Branding of Services and its Importance

Branding of Services and its Importance

Philip Kotlar defines a brand as “a name, a term, a symbol, or a designed or a combination of them which is intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of competitors”.

Brand decision is important for tangible goods. But in the case of service offering branding is still in its infancy, there importance is expected to rise due to the following reason.

1. Service market is getting more competitive and there is as increasing proliferation of brands in the service sector.
2. It is five times cheaper to retain customer than to attract new ones.
3. As a new service development assumes greater importance, the risk of product launch is reducing in the context of umbrella branding.
4. As service itself does not offer unique tangible benefits, brand development tangibilises the service.

Customer gives more significance to the service provider than the individual service products that the provider offers. Therefore, this leads to branding the service providers cooperate image. Banks especially have recognized the importance of corporate image and identity and have used slogans, logos and other means to brand themselves. Ones the corporate brand is developed it is found that service firms move with relative easy to other service product categories. Primarily companies resorts to corporate brand building with a goal of maximizing market capitalization and creating shareholders wealth. In case of service firms corporate branding reflects the service itself. Airlines, fast-food restaurants, banks, professional firm are usually differentiated on the basis of their corporate name and reputation rather than the specific service they offer. The service organization brand name is reinforce by courteous employees, professional looking uniform, advertising etc. However no matter how good the corporate brands may be the quality of service determines the success of the image. There are instance where the service itself is branded. Example Suvidha Account of Citibank, the various schemes of LIC like Jeevan Kishore, Jeevan Mitra etc.