What is Brand Identity?


What is Brand Identity?

A brand is not just a label, tag, slogan or other identifying characteristic that identifies one vendor’s product or service as different from the goods or services of other vendors. Branding in the context of an organization refers to the identification, recognition and public awareness of a certain firm or entity by a third-party or by the general public. A well-established brand is perceived by consumers as a credible and reliable source. Consumers base their decisions on their familiarity and perception of the products and services offered by a given brand.

Just like any logo, brand name becomes an integral part of the business identity and representation. In fact, a brand name is so important that it forms a critical part of a company’s marketing strategy, which is often referred to as brand strategy. In essence, branding establishes a company’s reputation in the market as the leader or the most trusted name in a particular market segment. The level of brand equity or perceived credibility of a certain firm is determined by a number of factors, such as the nature and quality of its products and services, its marketing strategy and consumer awareness of its brands.

Most firms agree that they should not rely solely on advertising as their way of reaching out to consumers. Advertising may be a very effective strategy but it does not have a long-term effect on brand loyalty or recall. It is also believed that consumers develop brand preferences after repeated exposure to specific brands. On the other hand, research has shown that consumers tend to become more brand-specific after exposure to one brand name.

Brand equity or perceived brand equity has become an important marketing management tool for top-line companies in order to gain competitive advantage. Building brand equity has helped companies strengthen their competitive position and achieve higher sales. Brand equity is also useful in helping businesses gain new customers. However, brand equity can have a negative impact if it is not managed effectively. There are four main ways in which this equity can be managed:

Effective branding strategy: For successful branding, there must be a consistent message, logo, color scheme and package design. This will create a positive visual image of the brand and help consumers to associate it with an object, service or a concept. A unique selling proposition (USP) also helps to build consumer awareness. Once brand equity is achieved, companies can enhance their visibility by creating favorable associations with other companies, products or services. Apart from marketing, branding is an effective method of building credibility with customers.

Consumers generally respond better to companies that offer them something free or at a lower cost. Freebies or low-cost solutions are more favored than branding. E.g. free promotional pens are more effective than creating TV commercials or promoting via magazine ads.