What is Brand?

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In a simple sense, a brand is a mark used to identify a product or service, or even an organisation as a whole. So, why do organisations go to so much trouble and expense to create and manage their brands?

Brand: From a Business Perspective

There is a long list of benefits companies can gain from having an effective brand strategy.

Brands make a company’s products or services stand out from their competitors. As we’ll see later, this is an important advantage when it comes to simplifying a buyer’s decision making process.

They also create a barrier to entry to new competitors. In markets where developing and launching a new product line can be expensive, how much more difficult will it be going up against established brand leaders?

The reputation a brand develops over time with consumers can tilt a buying decision in an established brands’ favour. This is true in business-to-business markets as well as consumer markets. A business buyer has their reputation on the line when they make buying decisions. By selecting a well-known established brand, they’re less likely to be criticized if things go wrong.

An identifiable brand can be legally protected, through measures such as trademarks. This safeguards the money and other resources an organisation has invested in developing and creating a branded product or service.

In an organisation with several product types, having unique brand business streams can simplify production, marketing and management. For instance, something as basic as packaging and labelling become more streamlined with different brands.

Financially, brands have two distinct advantages. Firstly, a brand in and of itself can acquire equity value for the company that owns it. Secondly, brands can often command premium prices and they tend to be less sensitive to competition based on price alone.

Brand: From a Consumer Perspective

Consumers in retail and business markets have a lot to gain from brands.

The Buyer Decision Making Process

Consumers in most markets have multiple options to choose from. Having a brand in the list of options can simplify and speed up their buying decision.

It does this by reducing their risk. If they have dealt with a brand before, or have heard favourable reports about it, then it reduces several risk factors. These are financial, psychological and social.

A known brand also sets certain expectations. Consumers therefore have a reasonable idea of what they’re going to get. This takes some of the guesswork out of buying.

Tangible Brand Benefits

Many brands seek to differentiate themselves based on performance characteristics. With experience, consumers identify with these attributes as desirable for them and worth the premium price, or not as the case may be.

These tangible benefits include attributes such as reliability, innovation, performance, durability, ease of use, quality of service and so on.

A brand that can establish itself in this way has a distinct market advantage.

Intangible Brand Benefits

Some of the most powerful and enduring brand benefits in consumers eyes are entirely in their minds and hearts. A brand that can reach this status risks becoming iconic.

Examples of this include luxury brands, which infer a sense of prestige and social status on those who consume them.

Other examples, convey a sense of identity and group belonging. Classic examples of this are Levi’s jeans or Harley Davidson motor cycles.

For other brands, it is the sense of shared meaning and values. Examples here include The Body Shop and Greenpeace.

Sources:

K.L. Keller, Strategic Brand Management, 4th Edition, Pearson Publishing.

J.N. Kapferer, Strategic Brand Management, 4th Edition, Kogan Page Publishing.

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© David R. Durham,

Digital Marketer.

http://brandrefuge.com/

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