Strategic Branding: Factors Influencing the Success/Failure of Start-up Branding

Brands play a new and evolving role in meeting today’s marketplace’s rigors. Brands have traditionally been about creating consistent, ongoing, and meaningful customer relationships over time. Brands today are powerful change catalysts (Ted Leonhardt, Bill Faust, 2010). Branding is one of the main aspects of any organization, small or large, retail or B2B. The brand is a customer promise. It tells what to expect of these products and services and differentiates offers from that of your competitors. Consistency and strategy lead the brand to strong brand equity, meaning added value to products or services offered to the company that allows charging the company more than just unbranded products (Williams, 2018).
In time startup roles are growing rapidly in the economy and there are various definitions with time. According to (Maja K Ruzzier, Mitija Ruzzier, 2015), who say that startup is ‘ a group of people working to achieve something new and impactful in common sense, driven by a vision for the future and potential for growth, sharing an exciting environment in unstable and high risk of failure. ‘ So effective branding is important to consolidate brand associations, improve positioning with value and brand communications. If branding doesn’t go right it will lose its identity, success, and value.
The following factors are provided each for Start-up Branding Success and Failure:

Successful Startup Branding Factors:

Reliability in brand elements: Brand construction needs to be addressed internally or from a so-called concept of identity. This approach mirrors the views of brand builders and implementers who contribute to establishing the key brand identity characteristics with fundamental reactions. Authors argue that the identity of brands must go beyond brand visual elements. In the process of building the brand, however, name, logo, and slogan are important, but not the only elements to be considered. Value-adding processes within brands give their competitive position in today’s competitive environment (Maja Konecnik Ruzzier, Mitja Ruzzier, 2015). According to Batey (2008), ‘With every consumer touchpoint experience, brand associations increase.’ It can, therefore, be concluded that the key to the successful launch of brands in the relevant brand elements. Irrelevant brand elements can lead to incoherence in custom branding. An example of brand elements Apple would be the perfect example. Apple has gained popularity over all these years with the product that has their name starting from MP3 to operating systems. Apple has over time strengthened its brand consistency with a series of products that strengthen its core identity — elegant products which push innovation borders. The mantra of professionals in the production of a message is frequency, coherence, and relevance. Dougherty says at the company foundation; a brand charter should be drawn up which shows who your products & are not (Donnelly, 2010). The mistake is often made by new companies to try to please all but in the end, no one is happy. That’s why consistency is important to get success in startup branding. So with time when entrepreneurs are coming up with different brands and the same kind of products are introduced occasionally so to keep track in the market they need customer awareness (Telegraph, 2015).

Impact: The branding elements have such long-term effects on a brand because these elements s describe what your brand is. And that’s how the consumer will get to know about the brand which is more crucial for a start-up company. So, these brands can lose sight of the customer if the elements didn’t go hand in hand with the brand image.

Intensive Distribution: One of the first strategic decisions entrepreneurs must take is to select a future industry for their startup. The industry features, specific characteristics, and potential significantly influence a start-up’s success and therefore requires considerable attention in its analysis and selection (Maja Konecnik Ruzzier, Mitja Ruzzier, 2015). Unless the distribution network is strong enough, a new brand is hard to establish in the market. The first opportunity to define a company’s strategy and positioning is marketing. Innovating startups usually only pursue a mall number of strategic options at once without losing their effectiveness in delivering consumer values because of financial and hr limitations. There is a possibility of opportunities while entering the market. Technology entrepreneurs can develop skills because more established companies are unable to organize and market new opportunities. For example, Barnes and Noble became a dominant player in the market and stands as a threat to Amazon because Barnes came into the market through new technology (Joshua S. Gans, Scott Stern, 2002). It is thus possible to decipher that customer awareness and acknowledgment are induced with the right distribution strategy and availability, thus enhancing brand growth.
Impact: This intensive distribution will help the startup branding getting recognition to the suitable customers and fulfilling all the details of brand association to the customers.

Efficient Marketing Communications: Marketing communication is known to be the “voice” of the company and is a way of dialog and relations between consumers and the company. The business could be viewed as a strategic focus linked to the interpretation of strategy as a perspective. This may influence strategies as plans (measures intended) and strategies as actions (measures implemented) (Sascha Kraus, Matthias Fink). New companies need to be particularly attentive to their product positioning strategy as they cannot allow themselves in the search for a profitable market location to compete with more established, resource-rich companies. Therefore, new businesses should target markets with served needs and offer customers superior value by offering a first product that is much more distinctive than existing products and which better suits customers (Y. Lisa zhao, Dirk Libaers, 2014). One of the examples would be Chobani which is a company selling yogurts. This startup has made US$1 billion annually within 10 years solely because of social media marketing. As they have chosen social media to communicate with the vast market (Revery, 2017). Chobani CMO has told to do the market research they have used Qualtrics which has saved them a lot of money. They contacted their customers to get their feedback and invited the top fans on Facebook to chat and talk about the products (Jennifer, 2017).
Impact: Efficient marketing with long-lasting communication channels like relevant brand messages will have a great impact on startup branding. Consequently, if a target audience for a brand launch is not reached by the communications, consumers may not recognize a new brand.

