Branding and Brand Equity in Business Marketing

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  • 0:05 What is a Brand?
  • 2:00 Where Branding Starts
  • 4:33 Brand Equity
  • 6:30 Lesson Summary
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Lesson Transcript
Instructor: Rob Wengrzyn
Brand and brand equity go hand-in-hand in the marketing arena. Here, we will discuss how a brand develops and how that leads to increased brand equity.

What Is a Brand?

Examples of highly recognizable brands
Brand Logos

Lexus, Coke, McDonalds, Nike - what do all these companies have in common? They all have very strong brands where the mere mention of their name or the sight of their logo enables you to identify with their product, quality and overall message. If someone sees the Nike swoosh, they immediately know it is Nike and know the quality behind that logo or image.

You see, a brand is the name, term, design, symbol or any other feature that identifies your product, goods or service as different from those of other products or companies in the market. As a brand begins to build or become more recognizable by more and more people, we begin to build brand equity - that is to say, value in the brand. So you see, branding and brand equity are a huge part of the long-term marketing strategy of a company.

Many people get confused about the differences between brand, brand message and brand equity. So, let's make sure we discuss the specific definitions of each of these before we move on.

  • Brand is the name, term, design, symbol or any other feature that identifies your products, goods or service as different from those of other products or companies in the market. The word 'brand' is all-encompassing when used in marketing terms.
  • Brand message provides the words or terms that help customers and prospects understand why they should use the product and the company values, or what the company believes in. So, brand messaging is the terminology used in marketing to help customers understand use and values.
  • Brand equity is the commercial value that can be put on a brand. As we talked about earlier, this increases as a company gains more recognition. How much do you think a company would pay for the Lexus brand?

Where Branding Starts

In order for any company to develop a brand, there are several steps they must go through. The steps are focused on helping you think about your company, its value to the customer and the image it wants to represent. For example, McDonalds is not trying to portray an image of a high-end steakhouse. Rather, their image is designed to be an affordable, quick and inexpensive place to eat, and their brand (and brand message) supports that. It is easy to see how they thought about what their company was and what they wanted it to be, and that shaped their brand and brand message.

So, before a brand can indeed become a brand, there are steps you will need to take:

  • Assemble items like advertising you've done, magazine articles you might have been featured in, your mission statement and even your strategic plan. In marketing, we call these 'who we are' documents. These documents will help you to gather information on who you are now and what, if any, advertising you've been doing.
  • Answer any key questions that you believe these documents missed or did not address.
  • Find out what stakeholders think about you. Stakeholders are people that have an interest in the company being successful and can include employees, creditors, vendors and even customers. For this step, do not be afraid to ask hard questions about what these stakeholders think you are as a company.
  • Know where you stand in comparison to your competitors. If you know where they stand and how they present themselves to their customers, you can begin to understand how they position themselves and how you should position yourself, which is called 'thought branding.'
  • Brainstorm and open up your mind. Challenge individuals to think about words, colors, shapes and anything else that could represent your company.
  • All the work you've done so far is so you can develop an identifying logo and potential slogan for your company. You cannot take this step until you know who you are (or who you think you are), since the logo and slogan (also called a tagline) need to support the work you have done and what your company is.
  • Develop a brand strategy. This will include guidelines for what you will and will not do in relation to your brand and how the specific mark is represented.
  • Identify with and do not stray from your brand strategy in everything you do. When having a corporate function, recruiting or anything else the company does, the brand has to be upheld because it represents the image of the company.

What Builds Brand Equity

All the work you did to develop your brand will also help build its equity. You see, the brand really is what the company is all about, and if you support that brand in everything you do, and the brand becomes more recognizable, you're building equity.

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