Brands are a means of differentiating a company’s products and services from those of its competitors. There is plenty of evidence to prove that customers will pay a substantial price premium for a good brand and remain loyal to that brand. It is important, therefore, to understand what brands are and why they are important. For example, Macdonald sums this up nicely in the following quote emphasizing the importance of brands –
“…it is not factories that make profits, but relationships with customers, and it is company and brand names which secure those relationships”
Businesses that invest in and sustain leading brands prosper whereas those that fail are left to fight for the lower profits available in commodity markets. One complete definition of a brand is, “A name, term, sign, symbol or design, or a combination of these, that is intended to identify the goods and services of one business or group of businesses and to differentiate them from those of competitors”. It is very important to be clear about the difference between brands and products, as
- Brands are rarely developed in isolation. They normally fall within a business’ product line or product group.
- A product line is a group of brands that are closely related in terms of their functions and the benefits they provide. A good example would be the range of desktop and laptop computers manufactured by Dell.
- A product mix relates to the total set of brands marketed by a business. A product mix could, therefore, contain several or many product lines. The width of the product mix can be measured by the number of product lines that a business offers.
Managing brands is a key part of the product strategy of any business, particularly those operating in highly competitive consumer markets. In its simplest form, a brand is nothing more and nothing less than the promises of value you or your product make. These promises can be implied or explicitly stated, but none-the-less, value of some type is promised.
Additional Definitions
Brand image is defined as consumers’ perceptions as reflected by the associations they hold in their minds when they think of your brand.
Brand awareness is when people recognize your brand as yours. This does not necessarily mean they prefer your brand (brand preference), attach a high value to, or associate any superior attributes to your brand, it just means they recognize your brand and can identify it under different conditions.
Brand awareness consists of both brand recognition, which is the ability of consumers to confirm that they have previously been exposed to your brand, and brand recall, which reflects the ability of consumers to name your brand when given the product category, category need, or some other similar cue.
Aided awareness occurs when you show or read a list of brands and the person expresses familiarity with your brand only after they hear or see it. Top-of-mind awareness occurs when you ask a person to name brands within a product category and your brand pops up first on the list.
When you think about fast foods and Luxury cars, Mc Donald’s and Mercedes Benz come to mind? These brands enjoy strong top-of-mind awareness in their respective categories.
