What is a brand? What do they do? Why are they important?

The term “brand” originated from branding cattle, leaving a mark of ownership. Larger companies manage their identities for competitive advantage, solving problems and leveraging change. A brand’s image is the consumer’s perception. Sometimes this perception is assumed but often it is a product of marketing messages, communications and brand experiences. (Gil Bashe)

What exactly defines a brand? Is it a logo? Is it a color scheme? Is it a slogan? A tradition? A promise? A brand is made of all these parts and more.  Many small elements go into branding. Some brands are built around one of these aspects while many are created around a combination of pieces to make a successful whole. Eric Berkowitz defines a brand as “any name, term, colors, or symbol that distinguishes a seller’s product from another.”

Brands identify a company, its products and most importantly, its promise and perception in the mind of the consumer. Brands are important because they are the first impression a consumer has when they need a company’s product or service. A consumer might go for years without needing or buying a car, but when the time comes to shop for a car, they will recall what comes to their mind first for certain brands – quality, safety, luxury, etc. They might buy a Coca-Cola because they remember it from their childhood, or a Coors Light because it was the first beer they shared with their dad.

Brands create value because it is one of the easiest ways for consumers to evaluate their purchase decisions.

A brand is a promise and a symbol of trust. Once a product or service fulfills its customers and incites repeat business, consumers develop loyalty to a specific brand. Some of the most successful brands are built on a promise of consistency. Customers know what to expect when they order a Big Mac, and McDonald’s delivers the same product/experience at every one of their locations.

Brand loyalty is a result of keeping the brand promise and always giving the consumer what they want and expect. When customers start to promote products and services they consume and love, and become ambassadors for the brand, the customers become the marketers.

I’m a runner, so some of my favorite brands are for shoes or apparel. I have gone through many different brands of shoes and learned the hard way which brands are more dependable and comfortable. Brooks and Saucony are brands that serve me best – when I need a new pair of running shoes, I immediately look at these two brands. Another brand of apparel that I have become loyal to is Under Armour. I have UA apparel for all seasons because I know the brand is a leader in running fabric technology, and I associate the positive experience of being dry and comfortable (and warm in extreme winter temperatures). This positive experience in my mind makes the UA brand first on my list of choices when I am shopping for new running clothes.

Brands should definitely be on the balance sheet in some form because they have substantial value for companies, products and services. They directly affect the bottom line and consumer behavior that builds sales/customer loyalty.

References

Bashe, Gil, and Nancy J. Hicks. Branding Health Services: Defining Yourself in the Marketplace. (2000). Aspen Publishers, Gaithersburg, Maryland.