Branding decisions are important to company strategy and a powerful product differentiation tool. Some companies brand individual products separately while others build company brands that span their entire product lines. But what exactly is a brand?

Definition of a brand

The American Marketing Association defines a brand as:

“A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers. A brand may identify one item, a family of items, or all items of that seller.”

Basically, a brand identifies a seller, manufacturer or product via logos , names, trademarks, or other symbols. A brand represents a seller’s promise to deliver specific benefits consistently to buyers. But this doesn’t tell the whole story. Brands can convey multiple meanings including:

  • Attributes & benefits: A brand says something about the product’s attributes such as quality and durability. Customers care less about attributes than benefits. Attributes must be translated to benefits (emotional or functional) in the eyes of the consumer. A high quality attribute could translate into the benefit of “less hassle and maintenance”.
  • Culture: A brand like Toyota can bring to mind certain culture and values. Toyota represents Japanese culture – efficient, organized, high quality.
  • Personality: A brand can represent a certain human characteristics. For example, Levi’s represents sensuality, rebellion and being cool. A brand’s personality can suggest the type of customer that uses the product.
  • The branding challenge is to develop deep positive meanings for the brand in the eyes of the consumer. When choosing meanings to associate with a brand, it’s important to focus on benefits rather than attributes. Benefits are what interests customers.

Brand power

Brand power varies from brand to brand. At one extreme, some brands are completely unknown to most buyers. On the other hand, some brands (such as Heinz and Mercedes) command a high degree of brand awareness. The higher the brand power, the more likely customers will stay with the product, value the brand, and even be devoted to the brand.

To maintain a strong brand, it needs to be carefully managed so that it doesn’t depreciate. This means improving brand awareness, perceived benefits, and positive associations. This requires investment in R&D, adept advertising and excellent customer service.

To Brand or Not to Brand

Sophisticated branding is a relatively recent phenomenon. In the past, most products were sold out of barrels, carts and bins, completely unbranded. Branding requires effort and cost, yet today, most products are branded. There are products sold as generic (or unbranded) alternatives to branded versions. Clearly however, many manufacturers and suppliers consider the costs worth the benefit. What are some benefits to branding?

  • Branding can help build a positive corporate image, allowing for new products from the seller to gain acceptance more quickly or easily
  • Branding can help bring about customer loyalty. This helps insulate the seller from competition
  • Brands and trademarks help provide the seller legal protection of unique product features
  • Branded products are preferred by many customers because it makes it easier for them to compare quality and shop more efficiently

Choosing a brand name

Before choosing a brand name, a branding strategy has to be chosen. There are 4 commonly used branding strategies.

  1. Blanket product family names: Under this strategy, all products are branded under the same name. Most small and medium-sized companies use this strategy. It has the advantage of incurring less costs for name research and advertising to build up brand awareness. Additionally, if the brand name is strong, new products under that brand will more likely have strong sales.
  2. Individual product brand names: Each product has its own brand name which is different from the company name. This strategy is often used by larger companies. It has the advantage that the if the product fails or is seen to be of low quality, the company’s reputation is not hurt. The downside is that branding each product incurs extra costs.
  3. Separate product family names: Companies with products that are quite different, it’s often better to use separate family names. For example, Sears uses the name “Kenmore” for appliances and “Craftsman” for tools. Additionally, companies often use different brand names for products lines in the same family if the product lines have different quality standards. A ketchup maker may sell higher quality ketchup under its brand name and a lower quality using a different or generic name.
  4. Company name combined with individual product names: The company name legitimizes the product while the product name serves to individualize the product. At the time of this writing, Hewlett-Packard uses “HP Pavilion”, “HP Envy”, and “HP Touchsmart” as product names for its different laptops. Kellogg uses names such as “Kellogg’s Cornflakes” and “Kellogg’s Rice Krispies” for its different cereals.

Once a brand name strategy has been chosen, it’s time to pick out a specific name or names. Companies commonly chose the name of a person (Gillet, Honda), quality (Duracell), lifestyle (Levi, Apple), or an artificial name (Häagen-Dazs, YouTube).

Coming up with a brand name can be a difficult process. There are some guidelines that can simplify the process. Successful brand names often have at least one of the following attributes. They:

  • Are easy to pronounce, remember, recognize and sound pleasant: Coca Cola, Lululemon
  • Say something about the product’s benefits: Pizza Hut, Duracell
  • Suggest something about the product’s qualities such as a color or action: Mr. Clean, Fido
  • Are distinctive: Nike, Kodak
  • Avoid negative meanings in other languages: Nova (“doesn’t go” in Spanish)

Outsourcing the brand name decision is also an option. There are companies that specialize in coming up with brand names for their customers. The top firms in this industry charge a lot of money but larger companies often find the cost worth while. There are many smaller consultants available that cater to businesses that don’t have a lot of cash available. Of course, smaller consultants usually have fewer resources at their disposal.

Repositioning Brands

Even companies with strong brand positions usually have to reposition their brand eventually. Many companies change their branding strategies gradually and sometimes drastically in response to new competitors and other changing industry factors.