What Are the Challenges When It Comes to Branding?

Branding is NOT easy!

It is not just about giving a name or attractive logo or slogan.

It is one of the most challenging tasks you will ever face as a small business owner.

If you are able to manage these challenges you will be able to build your brand.

Below are the three biggest branding challenges, I have faced as a Marketing and Branding Professional over my 16 years career:

Challenge 1: Cash

The challenge of cash, or dealing with short term financial concern, is the biggest single challenge businesses face.

Executives who deliver quarterly profits are rewarded. However all of a brand’s value resides in the future and the current financial returns are actually a very small part of the total.

However if a manager is forced to choose between investing in a brand and missing a short term financial targets, most managers choose to hit the shorter term numbers. This is usually a career optimizing decision. This ultimately leads to “branding doom loop”.

The doom loop begins with a manager struggling to deliver a short term profit target. To boost sales and profit, the manager deploys a program that have a significant short-term impact, such as price promotion.

To fund price promotion manager reduces investment on brand building programs.

However, as the short term financial results improve, competition responds to nullify the impact of the price promotion, leading to less than desirable results on the medium term.

Moreover, consumers also start expecting promotion and delay their purchases and wait for the next price promotion. Thus the long terms prospects of the brands decline as:

  • Overall Brand strength declines due to the lack of brand building programs
  • Price and margins come under pressure due to competitive response
  • Consumers start expecting price promotions and delay their purchases
  • The perceived price-value equations shift downwards
  • Brands get into a dangerous downwards spiral

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