Branding – definition

American Marketing Association:

A name, term, design, symbol, or any other feature that identifies one seller's good or
service as distinct from those of other sellers. The legal term for brand is trademark.

Philip Kotler:
“ a seller’s promise to deliver a specific set of features, benefits and services consistent to
the buyers

Some examples of branding include:

 McDonalds. McDonalds' giant golden arches depicting an "M" is a

brand recognisable around the world as belonging to the products
produced by McDonalds, as well as the reputation of their quality and
good name.

 Apple Computers. This company uses the brand name "Apple" and
one of its trademarks is an apple

Functions of a brand

 Brands play a role in terms of communication and identification.

They offer guidance, convey an expectation of quality and so offer
help and support to those making purchase decisions. Brands make
it easier for consumers to interpret and digest information on
products.
 The perceived purchasing risk is thus minimized, which in turn
helps cultivate a trust-based relationship.
 A brand can also serve as a social business card, expressing
membership in a certain group..
 Consuming certain brands is also a means of communicating
certain values. By opting for particular brands, a consumer
demonstrates that he or she embraces particular values; the brand
becomes a tool of identity formation.

The functions of brands from a company’s perspective

  A brand fosters brand and customer loyalty. The reduction in
perceived purchasing risk lays the groundwork for a relationship of
trust, giving brands a role to play in lashing customers to a
company.
 . Strong brands in particular keep sales levels and market share
constant and considerably lessen dependence on short-term special
promotions.
 A brand unlocks great potential in terms of licensing opportunities
as well, helping companies achieve plans for international
expansion.
 Strong brands in particular can reduce the risk that new product
launches will flop and can be used as platforms for successful
brand stretching (also in terms of launches in completely new
product segments and sectors)

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