Why Branding is Important for a Successful F&B Business
Customers are not concerned with a business’s operating cost, they seek value. Having a strong brand will increase your chances of having a successful F&B business.
You come across a merchant selling what he claims is a high-quality leather bag. This is the first time you have had an experience with this merchant. How much would you pay for this bag? I can tell you that it’s a leather bag made with a high-grade leather. Remember this number or write it down for we will need this as a data point later.
Common Pitfalls of a Business
You may say, “Look, I am a cook, not a marketing guy, I don’t do branding.” Yes, you are in the business of delivering tasty food. But as a business owner, you are also in the business of marketing your business of delivering tasty food.
While we are sure that you know the many different ways of marketing your product and services, we would advise you to lean away from operating your marketing techniques on cost reductions and price promotions.
While these tactics are able to garner you a short-term sales growth, it will hurt your pipeline throughout your business cycle. People will start associating your business with cost reductions and only buy from you when you offer price promotions.
Build a Brand Worth Eating
Let us move our focus away from short-term financials but towards long-term assets. While it is good to focus on streamlining your business operations to decrease cost, and as a result, increasing your bottom-line profits, a brand possesses goodwill which can increase your overall business value without a ceiling.
At the end of the day, customers are not concerned with a business’s operating cost, they seek value. Would you rather grab a cup of coffee from Starbucks or The Coffee Bean? Eggs from Ya Kun or Toast Box?
Your objective is to become one of the options people suggest when deciding where to go next, what to have.
Expectations, Memories, Stories, Relationship
A brand is the set of expectations, memories, stories, and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.
– Seth Godin
On to our next question: How much would you pay for this bag? Write this down too.
Assuming you have a good understanding and enjoys the GUCCI brand, the simple changes made to the bag would have increased the amount you are willing to pay. We will analyze that later.
First, let’s explore the reason behind the discrepancy in pricing between the no-name bag and the GUCCI bag. How we can do this is by taking Seth’s quote and applying values on a scale of 1-10 to each category he mentioned. As a result, we would get somewhat of the following simple bar graph.
- No-Name Leather Bag – As a bag with no name to it, I can feel the quality of leather, but I don’t expect the world from it nor would I entirely trust the person selling me this bag. We may be expecting anything from a 4 to an 8.
- GUCCI – We’ve seen this brand, we’ve heard of this brand, some of us might even have had the luxury of owning this brand. We will be expecting the most of this bag and would take nothing less than perfection of its quality and feeling it provides to us. We expect a 10.
- No-Name Leather Bag – This being the first time we have interacted with this brand, we have no memories of this. 0.
- GUCCI – Perhaps yourself or someone you love has a GUCCI bag, shoes, pendant, or jacket. Or you have been gifted a GUCCI product. As a result, GUCCI has been a part of a happy memory created in your past, embedding itself and GUCCI brand has become a memory by association. 9.
- No-Name Leather Bag – You have not had a chance to create with stories with this bag nor has the owner presented you with any stories to bring the brand to life. An easy 0.
- GUCCI – GUCCI has a whole marketing team creating stories and weaving GUCCI into the lives of the rich and famous. With dedicated story-tellers whose purpose is to present their brand in the best light possible, both in quality and quantity GUCCI has a very good story behind it. A 9.
- No-Name Leather Bag – You enjoy unbranded goods, and you make it a point to avoid branded products. However, in doing so the relationship between you and your product stops there, at a 3.
- GUCCI – You have grown to identify GUCCI more than a brand. GUCCI has evolved into a persona–a lifestyle. Your relationship with GUCCI has developed to you taking advice from its blogs and social media outlets. You hear about GUCCI in songs and see GUCCI in photos and videos outside of the direct GUCCI channels. It has grown to be a part of your life, it has grown to a 10.
Do note that the values and data points on this graph will be different for each person and will change over time based on the experiences each individual have with their interactions with the different brand.
GUCCI’s goodwill is represented by the differences in value for each category compared to the no-name leather bag. The value you associate toward this goodwill is amount difference you would have paid for the no name leather bag as compared to the GUCCI bag.
After understanding and visualizing what goodwill is, you should be able to appreciate the importance of branding.
The Power of Branding
Can you identify these brands based on their industry with just a shape and color?
How many of the twelve brands were you able to recognize? There’s a lot more to branding than just your logo and a slogan. So many different brand touch points that contribute to your overall branding. Branding is a whole profession we can deep dive into when the time comes. In the meantime, you may want to visit our basic brand health checklist to understand where you sit on your branding.
Remember at the end of the day, a successful brand has people talking about your brand for you. Here’s a simple visual of the differences between marketing, advertising, and branding.
Need help with branding?
Thinking of starting up a store? Not sure what steps to take from here? We have a team of brand consultants, with domain expertise in storytelling, ready to give help you with any queries you may have in the world of branding.