Helmer defines Branding as durable attribution of higher value to an objectively identical offering arising from historical information about the seller.

Evidence 2 passages

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  1. Effective Valence The built-up associations with the brand elicit good feelings about the offering, distinct from the objective value of the good. For example, Safeway's cola may be indistinguishable from Coke's in a blind taste test, But even after revealing the result, the taste tester remains willing to pay more for Coke. 2. Uncertainty Reduction A customer attains peace of mind knowing that the branded product will be just as expected. Consider another example, Bayer Aspirin. Search for Aspirin on Amazon.com and you will see a 200-count of Bayer 325 mg Aspirin for $9.47. Side-by-side with a 500-count of Kirkland 325-milligram aspirin for $10.93. So Bayer has a price per tablet premium of 117%. Some customers still would prefer the Bayer because of diminished uncertainty. Bayer's long history of consistency makes customers more confident that they are getting exactly what they want. Note that the benefit from branding does not depend on prior ownership. as with switching costs. Barrier. A strong brand can only be created over a lengthy period of reinforcing actions, hysteresis, which itself serves as the key barrier. Again, Tiffany has cultivated its brand name for more than a century. What's more, copycats face daunting uncertainty

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  in initiating branding. A long investment runway with no assurance of an eventual path to significant effective valence. Efforts to mimic another brand run the risk of trademark infringement actions as well with their attendant costs and unclear outcomes. With this understanding, I can now place branding on the 7 powers chart, which can be found in the supplementary PDF, figure 5.4. Branding Definition The durable attribution of higher value to an objectively identical offering that arises from historical information about the seller. Branding Challenges and Characteristics Brandolution Firms require focus and diligence to guide branding over time and ensure that the reputation created remains consistent in the valences it generates. Hence, the biggest pitfall lies in diminishing the brand by releasing products which deviate from or damage the brand image. Seeking higher down-market volumes can reduce effective valence by damaging the aura of exclusivity, weakening positive associations with the product. For example, Halston rose to fame in the 1970s as a high-end design standard for women's clothing. However, when Halston accepted $1 billion from lower-end retailer JCPenney to expand into affordable fashion lines for the mass consumer, Bergdorf Goodman dropped the label in order to protect their brand. The JCPenney line was a failure, and the Halston name never recaptured its previously enviable branding.

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