When we examine the original meaning behind the term “brand,” it often refers to a company’s collective efforts in distinguishing a new product from its competitors, via methods such as naming, symbolism and design.

But its use nowadays is not limited solely to the business world. Rather, it’s become a catchphrase, used in all walks of society. A local university in Seoul, for example, has adopted a motto which roughly translates to, “A factory where I can develop my brand.” The term is used during job interviews, as a common question posed during the recruiting process for new hires is, “what is your unique brand.”

Even politicians are putting forth efforts to develop their own “brands,” and the coveted list of accomplishments, or “spec,” compiled by Korean college students is, in reality, a type of self-promoting marketing strategy. In short, these are all examples of “branding.”

The term, however, still applies to the business world as well. Brand managers work aggressively to market their brands, by investing capital and time so that their products reach consumers first.

So what does “branding” really signify? Is it right to say that a successful branding strategy is one that places a product ahead of its competitors through more provocative, showy means? Or does a successful branding strategy entail generating more customers through attractive pricing? Can one even go so far as to say that effective advertising is, in actuality, attracting the most customers via any means possible? 

These questions aren’t restricted to product management or advertising. One outlives the competition by having a certain je ne sais quois, or that elusive, attractive quality, that sets it apart from the rest. I believe this is a phenomenon that can be found in all aspects of society, and can even be applied on an individual level. But can we really say that appealing to another person by being more approachable than the rest is the right type of branding strategy?

Unfortunately, brand management, whether it refers to a product launched by a company or to human relationships, is not something that can be easily achieved. Due to this reason, successful companies have, behind them, brand managers that have managed to walk the fine line between these aforementioned traits that determine a brand’s success or failure. These brand managers struggle desperately not to cross this line.

Let me provide an example of



what I mean by this.

Let’s say, for instance, that a business is looking to target a different segment of the market by launching a brand that falls short both in quality and price, compared to the company’s original brands. This mass market brand will surely benefit from borrowing the name of the original label. But conversely, the original label’s reputation may suffer when it’s affiliated with this new mass market brand. So one has to be careful. Successful brand managers have to take this into account when plotting their advertising strategies.

And now for a “real world” example, we have world-class hotel chain Marriott International. Its two low-end brands, “Courtyard by Marriott” and “AC Hotels by Marriott,” benefit from their affiliation with the original “Marriott” brand. This marketing tactic elevates the reputation of these newer brands, and at the same time, manages to avoid harming the status of the original brand image. In short, this is a good illustration of walking that fine line that I referred to earlier.

And on the flip side, we have the opposite case. Let’s say that a company is launching a higher-end brand compared to those already in its portfolio. To ensure the success of this new high-end brand, the company must hide its original brand image. This tactic is already being used by the Korean cosmetics industry. Among these cases is higher-end cosmetics lines of Amore Pacific’s “Primera” and LG Household & Health Care’s “Belif.”

Many people mistakenly believe that this type of delicate brand management has no bearing on the individual self, and believe it only applies to product launches of large corporations. Businesses of all sizes, large, medium, and small, have been participating in the so-called “social commerce boom” since last year. While this type of strategy helps little known brands achieve wider public awareness in a short period of time, we really need to question whether it’s actually effective. By effective, of course, I am basically referring to a heightened brand reputation.

All products share something called a “retail price.” This term refers to what the consumer is willing to pay after looking at a product. From a company’s perspective, the ability to change the consumer’s mind with regards to this retail price is what determines successful pricing.

But many brand managers or company executives ignore this trait, labeling their products at half-price. Or sometimes they knock down the price by as much as 70 percent. While this initially appeals to younger Internet users, and may result in a fixed audience or a loyal customer base, using this strategy basically results in the downward trajectory of the retail price. And once this falls, it’s difficult to make it rise again.

What ends up happening is that this altered, lowered price becomes fixed in the mind of the consumer as the original retail price. So from the consumer’s perspective, the original retail price becomes unfair and unjustified. He will never pay the original retail price again.

Once restaurants or products get a taste of social commerce, it becomes a hard habit to break. Of course, social commerce does have a plus side in that it increases profits in a short period of time. But we must realize that this profit comes at a great cost, because without these discounts, the customers would not be there.

So private labels end up in a dilemma. Private labels often have high profit margins due to high commission charges, and the market is structured to accommodate them. But then private labels become mired in a cycle where they can only sell their products through private labeling.

From the perspective of successful brand management, retail pricing is important. Lowering the customer’s wished-for cost becomes an operational problem due to the problems outlined above, so I cannot recommend this as an upright marketing strategy.

Companies that worked tirelessly toward building their brand image can become separated from their customers by a single mistake in judgment. Conversely, a company’s brand can take off and rapidly become a world-class brand.

Brand managers should take all these factors into account. They need to check whether the brands they are responsible for are using the right strategies. Several questions that they need to ask include: Does my company, place of business, or brand appeal to consumers over the long run? Am I sacrificing brand image at the cost of a short term rise in profits? As time passes, does my brand become embedded in the hearts of consumers?

Brand managers always stand at a crossroads where they must make a choice. The choices they make have lasting repercussions on a brand’s image and its literal life or death. Thus, they should carefully consider and deliberate over the strategies they are using, so that they can make the right choices, when the time comes.

By Park Heung-soo, Professor, Yonsei University School of Business