Generally, when a company tries to introduce a new product the main question that arises is how to brand it in a most effectively manner?
According to data, when a new product has a well-known association, customers are more willing to try it, and thus businesses require less marketing funds to introduce it. But the tactic also entails risks: The parent brand can be harmed by failed or weak brand extensions.
There are mainly three types of branding:
- New Brand: It is an entirely new/original name. For example; Coca-Cola launched a Dasani water bottle.
- Direct Extension: It means using the existing brand name with a descriptive word. Ex: Tide washing machine cleaner.
- Sub-brand: It also means using the existing brand name but, with some nonspecific/non-dictionary words.
Now, how a company can choose the best way to branding for their product?
Here are the 3 ways that a company should consider while branding a new product:
- The innovativeness of the new product: Innovation is risky so companies bringing out a completely new product should opt for a new brand to protect the patent brand from any harm.
- The size of the current portfolio: A company should opt for a direct-extension brand name when it has a lot of active brands since there is a good chance it can find a good fit for a new product.
- The number of funds available for advertising: Avoid the capital-intensive job of creating a brand with a whole new name if your company lacks the resources to sustain great advertising.
For making a product successful alone branding is not enough. Advertising also plays an equally important role here.
Advertising is mainly of two types:
- Traditional Advertising: Any form of advertising that isn’t done online is referred to as traditional advertising. This type of advertising helps reach audiences through the mode of newspapers, radio, billboards, etc.
- Digital Advertising/Marketing: Any form of advertising that is done through the mode of online is known as Digital Advertising. This type of advertising helps reach audiences through online platforms, and websites. Texts, Images, audio, and video are all common media formats for digital advertisements.
For more than a decade, digital advertising has dominated growth in advertising budgets thus in between, traditional advertising has lost part of its allure.
According to a survey, advertisers indicated that between February 2012 to February 2022, traditional advertising spending fell annually by 1.4%, while overall marketing budgets increased annually by 7.8%.
But, now advertisers are estimating the overall annual growth of traditional advertising by 7.8%.
Here are the main reasons why now companies are shifting towards traditional advertising:
- Tradition advertisements are seeing higher engagement.
- Helps in reaching a more diverse audience.
- Helps in Connecting with the local audience.
Traditional Advertising can be a perfect fit for some brands or products but for some will not.
Thus, it completely depends on the company that what kind of advertising they are looking to opt for by analyzing the cons and pros of each approach.
Reference: https://hbr.org/2022/04/why-marketers-are-returning-to-traditional-advertising