Donut shops are competing with each other, even though they know each other personally and they belong in one same group. They have many similarities that tie them. But do they have to compete for customers by taking away customers from other donut shops? It does not have to be!
Donut shops in Texas can be tied together under one brand. And this will give people many benefits, including that people do not have to compete with each other, they can advise each other, and other more benefits.
One of the significant benefits of getting under the brand is a change in the image of the stores. If people get the brand, people will feel more credible as they can get damage compensation easier and safer. For example, if the customers want to get damage compensation for the small, individual running store, they could worry about store closing, which will make customers unable to get the compensation. However, if the stores are tied by the name of the brand, customers do not have to fear not getting compensation from the stores. Of course, this is an exaggeration, but it does not change the fact that brands give customers psychological stability.
Another effect of the brand is the increase of the customers. Customers usually seek the familiar store when they want to buy something. There is much research about how brand familiarity makes customers increase the usage of the shops. This will make the shops encounter more customers as they will feel familiar with the stores that are under one brand. Customers will see the brand frequently as they pass the donut shops, and this will give customers to feel familiar about donut shops included in the brand. This can also cause customers to have higher loyalty as they can access it easier and can have a stronger emotional connection.
These are major benefits when a brand is created, and these are the major effects that influence the profit of the stores. However, there are more benefits in branding, and these make branding a favorable choice to make.