by Paul Lines

Created on: June 09, 2008

Over the past two decades branding and brand management has become an increasingly important part of corporate strategy and one that is deemed to improve the competitive advantage of a firm if it is effectively managed, thus increasing revenue and profitability. In essence therefore, branding can be described as simply another marketing tool that the firm will use to assist in the achievement of its goals and objectives. However, like all other marketing tools, branding adds no value to the business unless it is effective. By providing a brief overview of the concept of branding and its objectives, the intention of this article is to help firms to identify why effective branding is so important in today's commercial environment, whether the firm operates in a national, regional or global market.

The purpose of Brand creation

Although this may seem a little simplistic, perhaps the first question that needs to be addressed is why a brand' is necessary. Most academic agree that branding is needed for product or service identification purposes. For example, if you are operating a restaurant or local grocery store, you might want the brand to indicate that this is what your business offers to the consumer. However, this sort of identification on its own is not sufficient as there will be a number of businesses within your geographical sector offering the same type of business product or service. Therefore identification has to go further and differentiate your business from others offering similar products or services. Indeed in many cases the brand may bear no relationship to the business being conducted by the organisation, but it will form an immediate association in the consumer mind. For example, McDonalds does not mention what the product is but all are aware of what it stands for and the same is true of Mercedes, which equally does not mention the term automobile in its brand description.

Similarly, brand can be either product related, as would be the case with Mercedes mentioned previously where the automobile is the immediate and ultimate image, or company related, as would be the case with Heinz, which has a brand that covers a range of different products.

Brand Objectives

Thus, having created a brand why does it need to be effective? In simple terms, the reason for this is to enable the product, service or business to reach its objectives. For most commercial organisations that objective equates to achieving an increase in market share, which means the brand

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