book.chapter What is brand

A business's brand encompasses the sum total of how that business is perceived by all those who interact with it, including customers, investors, employees, the media and more. Branding refers to the process of actively shaping those perceptions through strategic actions like marketing, advertising, public relations and customer service. So a brand is much more than just a business's name, logo or products. Rather, a brand exists in the minds of consumers as a collection of perceptions, emotions and experiences related to that business. Brands hold immense value as strategic assets that directly impact consumer behavior and a company's financial performance. Indeed, the world's strongest brands like Apple, Google and Coca-Cola are worth many billions of dollars. However, many business leaders struggle to precisely define what a brand represents or articulate why branding should be a priority. In simple terms, a brand can be summarized as: the consistent perceptions, emotions and expectations that exist in the minds of consumers based on their cumulative interactions with an organization and its products/services. Branding is crucial for several key reasons: Firstly, strong brands accrue tremendous financial value that contributes significantly to a company's overall market capitalization. For a globally-iconic brand like Coca-Cola, the value of its branding equates to around half of its total market valuation. Additionally, branding fosters an emotional connection and relationship of trust between consumers and businesses. If a branded company makes the occasional mistake, loyal customers are more likely to dismiss it as a one-off and continue supporting that business. The more a consumer identifies with a brand, the more forgiveness they will demonstrate. Moreover, each positive interaction that meets or exceeds a customer's expectations presents an opportunity to strengthen brand perceptions. Delighting consumers consolidates brand loyalty over time. Equally important, established brands confer resilience against competitors. When consumers trust a brand, they will continue purchasing its products for years without needing to sample alternatives. Furthermore, research indicates people will pay a premium price, typically 9% to 12% more, for products from brands they know and trust compared to unfamiliar or generic alternatives. This 'brand premium' stems from assured quality and emotional connection. Additionally, brands tap into powerful subconscious emotions that profoundly inform consumers' decision-making and choices. Positive brand associations trigger a halo effect where past satisfaction primes future purchases. Finally, effective brand positioning condenses a business's ethos into a simple and easily digestible format for potential new customers. When done well, branding allows consumers to immediately and intuitively understand what a company stands for. Critically, in branding, perception equals reality. What matters most is what consumers believe about a brand rather than what the business thinks about itself. For this reason, brands fundamentally exist only as bundles of memories, emotions and expectations living rent-free inside customers' minds. Therefore, building a successful brand mandates first clearly delineating the values, purpose and characteristics that make that business unique. Then the priority becomes translating those core brand dimensions into actual lived experiences consistently delivered to consumers. Because above all, actions speak louder than words when shaping brand perceptions. Strong brands proactively stand for something meaningful that taps into consumers' aspirations and desires. Brand building cannot rely on superficial image management but rather demands genuinely understanding customers' needs and catering to them authentically. Additionally, resonant brands succeed by forging lasting emotional bonds with consumers. Distinctiveness in branding catches attention but only perceived relevance and shared values convert interest into advocacy and loyalty. Furthermore, robust brands deliver clearly defined and dependable experiences interaction after interaction. Customers come to intuitively expect and trust how a beloved brand will make them feel based on cumulative past satisfaction. And nothing erodes hard-won brand equity quicker than inconsistency that breeds consumer confusion and doubt. Without confidence in predicting a brand's performance, people assume the worst rather than giving the benefit of the doubt. Finally, when distinctiveness, relevance and steadfast consistency converge, a brand achieves integrity. This produces resonance with kindred consumers that consolidates loyalty through shared values and priorities. But consistency remains imperative as brands are fragile; they take years to construct but can be instantly undermined by a single misstep. Brand integrity thus requires continuously and scrupulously aligning business behaviors with brand identity across all touchpoints.