Definition of a brand
A brand can be defined as a name, sign, logo, or design of a product/ service or a firm designed to identify ownership and to differentiate the offering in the marketplace.
What are brand elements?
Most products and/or firms will have some sort of brand identity materials. The elements of a brand may include:
- a brand name
- a logo
- certain colors
- shapes, symbols, patterns, signs, images
- perhaps a tagline or slogan
An example of brand elements
Let’s use McDonald’s as an example. Their brand elements consist of; the name “McDonald’s”, their logo, the golden arches in their logo, and so on.
Brand elements do not need to reside in the logo or signage of the company only. Coca-Cola is often recognizable by shape of its bottle, as are certain alcoholic drinks. Packaging design may also help communicate the brand identity.
Any new product or company entering the market will usually have brand elements in place. At this time, a new entrant typically has very little/no brand equity (which is discussed below).
What is brand equity?
As you can see above, the brand itself is just a collection of names, words, colors, signs and symbols/images. However brand equity is an important aspect in present day marketing success.
In order for a brand to have some level of brand equity, some knowledge and understanding and even likability needs to pass to the consumers in the target market.
Therefore brand equity can be defined as the value of the brand generated from awareness, understanding, perceptions, and loyalty of consumers in the marketplace.
As a brand has higher awareness, clearer positioning and greater customer following – then the brand should win a greater level of sales and ongoing consumer loyalty.
Difference between brand elements and brand equity
Brand elements are simply the design and look an image associated with the brand. It is a physical and visual look.
Compare this to brand equity itself, which resides in the minds of the consumers in the marketplace. It is the target markets understanding and perception of the brand – typically measured through awareness, positioning, likability, preference and loyalty.
What constitutes high brand equity?
A firm with high brand equity should score well on particular brand awareness metrics as well as being clearly positioned.
However, the key test of brand equity is whether it delivers a competitive advantage in the marketplace – typically measured by a higher market share, the ability to charge a price premium, and a stronger customer loyalty, as well as a greater acceptance of new products by the target market.
Steps in the branding process
When developing a new product the first decision is whether or not to brand the product –if so, then the next decision will be the brand name, logo design, look/image, colors and potentially a tagline. Please refer to the separate article on the main branding decisions.