Before asking what brands are for, you need to understand what a brand is. If you search the Internet for “What is a Brand?” you‘ll get a pile of definitions like:
- At its core, a brand is a promise to consumers
- Visual + Verbal + Experiential = Brand Perception
- Brands are built by consumers, not companies
- A brand is the essence of one’s own unique story
- Branding is the encapsulation of a company’s mission statement, objectives, and corporate soul as expressed through the corporate voice and aesthetic (I didn’t know a corporation has a soul, did you?)
- A brand is clear, reliable, and believable to both your consumers and your employees
But, interestingly, after reading one after another, you still walk away scratching your head and asking yourself, “But what IS it?”
The term brand has evolved over the years which might be some cause for the confusion. Used to be that a brand was the non-generic name for a product also known as its “brand name.” So for example, General Mills sells a frosted toasted oat cereal with marshmallows that is magically delicious.
But that was then and this is now. Today, people would say General Mills sells the Lucky Charms brand of cereal –suggesting the brand and the brand name are one and the same.
But not so in today’s marketing. Today, there is much more to a brand than its mere name. Brands are the most valuable thing that some of the big guys, like Apple and Target own, and are often worth much more than the companies’ property and machinery. In fact, brands account for more than 30% of the stock market value of companies in the S&P 500 index.
In a recent article in the Economist, it was reported that “When Imperial Tobacco, the world’s fourth-largest cigarette-maker, said in July that it would spend $7.1 billion to expand its business in America, its chief executive, Alison Cooper, was adamant on one point: it will not be buying companies. Instead, in a three-way deal with Reynolds American and Lorillard, it will pick up a factory, a sales force and, above all, a collection of brands. Two of them, Winston and Blu (an electronic-cigarette brand), will be “the focus for the lion’s share of time and money invested. “
In its simplest sense, your “brand” is what comes to a prospect’s mind when hearing your brand name, including both factual and emotional responses. A brand name is tangible. People can see it. People can touch it. Your brand is the opposite – it’s intangible. It exists in someone’s mind.
Because brands are thought to inspire customer loyalty, grow a large fan base, provide product recognition, companies feel that a good brand can command a premium price for the product and allow for ‘a get out of jail free’ card if they should fall short. It’s been said that “the emotional bond puts credit in the bank. Brands are a promise to consumers and they serve as an insurance policy to cover the cost of breaking it.”