By Matija Šerić
Various authors often have different understandings of the concept of a brand (or trademark), but they are generally on the same page. Most agree that a brand consists of a sign, name, and other important elements and activities that producers attribute to an idea, service, or product in order to highlight their overall uniqueness and distinguish them from competitors. Elements of a brand, such as a symbol or sign, are associated with the features and benefits of a product.
The American Marketing Association (AMA) defines a brand as “a name, term, design, symbol, or any other feature that identifies one seller’s goods or services as distinct from those of other sellers.” Although this definition is well-known and widely accepted, it focuses more on the tangible rather than the intangible features of a brand. As the years have passed and the market has become increasingly dynamic and unpredictable, the importance of a brand’s intangible values has been recognized, and this has been reflected in various alternative definitions.
Definition
In 2000, Wood defined a brand as “the sum of all mental associations people have with environmental stimuli.” Numerous definitions, such as those by McDonald and De Chernatony in 2005, point to the additional value a brand possesses compared to unbranded products or services, such as generic goods. Authors Slater and Jones (2003) claim that a brand is “a product that provides functional benefits and additional value that customers voluntarily assess and are willing and/or able to buy or pay for.” Brand characteristics can be defined as: functionality, uniqueness, added value promises, and a balance between rational and emotional reasons for trusting a brand.
Purpose
According to authors such as Simkin, Dibb, and Ferrell (1995), a brand consists of three crucial elements: slogan, name, and symbol. A brand can be used to label one or more products or services, a product line, or all products of a company. A brand simplifies the purchasing decision and guarantees a certain level of quality to the customer. Overall, when everything is considered, a brand represents a combination of different factors that enhance the product and give it unique value and enormous significance on the market. Over time, the brand becomes a company’s most valuable asset—something that cannot simply be bought but must be created. Besides the term “brand,” the term “trademark” is also frequently used in both literature and practice. Brand and trademark are synonyms, with “trademark” often used as a Croatian equivalent. It can thus be concluded that a brand, or trademark, is a designation intended to highlight specific products or services among competing ones. The essential components of a brand are: identity, value, recognizability, and brand awareness.
Historical Development
The brand has a long history. Experts believe that the first examples of branding date back to antiquity and became especially prominent after the discovery of sea routes to the Americas, Asia, and Africa from the 15th century onwards. The oldest known brands include Greek olive oil, Indian spices, Chinese tea, and Roman roads. The word “brand” most likely derives from the Norwegian word brandr, meaning “to burn.” The term was used for marking livestock with a hot iron so they could be more clearly identified in the market. Modern branding emerged after the Industrial Revolution in the 19th century and especially during the 20th century, particularly after World War II with the rise of mass media.
In 1843, Volney Palmer opened the first advertising agency in Philadelphia. Initially, it focused on leasing ad space in newspapers, but at the beginning of the 20th century, it began producing more concrete advertisements. These were simple ads and did not yet represent branding in the modern sense, which involves associating emotions with a product rather than just advertising its performance. Shopping became a trend after 1945, and the economic power of people in the West continued to grow. The number of products and buyers increased. This led to the rise of marketing agencies that became intermediaries on the market.
How International Brands Won Over America
Modern Times
Branding truly began when the American market became saturated with identical or very similar products. Branding emerged as an imperative and a means of product differentiation to boost sales. Mass media in the U.S. and Western Europe rapidly developed just before, and especially after, World War II. In the U.S., brand development was focused more on television than radio or print, with TV gaining increasing importance in American life as early as the 1930s and 1940s. The so-called “Chicago School of Marketing” developed under the leadership of Leo Burnett. For product sales, developing a good image was key. Needless to say, over several decades, the brand has evolved in step with other changes. This was particularly evident after the end of the Cold War and the fall of the Berlin Wall in 1989, when capitalism entered the former Eastern Bloc. The development of computers, mobile phones, the internet, smartphones, tablets, and other modern communication tools has further driven brand evolution and adaptation to the times.
The Relationship Between Brand and Consumer
In today’s competitive market, consumers form a special and important relationship with a brand rather than with an anonymous or lesser-known product. In their efforts to succeed in the marketplace, companies must create a brand that is more attractive than the competition, opens up new markets, and creates new value for consumers. In the world of commerce and sales, large multinational companies dominate, possessing a well-established reputation and brand. A brand is powerful because it sells products to consumers who perceive them as superior to competitors’. Customer loyalty to a brand results in higher sales, significant profit, and new development opportunities for the corporation. In addition to established brands, new companies are also finding their place in the market precisely because their brand offers something new and inspires enthusiasm and the desire to buy among end consumers.
To successfully develop and place their brand on the market, companies must create a marketing structure where the consumer holds a central role. Modern marketing concepts build a connection with consumers, which is why marketing in the new era is placed at the center of business and business strategies. Since the company-consumer connection is created through branding, branding lies at the heart of marketing activities. For this system to be effective and efficient, it is necessary to design and implement a process that leads to the desired outcome, understand all stages of the process, introduce teamwork, and incorporate all other activities specific to a consumer-oriented organization. A brand must fulfill the needs and desires of consumers.
Featured image: Unsplash
