Importance and Reasons for Branding

In developing a marketing strategy for individual products, the seller has to confront the branding decision. Branding is a major issue in product strategy. 

For instance, developing a branded product requires a great deal of long-term investment spending, especially for advertising, promotion, and packaging. 

Many brand-oriented companies subcontract manufacturing to other companies. For example, Taiwanese Manufacturers make a large amount of the world’s clothing, consumer electronics, and computers, but not under Taiwanese brand names.

Besides, some manufacturers observe that market power lies with the brand name companies. Even when these companies can no longer afford to manufacture their products in their homeland, the brand names continue to command customer loyalty.

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Top brand names have consumer franchises that command strong consumer loyalty. A sufficient number of customers demand these brands and refuse substitutes, even if the replacements are offered at lower prices.

These companies invest heavily to create strong national or even global recognition and preference for their brand names. Below are brand names and their implications for marketing products and services.


A crucial step in the branding strategy is deciding on a specific brand name for the product. In earlier times, when the concept and practice of branding were less developed, the family name or surname was used. 

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Some of those are still very much alive, for example, Siemens or Ford. The other method of branding was by way of addressing the product range of the company. Two famous examples are General Motors and General Electric. 

It seems the function that brands were supposed to perform was to indicate the source of the product (family name) or pinpoint the product range. 

However, a brand name has emerged as one of the main elements of the merchandising function in recent times and will become more and more crucial as the competition becomes more severe in Nigeria and other parts of the world. Let us examine the conceptual meaning of the terms brand and brand name.

What Is a Brand?

The distinctive skill of professional marketers is their ability to create, maintain, protect, and enhance brands. Marketers say that branding is the art and cornerstone of marketing.

A brand is a word, mark, symbol, or device, used to identify some product or service. The definition clearly focuses on the function of a brand, that is, to identify, irrespective of the specific means employed for the identification.

Akanbi (2002) reports that ‘brand is the name, term, symbol, or design or a combination of these which is employed to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

The American Marketing Association defines a brand as a name, term, sign, symbol, design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

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What Is a Brand Name?

As we have just seen, the American Marketing Association defines it thus:

A brand name is a part of a brand consisting of a word, letter, group of words, or letters comprising a name which is to identify the goods or services of a seller or a group of sellers and differentiates them from those of competitors.

A brand name is only one of the means that the brand can use for identification. Examples of brand names are Toyota, Honda, Mercedes, Mobil, Shell, Lux, and Omo.

A Brand Mark  

A brand mark is a part of the brand in the form of a symbol, design, or distinctive coloring or lettering. Examples include: ‘the Lion’ for Peugeot cars, the ‘Star’ for Mercedes Benz cars, and a ‘Stallion’ for Union Bank of Nigeria Plc.

A Trademark 

Trademark is a brand that is given legal protection for the exclusive use of a particular company. Trademarks are brands, but not all brands are legally protected. Hence, any mark that is not legally protected is not a trademark.

The American Marketing Association defines a trademark as a brand given legal protection because, under the law, it has been claimed by one seller. Thus, the trademark is essentially a legal term. 

All trademarks are brands and thus include words, letters, or numbers that can be pronounced. They also have a brand mark. Some people erroneously believe that the trademark is only the pictorial part of the brand.

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Importance of Branding

The importance of branding is as follows:

  • Brands make it easy for consumers to identify products or services.
  • Brands also assure purchasers that they are getting comparable quality when they reorder. For sellers, brands are something that can be advertised, and that will be recognized when displayed on shelves in a store.
  • Brands also help sellers to control their share of the market, because buyers will not confuse one product with another.
  • Branding reduces price comparisons because it is hard to compare prices on two items with different brands.

For sellers, branding can add a measure of prestige to otherwise ordinary commodities, such as Gulder, Star, Coca-Cola, Mercedes’ products, Sony’s products, etc.

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Reasons for Branding

There are various reasons why a company may wish to adopt a brand name or trademark. Some of these include the following:

  • Branding enables a company to differentiate its product. It gives the marketer a different product to promote. Each market segment will have a specific version of the same product from the company.
  • Brands help to ascertain who the producer of the product is. A company’s name is built around the brand name which can be used to stimulate the sales of the product.
  • Branding enables a company to control the distribution and the price of its product because of its distinct nature.
  • The promotion of a brand will help the company to increase its market share in the country. It helps to build loyalty for the product and increase repeat purchases.
  • Branding can aid a marketer to increase his product lines. The qualities associated with an established line can be exploited to reflect on a new product marketed under the same brand name.

Reasons For Not Branding

Some of the reasons for not branding include the following:

Many firms do not brand their products because they are unable or unwilling to assume the two major responsibilities inherent in brand ownership: 

  • To promote the brand.
  • To maintain a consistent quality of output.

Some items are not branded because of the difficulties of differentiating the products of one firm from those of another. 

For example, clothes pins, nails, and industrial raw materials (coal, cotton, and wheat) are examples of goods for which product differentiation is generally unknown. In addition, the physical nature of some items, such as fresh fruits and vegetables, may discourage branding (although, these days, they are packaged in tins/cans).

Producers frequently do not brand that part of their product (output) that is below their regular quality. Products graded as ‘seconds’ or ‘imperfects’ are sold at a reduced price and are often distributed through channels different from those used for regular quality goods.

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