The Importance of Branding: From Multinationals to SMEs

Visual communication is an ancient discipline, dating back at least as far as 1500 BC, when artisans producing small objects such as vases and plates began marking their creations with their initials, allowing them to be recognised among the work of others.

Over the centuries, the discipline has evolved dramatically, first and foremost in terms of tools and quality. Yet its primary function has remained unchanged: to convey a promise of quality.

Giving a product or service a brand, an identity, means taking on a commitment. It means promising those who purchase a particular object or experience that they can trust the people who created it.

A brand is a promise, and the success a market attributes to a given brand is proportional to the honesty and authenticity of that promise.

Let’s take a “reverse” example to reinforce this idea.

In the economy of the Soviet Union, the concept of branding was considered contrary to the communist principles of the time. Although products were manufactured by different producers, the practice of marking them with identifying elements gradually disappeared. Bread, for example, was simply labelled as “bread”, and the same applied to virtually every other product.

Over time, this contributed to a decline in quality, because consumers could no longer identify which company had produced the loaf of bread that had gone mouldy so quickly. The problem became even more serious when the same decline in quality, caused by the inability to distinguish between manufacturers, extended to technical components such as ship rivets, some of which famously failed, with tragic consequences.

Removing the brand means removing the promise. It means removing the incentive for a company to uphold the commitment it has made to its customers.

Looking at the argument from the opposite, more positive perspective, it becomes clear why it is increasingly important for a company to express, through its visual identity, the commitment it has made to the market.

Major brands understood this decades ago and have used this powerful psychological lever to increase margins and profits.

The examples are everywhere. Consider, for instance, the strength of the promise that a brand like Mercedes-Benz makes to the market. It is a powerful promise, built over decades through excellent, high-end products, consistently supported by a refined and coherent visual identity and communication.

Today, that same promise can be extended to more mainstream products, such as the A-Class and B-Class. The brand halo surrounding them allows these cars, which are not fundamentally superior to other compact models from less “premium” manufacturers, to be sold under the promise of quality, prestige and exclusivity.

This is particularly striking when you consider that Mercedes-Benz now produces more cars than FIAT.

If we want to be a little more technical and rigorous, we should remember that branding provides a powerful solution to the problem of “information asymmetry.”

What does this mean in practice? When we buy a product, we know little or nothing about its actual characteristics. Take a washing machine: how many of us can claim to know the technical details of its electric motor, the chemical composition of the polymers used in the many hoses inside it, or have actually read the code of the software that controls its ever-growing range of functions?

I would say virtually no one. Wouldn’t you agree?

And yet, we confidently and enthusiastically buy the product because “it’s a Samsung!” or “it’s a Miele!”

A brand, together with all its representations and expressions, carries with it a wealth of information that reassures us and tells us something about a product’s characteristics, reliability, price positioning, level of refinement, or even its declared robustness. All of this information takes the form of a “promise” — which is precisely why the disappointment is even greater when that promise is broken.

Having and nurturing a brand forces companies to make a constant effort to ensure consistency between the values they express through their output and the products as they are perceived by the end user. If I am disappointed by a prestigious brand, my frustration will be twice as strong.

This is precisely where the power of branding lies. Taking care of your visual communication means taking responsibility and making a promise. It makes your company’s potential explicit, extends it, and brings it to the attention of the market even before your sales team — or even your products themselves — reaches the end user.

A well-crafted brand is like the “reputation” that precedes public figures: it is the prelude to success, a way of turning up the volume of your story, and the reputation we all care so much about as individuals.

The power of a strong brand helps companies grow and remain competitive in international markets, and this applies not only to large multinationals but also to small and medium-sized enterprises.

This is demonstrated by the “3F – The Value of SME Brands” research conducted by ICM Advisors and LC Publishing Group, focusing on the three “F” sectors: Fashion, Food and Furniture. In 2019, the research analysed the performance of 183 companies selected between 2014, when the initiative was launched, and 2018, with a particular focus on 30 of them. Each of these companies recorded above-average results, both in terms of revenue and profitability. Among the many factors that contributed to their success, the research identifies brand-building strategies as playing a key role, including the development of a recognisable visual identity, an appealing logo, and digital channels consistent with the brand’s values and identity.

If we turn our attention to the Chinese market — impossible to overlook today — we can see how many emerging companies are accelerating their international growth thanks to a remarkable sensitivity to and focus on visual communication.

Brands such as Urban Revivo are rapidly gaining ground, challenging and taking market share from established giants such as Zara and H&M. Urban Revivo’s deep understanding of the digital landscape, and particularly of Chinese social media, is a key advantage in reaching its target audience, Gen Z, through visual content and a tone of voice specifically designed for them.

Whether we like it or not, there is no longer any room for indifference or neglect. Major brands have accustomed the market to the idea of promise and trust: the trust that I, as a consumer, place in a company that communicates with me in a thoughtful and compelling way through its logo, website, brochures, packaging, labels, and the many touchpoints a company now has with its customers.

The great cultural challenge therefore falls on smaller companies today. They need to recognise what an extraordinary opportunity it is to make visible, explicit and tangible, through visual communication, the promise that entrepreneurs and business leaders have always carried within themselves and made, in their own way, to the market and to their customers.