Cosby, Trump, and Jordan have this in Common

Branding Done Well will Give Any Stock or Business an Advantage

Donald Trump at Podium
Donald Trump Speach. Darren McCollester

Branding, in its most basic form, relates to what connotations a product or service drums up in your head.  For example, is McDonald's healthy, are toys made in China cheaply built, are BMW's pretty well-built cars?  Most people would have answers to these questions which would match your own.

Everything is a brand; celebrities; products; businesses; countries.  When done properly, branding can really provide an advantage over all the competition, whether that be other actors, nations, products, or services.

 

This is why understanding branding and its effects is of utmost importance when you buy a share of a stock.  Purchasing a share of stock means you are buying a share of a business.  

Nothing can give a company better chances of success, and increase product sales and price points, than branding.  When the underlying business does well and grows, their shares will typically follow suit.

To invest well, you generally will want to uncover shares in businesses which are poised for growth.  Nothing will generate that expansion among their current and prospective customer base more than solid branding.  Thus, reviewing the brand of any corporation, and analysing their strengths and weaknesses, is an early and important step for finding winning stock market investments.

Keep in mind, brands can have positive or negative impacts, depending on what expectations people associate with them.  Many people would be afraid to travel to certain countries (Angola, North Korea, Somalia), while not being concerned to go to others (Belgium, Denmark, Scotland).

 Most people believe that Italy and France make the best wines, while Germany has some of the greatest beers.

All of these assumptions may or may not be accurate, but it gives some major advantages to the region or business with the good connotations.  Typically, they can charge more, and will enjoy greater demand than their competition, whether we are talking about a nation, a person, a product, or a business.

Some prospective motorcycle drivers will only buy Harley-Davidson, and would never purchase a Honda, even though they have no prior experience with either.  This example is what the power of branding can do, and is part of the reason why Harley's typically cost more than most other motorcycles, and there is often a waiting list to purchase one.

Branding relates to all touchpoints of a product or service.  The customer service representatives who answer the phones, the purchasing process, every step of the customer experience, the end results, all become pieces of this one big thing we know as the brand experience.

People are brands too.  Donald Trump, Taylor Swift, Mother Teresa, Michael Jordan...  Maintaining your personal brand will go a long way to your popularity and trust factor, and by extension future record sales, television viewership, election results, etc...

Branding can be positive or negative, and the connotations can turn on a dime.  In many cases, once a person or product gets a bad reputation, it may never be shaken off.  Consider the case of Bill Cosby, who's brand fell from popular American icon to sexual predator.  He will be remembered as the latter, not the former.

While branding relates to people and nations, it can be tremendous help when assessing which investments to make.  Finding the stocks in companies which enjoy positive brand benefits will often lead to long term investment gains, as the underlying companies grow.