In what ways does developing a strong brand increase a company’s growth potential?
A strong brand helps a company grow in three specific ways. First, companies can charge a higher price — which hopefully leads to higher profits, thereby resulting in more cash to expand the business further.
Secondly, a company with a strong name has an easier time getting into distribution channels. You can find Coca-Cola in supermarkets, vending machines, gas stations, restaurants, and many other venues. A brand name’s strength determines how quickly and successfully a company can expand its business.
Third, once the brand gains trust and respect, companies can put that same brand name on—and then launch—more new items. This is why Campbell Soup Company doesn’t need to invent a new brand name for each new soup that it launches. And because it is easier to launch new products under the same name, the company can achieve much faster market penetration.