Brand / Branding / Branding terms
Encyclopedia of Business Terms and Methods, ISBN 978-1-929500-10-9. Copyright © 2011 by Marty J.Schmidt. Revised 26 February 2012.
The Meaning of Brand, Branding, and Branding Terms
A brand is an identity associated with a company, or it's products and services, similar in some ways to a family name for an individual. This item defines brand in the context of brand-related terms including branding, brand equity, brand awareness, brand recognition, brand recall, brand loyalty, brand love, and brand franchise.
• Brand | • Brand love |
In the marketplace, an established brand can communicate expectations and beliefs about such things as product quality, reliability, superior design, exclusiveness, or desirability.The brand thus enhances perceived customer value in products and services, allowing them to command premium prices and bring higher margins to those who sell them. The extra price that buyers are willing to pay due to the brand (compared to an identical non-branded product) is called brand equity.
The reality and power of branding is apparent to anyone familiar with names such as Coca Cola, Apple, BMW, Armani, Louis Vuitton, Sony Ericsson, or Disney. Establishing an effective brand name can be a long and costly process, but once established the brand name can work as a powerful asset for marketing and selling. The brand names of such companies justifiably appear with book value on their balance sheets as intangible assets.
A brand name with legal protection against unauthorized copying or use is called a trademark (for more on the issues involved in choosing a brand name that can be trademarked and defended, see the encyclopedia entry trademark).
• Brand and Branding Terminology
• Establishing a Brand
• Measuring Branding
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Brand and Branding Terminology
Branding is the process of establishing brand identitiy. When a brand is widely known in its own market, and associated by customers with particular products and services, the brand is said to have achieved brand awareness. Brand awareness is measured as the percentage of the market that can make this association. Achieving high brand awareness is a primary objective when a new product is introduced an in the early phases of product life
In the last several years, the term brand love has come into use referring to the positive sentiment associated with a brand. The term brand awareness, on the other hand, refers to the ability of those in the market to recognize or recall the brand, associate it with marketing themes, and with specific products and their uses. In other words, brand love refers to customer feelings about a brand, while brand awareness refers to what they know about it.
The ultimate payoff for successful branding may be considered brand loyalty, the propensity of customers to buy the brand again and again, even if competive brands are more accessible or lower priced, or in the face of advertising or other marketing pressure from competitors to do otherwise. Parents of very young children, for instance, tend to be extremely brand loyal which purhasing baby food or diapers (nappies). if they find their brand out of stock in one place, many will travel to find another source that does have the brand in stock, rather than buying another brand. Cigarette smokers, people who dine often at fast food restaurants, and, and travelers who stay in branded hotel chains also tend to be extremely brand loyal.
Providers of other kinds of products and services, however, often have difficulty creating brand loyalty. Given the freedom to do so, mobile phone users, or cable television users, readily switch brands if another provider offers better pricing. As result, some service industries are well known for creating involumntary brand loyalty, by requiring long term contracts with substantial penalties for early cancellation.
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Establishing a Brand
The term "brand" comes from the old practice of burning the owner's distinctive symbol (brand) into the hides of animals, creating indelible proof of ownership. In business today, however, brand and branding are essentially marketing terms.
In some cases, brand names and brand images are created by a company's marketing organization as a marketing activity. Or, the company may hire brand and image consultants specifically for the task. At other times, Marketing simply works with the company name to establish that as the brand. In some cases, of course, both the company name and the product family name contribute a branding effect for a product (e.g., "Microsoft" and "Windows", or "Apple" and "iPhone.")
For successful branding, the marketing objective for a new brand will be to establish:
- Brand awareness (customers know something about the product and its uses, and they know something about the qualities that are supposed to be associated with the brand) and then
- High levels of positive sentiment for the brand (brand franchise or brand love).
Achieving brand awareness is typically accomplished through informative promotion such as traditional advertising, sponsorship of popular events, or sponsorship of popular internet resources. Marketing will also attempt to secure the attention of professional critics, industry analysts, product reviewers, trade press reporters, and even news reporters..
If the brand itself is to evoke positive affect—good feelings—the positive response must become associated with the brand in customer minds. Branded products that are well received with high levels of customer satisfaction will naturally build such an association over time.
Marketing, however, will attempt to accelerate the association through promotion meant specifically for that purpose. Most people are familiar with commercial advertisements having little factual information, showing people with the branded products having fun, or achieving recognition or admiration from others, or otherwise enjoying positive circumstances. Such advertisements, of course, are designed to associate the brand with an automatic emotional response. One famous example of this approach from the early 1970s was Coca Cola's series of advertisements featuring the song "I'd like to teach the world to sing in perfect harmony."
Successful branding may properly be called both an art and a science. It is true that some of the most successful examples of branding in business resulted simply from good products that met an important market need, at the right time (Digital Equipment brand computers, during the 1960s-1980s, are an example of this kind of "inevitably successful" branding). More often than not, however, successful branding calls for consciously directed marketing effort, requiring excellent communication skills, good aesthetic sensibilities, and a precise knowledge of customer psychology in the target audience.
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Measuring Branding
It is well established that successful branding contributes substantially to building customer demand, and competing effectively in the marketplace. Marketers therefore have a keen need to measure the impact of marketing efforts on factors such as brand awareness and brand loyalty. Measuring these factors is crucial for planning the use of marketing resources and the design and tailoring of marketing themes and marketing campaigns,
Market research on branding begins by identifying and describing the target market with as much specificity as possible. In the terminology of statistical research, this is known as defining the population of interest. The market or market segment targeted for branding may be defined by such factors as gender, age, business industry, occupation, geographic location, economic status, health, education, experience, special interests. or other characteristics. The challenge for market researchers, then, is to measure customer opinion, knowledge, and buying behavior in a customer sample that accurately represents this population
Brand awareness is measured as the percentage of the market that has the ability to recognize or recall the brand, associate it with marketing themes, and with specific products and their uses. Brand recognition is taken as one measusre of brand awareness. Brand recognition itself is typically measured in customer test groups, by presenting them with brand names and simply asking if they recognize which products or services are associated with each brand. When brand recognition builds to the extent that the brand brings high, measurable positive sentiment to products or services, marketers say it has achieved brand franchise.
Another measure of brand awareness is brand recall, where customer test groups are presented with (unbranded) product descriptions, and asked to recall any brand associations they may have. .
Brand loyalty may be defined either as the average time between purchases of the branded product, or (more often) the percentage of customers who buy a second time, a third time, and so on, even in the face of marketing for competitive brands, and even at the expense of some inconvenience (such as waiting to buy when their preferred brand is temporarily out of stock). Brand loyalty is also inferred from the percentage of customers who express a propensity to buy again through direct questions or questionnaires.
Research on branding may be carried out by the company owning the brand, but often the actual customer contact and measurement are accomplished with third party consultants or firms specializing in this kind of market research. Outside researchers, moreover, may or may not identify to customers the company sponsoring the research, in the belief that sponsor anonymity leads to more objective, unbiased customer responses.
Customer data for branding research is typically obtained through a combination of methods, including one or more of the following:
- Direct customer survey questionnaires, administered to customers who are
- Shopping at the business site, either before or after purchase.
- Shopping online, or immediately after online purchase.
- Members of the target market who are reached by telephone or mail surveys.
- Statistical summaries of online search queries for brand names.
- So-called "Qualitative research," such as the focus group studies (facilitated discussions with customer groups).
- "Test marketing" studies that measure buying behavior and customer knowledge, after administering different branding communications to different customer groups in the same market.
- Direct, passive observation of customer shopping behavior either in the business place or online.
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