Question

How does brand image help customers? How does it help the specific company? (5 Marks) Minimum 450 words.

Answer 1

- Corporate image refers to what picture any organization holds ineyes of the customer. A positive corporate image is very importantas it serves various useful functions from the prospect ofcustomer.

o A well known corporate image provides customers a positive assurance about a product or service. It boosts the confidence of the customer regarding his purchased decision.

o When any product is less known to a customer then this corporate image provides him confidence that his purchasing decision is right. Also the search time is reduced in the purchased decision as a positive image reveals that the product is good.

o It provides psychological reinforcement and social acceptance of the product. Any product from a better-known organization is accepted by all and also provides a feeling of satisfaction that your product is from a reputed organization.

o For e.g. any product from KFC either in Asian countries or in European countries the quality remains the same.

- Companies also are benefited with a positive corporate image. Various benefits are:

o •Positive customer feeling to new products: A quality corporate image helps organization in developing new goods and services as customer are familiar as well as satisfied with the corporate’s name and image and thus they would be willing to try these new products.

o • Allows company to charge more for goods and services: Customers feel that they get what they pay for i.e. better quality is linked to higher price and this led to improved markup and profit margins for the firm.

o • Customer loyalty: Companies with positive corporate image have more loyal customer which results in purchasing products more frequently as these customers are less likely to make substitute purchases than any other company offers sales, discounts etc.

o • Positive word of mouth: Loyal customers are associated with positive word of mouth endorsement. Favorable comments help organization to generate more sales and attract new customers.

o • Higher level of channel power: Retailers display products which have positive image. They want brands that pulls customer into the store. Thus an organization with a high positive image retains control and channel power.

o • Ability to attract quality employees: Employees are attracted towards firms with positive reputation thus potential workers apply for jobs and results in lower cost of recruitment and selection. Attrition rate is also very low in such organization.

o • More favorable rating by financial observers and analyst: Companies with strong corporate image often gets more favorable ratings by Wall Street and other financial institutions thus helps organization to raise capital easily, gain support from legislatures and government agencies. Also rumors wrong doings is less believed by regulatory agencies.