbreath of venture capitalist group CincyTech points out, most startups don’t realize the importance of actively managing a brand (Glazer & Vranica, 2012). They leave things to chance that somehow an interesting URL, logo, and word-of-mouth marketing will lead to promotion of the company’s product/service. The incubator programs are aimed at persuading startups that brand management is just as important as any other business process and startups should actively manage their brand image. They should research to understand what their customers want and then offer product and services that address those specific needs.

One important element of strong brands is that they tell consumers how they meet consumers’ needs or solve consumers’ problems rather than emphasizing the product or service itself. They offer convincing value propositions (Investopedia). For example, Domino’s value proposition is that the consumer will have a pizza delivered to him/her within 30 minutes at a reasonable price. But startups often make the mistake of focusing more on the product or service itself and how it is superior to the competitors’ offerings rather than focusing upon the problem their product/service solves. The startups need to realize that the perceptions of consumers, even if they are inaccurate, count as much if not more than the quality of the product/service being offered. This is why even leading companies such as P&G spend considerable resources on brand management in order to positively influence consumers’ perceptions of their products. Brand management may require resources in terms of cost and time but the benefits more than pay for themselves in the long term. Once brands have been established, the companies don’t have to invest significant resources in the promotion of new products because brand name gives confidence to the prospective consumers.

Brand management is an on-going business process. The article also reminds us that brands should keep consumers engaged. This is why even established brands have been embracing internet and other emerging technologies because they don’t want to lose their established relationships with the consumers. This may be why many companies and advertisers involved with incubator programs often ask for exclusive access to proprietary technology of a startup for a particular length of time in exchange for stipend and admission into the incubator program. This shows that even brands need to evolve over time with their targeted markets (Green Dot Advertising). Pepsi is a great example and not only the company has evolved but even its logos and slogans have evolved over time as well.

The lessons from the article are that startups should invest more in their marketing efforts and brand management. They should take steps to understand market needs and their design product/service to meet those needs because the market is already crowded and startups needs to differentiate themselves in order to stand out. In addition, they should embrace latest communication technologies to interact with consumers and engage them. Consumer loyalty also gives pricing power to companies and helps them introduce new products with little marketing efforts. Similarly, companies should offer convincing value propositions that tell consumers how the product or service meets their needs or solve a problem. Startups should also realize that brand management is an ongoing process and should be actively managed rather than being left to chances.

References

Associated Press. (2012, April 9). iPad may join Aspirin, Heroin, as generic name, branding experts say. Retrieved September 5, 2012, from http://www.foxnews.com/tech/2012/04/09/apple-ipad-is-only-tablet-people-know/

Glazer, E., & Vranica, S. (2012, March 29). Big firms mentor start-ups on their image; programs connect entrepreneurs with marketers, ad agencies for help on how to sell their brand; companies benefit too. Wall Street Journal (Online), pp. n/a-n/a. Retrieved from http://ezproxy.nu.edu/login?url=http://search.proquest.com/docview/954521519?accountid=25320

Green Dot Advertising. (n.d.). Brand Marketing. Retrieved September 5, 2012, from http://www.greendotadvertising.com/branding.html

Investopedia. (n.d.). Value Proposition. Retrieved September 5, 2012, from http://www.investopedia.com/terms/v/valueproposition.asp

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