Factors for Failures in Startup Branding:

The impact of new businesses on innovation and the economy itself is one of the most obvious phenomena in the contemporary economy. Some authors say that modernism is driven by a small group of new companies, while most companies have an important role to play (Paul Nightingale, Alex Coad, 2013). A new focus was put on startup entrepreneurs in recent years, with scientists and media acknowledging the ability to perform this value.

Business model: In 1975, on the basis of Edwards ‘ original work in 1972 under the SHEL model, Hawkins developed the SHELL model, which are Software, Hardware, Environment, Liveware Persons, and Liveware Environment. SHELL’s model has both active and latent failures. Typically, there are active failures at operational ends, while latent failures are observed in the structure of an organization, not known or not. So, this model identifies why startups fail. The lack of a product/market adaptation damages the product/service and the business model’s success. The product/market fit means that the right product or service can meet that requirement in the right market. The wrong positioning, however, means that the product/service is misknown, with consequent poor performance or the risk of starting at a position “stuck in the middle,” as determined by (Porter, 1980). The result shown after the analysis done by SHELL says that startups fail because of the business model and business development (Marco Cantamessa, Valentina Gatteschi, Guido Perboli, 2018). To make the startup effective broad planning with efforts is needed for industry or firm. One of the famous examples will be Netflix. Throughout all the changes in Netflix one thing that remains constant is their business model. Here if the customer wants to increase the return on your monthly investment, Netflix users can view hours of streaming video. Business start-up subscription models also provide more cash flow forecasting. Customers know how much each invoice will be spent and companies can make more exact projections based on their total users and the average churn rate between cycles (Miller, 2018). From this, we can say that entrepreneurs who failed to find the right business model according to their product business fail.

Insufficient Revenue: A successful startup will have enough money to cover the costs, but a startup in loss cannot generate enough money as well. It has cash flow problems and poor long — term prospects that lead to its operations being discontinued. The failure of financial management knowledge contributes to the low presence of the creation of new businesses and, ultimately, the large failure rates of small and medium enterprises (SMEs). Financial factors depend on various parts of startups. Like the difference between old and young educated entrepreneurs, regional factors, etc. Moreover, in the case of startups, there is no track record of the owners and how it is running. This information scarcity makes financing a little more difficult because investors want to know where they are investing and why they are investing. The entrepreneur in small startups not only provides management expertise but provides the company with financial, knowledge, and human capital. Such a specific human capital cannot be easily transferred to alternative factors which tell about the problem of the opacity of information (Sanyal, 2010). That’s why it’s hard for a startup company to get enough investors to get the funding otherwise it’s hard to brand it to reach the market.

Positioning Failure: Focusing on consumer perception about a company’s product and service is call brand positioning. So, with the right consumer and knowing what the consumers want is important to find out for a startup brand. Companies who don’t choose a right positioning that is not considered relevant to consumers and/or that does not sufficiently distinguish the brand from rival’s risk damaging a product’s perceived positioning, leading to lowering sales (Fuchs, 2013). The new brand may be launched without consumers knowing of the brand identity, that’s why it’s important to focus on the brand attributes to show the consumer. This shows that marketers who can’t align their brand associations with the target audience do not remain in the evoked set of consumers which leads to little brand awareness and recognition. One of the startups Everpix is out of business due to a lack of positioning. A great application was created for the store, organization, and viewing of large photo libraries by the Everpix co-founder. The problem was that they lacked strong marketing skills and ignored their importance. “They have been spending too much on the product, not enough time on growing and selling. It was a mediocre first pitch deck for investors. It was too late to start marketing. They have failed to position themselves effectively against very robust and free-standing companies like Apple and Google (Group, n.d.). So, to get success positioning is important. Positioning, therefore, affects the consumer over the long term. If the new startup brand does not position itself correctly, the brand cannot be considered while making the buying decision.

Misunderstanding Target Audience: A group of customers directed at the branding strategy to place the brand in their minds is the target customers. A central aim of doing conventional branding is to detect the target audience to build brand communications according to this group’s needs. Those branding communications are therefore aimed at a different segment of consumers when the startup brand misses their audience. Therefore, indications and visuals should be present in the brand to get emotionally with the brand. If the brand does not contact the audience, though, the positioning goes wrong and there is no brand identity or value. For example, Avon’s target market is mainly female audiences who give lifestyle and beauty services. But unfortunately, Avon did not understand the Japanese women when brought it to Japan. The problem was Japanese women are not comfortable buying from stranger brands. Furthermore, the company did not have enough space to receive sales representatives (Knight, 1995). That’s why Avon couldn’t target their perfect audiences which tells the importance of it when startup must do their branding.

So, if the target market research is not done properly it will affect the branding communications which will bring failure for the brand. As finding an accurate target audience is the most important part before startup brand launch, then it will influence the brand and organization on a long-term basis.
The existing academic and industry literature shows that the factors that influence the success and helps to correct the failures of a startup brand launch are interdependent. Inner and outside factors are intertwined to form a structure to be followed by all organizations in the promotion of a new brand. To create a marked identity and the price strategy to adopt, it is therefore essential that organizations understand the brand elements, effective marketing communication, right target audience, useful positioning strategies, business models, etc. Finally, the launch of the startup brand is an area of great importance for branding to create the first impression among consumer mind which stays for a lifetime. However, the rebranding strategies can always lead to scopes that enable a brand to get success again.

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