Keller and Lehmann (2006) define brands from the point of view of their key functions and levels of impact. Thus the function of brands is to serve as markers or identifiers for a company’s offerings, to simplify consumer choice, to reduce consumer risk and to build trust.

Brands are constructed starting with the core product, proceeding through the type and level of marketing activity undertaken to promote the product and, finally, to the consumer response to this marketing activity, as expressed by consumer purchasing behaviour. The impact of brands therefore occurs at three distinct levels: the core product or service, the consumer and the organization. The benefits accrued at each of these levels build the value of the brand, which is referred to as ‘brand equity’. For example, with a can of Coca Cola®, benefits are accrued as follows:

• The product itself – is of good quality and consumers generally like the taste, which remains consistently pleasant and refreshing. Regular consumers of Coca Cola® can therefore rely on this quality and do not risk disappointment.

• The consumer – responds favourably to advertising, chooses this brand in preference to any other and is generally loyal to it.

• The organization – knows the consumer, matches the advertising and marketing campaigns with consumer preferences and needs and creates favourable impressions associated with the product (outdoor, sunshine, friendship, for everyone).

With successful brands, such as Coca Cola®, the benefits accrue not just to the organization that owns the brand but also to the consumer, and it is this mutual benefit that builds the value of the brand. Therefore, brands have also been described as ‘intangible assets’ that bring financial benefits to their owners and psychological rewards to consumers. Buying branded products is seen to bring additional benefits in the form of status, prestige or security, which unbranded products do not (Berthon et al., 1999).

Pringle and Gordon (2001) provide a succinct definition of a brand as representing ‘promises’ about what one can expect from a product. According to the authors, brands combine both functional and rational attributes, as well as emotional and psychological imagery. The functional and rational attributes concern the product itself – the tangible features and functions that deliver value to the customer and which are unique. Emotions are evoked by the tone, style and imagery of the marketing communications promoting the product.

A number of associated concepts have emerged, which describe additional dimensions of branding and which serve to underline its complexity. Three key concepts are brand identity, brand values and brand equity.

Brand identity

Aaker (1996) defines brand identity as the combined effect of all of the external, visible features of a brand which are perceived by consumers, hopefully in the exact way that is intended by the organization which created it. In order to create brands, organizations first develop a ‘vision’ of what they want their brands to stand for and represent. In other words, they must create a brand’s unique identity. Brand identity combines within it the organization’s own values and beliefs, as well as the interests and needs of its customers. Brand identity is therefore an aggregation of what the organization represents and the expectations of its customers and is built upon an ongoing relationship with customers. Key aspects of brand identity, therefore, are the unique symbols, logos, phrases, tunes or trademarks that are used to represent the brand and which customers instantly recognize and associate with it. Examples of brands which have created their own unique identities are Nike, the Body Shop and McDonalds, where the products sold reflect company values and closely match the needs, lifestyles or aspirations of consumers.

Brand values

Successful brands are underpinned by a consistent set of brand values. These are the beliefs, aspirations and attitudes that describe and define the brand and differentiate it from others. Clearly identifiable brand values are an extension of the internal values of an organization, which enable the people working within it to understand how they should behave. This is particularly relevant to services, because by espousing the company’s values employees are more likely to reflect these in their interactions with customers. If brand values are to be sustained, however, they must be delivered consistently, both internally and externally. For example, an organization that claims to value quality must ensure that this is delivered throughout its entire operation – in its premises, advertising, staff training and conduct, and in the quality of customer care (Jobber, 2001). The concept of brand values reflects the key principle that for a brand to be successful the values that it represents must be those of the organization itself and must underpin the functioning of that organization. Figure 8.1, which shows an adaptation of Davidson’s (1997) ‘branding iceberg’, illustrates this principle. Davidson’s original diagram has been adapted for the purposes of this chapter to show its relevance to services as well as products.

Figure 8.1 • The services branding ‘iceberg’ Reproduced with permission from Davidson H. Even More Offensive Marketing, London, Penguin Books Ltd.; 1997.

According to Davidson (1997), what the customer sees and experiences is only the tip of the brand iceberg, which must be effectively underpinned by internal processes, communications and ways of working, which the customer does not see, but which must fully support the brand. Unsuccessful brands fail often because of internal inconsistencies, or because the promises that are made are not fulfilled. Berthon et al. (1999) argue that only strong and genuine brands will survive, because customers are now much more sophisticated and cannot be so easily persuaded. Customers have access through the Internet to considerably more information about brands than was previously available, enjoy greater purchasing power and are, consequently, much less loyal to brands than they used to be.

Brand equity

Feldwick (1996), as cited by Wood (2000), offers several different meanings for the concept of brand equity:

• Brand equity is the total value of a brand as an asset when it is sold or included in a company’s balance sheet.

• It is a measure of the strength of consumers’ attachment to a brand – also known as brand loyalty.

• It is the totality of the associations and beliefs consumers have about a brand – also known as brand image.

Wood (2000) argues that there is a causal link between these three definitions, which she labels the ‘brand equity chain’. Brand identity is created to fit the needs of the target market. If this is done effectively, the strength of the brand increases through growing customer loyalty. This, in turn, determines the financial value of the brand, which, if substantial, brings competitive advantage to the brand owner.

The conclusions that can be drawn from the foregoing are that for specific products or services to become brands and to be perceived by consumers as such, they must meet a number of key criteria: