Differentiating between Company Brand and Product Brand

Differentiating between Company Brand and Product Brand

One of the top two responsibilities of the chief executive in a startup is to ensure that there is sufficient capital at all times, writes Ashish Gupta in Economic Times. That sometimes requires raising money from investors, an unpleasant task for most people and one that requires mindset change. When we buy any product, say a mobile phone, we do so either because someone told us to or because our research led us to it. Even when we research a product, our view gets influenced by what we have heard about it. In the world of consumer goods, this is the power of the brand. Raising money also relies a great deal on how the company is perceived. This perception is the company’s brand. The first round of money is largely driven by this brand perception. A company has two types of brands that coexist — the brand of the company and the brand of its products. Frequently, the company’s brand gets forgotten or confused with that of the product. Yet, the company brand is omnipresent — created by the team, vision, past success, market opportunity, etc. For example, Infosys cofounder Nandan Nilekani’s next startup will have an immediate brand because of the team, well before the product has even been identified.

The importance of this metric diminishes with time as financial and operating metrics become the criteria for evaluating a company. When customers start using its product, the company’s brand gets pushed even further back. However, this neglect is a wasted opportunity. In most companies there is no explicit recognition of the company’s brand and it has no identified owner. Given the criticality of the company brand for raising money, it’s imperative for the CEO to build that brand. CEOs who are very skilled at raising funds realise that they need to maintain the company brand in addition to the product brand. Company brand-building happens well in advance of fund-raising and ideally never stops; the intensity just varies with ti- me and circumstances. There are many ways to build the company brand in the early years of a company’s life.

This includes direct engagement with investors, press appearances that are noticed by investors (and by prospective employees, and customers). It’s often hard to stay in the press for the right reasons, so this has to be dealt with conservatively. Being present in forums to establish the position of a thought leader, and be seen by peers in the correct context is important. These same peers will be used as references by future investors. Founders/CEOs must cultivate key influencers in many areas as references or engage them as advisers. A good company brand offers benefits that go beyond fund-raising. It drives recruitment and retention. It drives sales because customers often buy the company before they buy the product.

Company brand-building therefore needs to be owned explicitly, often by the CEO, and catered to as one of the critical items on the agenda. By investing in the company brand from day one, the company’s odds of successful fund raising go up substantially.

SJP @DigitalAsian - ShareYaar

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