Importance of Branding in Marketing

The Importance of Branding in the Field of Marketing





            Branding has emerged as a very effective marketing strategy for the products and services on offer by a firm. It makes your service or product unique or distinctive in comparison to what is being offered by the market (Egan 2014). In other words, branding affords your products or services a competitive edge.  A good number of firms have managed to successfully develop a brand that customers can readily recognise, have a positive association with, and have a higher perceived value in comparison with the competition (Dibb & Simkin 2007).  A carefully developed brand creates an emotional, cultural, and visual connection between your firm and customers, service or products, as well as the type of consumers attracted to it. Firms have come to rely on the branding as a market strategy that enables them to differentiate their products and services from those offered by their competitors. The premise of the current essay therefore is to explore the importance of branding in the field of marketing.

Importance of branding in marketing

There are numerous benefits that a company stand to gain by investing in a strong branding strategy. Some of the key branding benefits that a company can hope to realise have been discussed below:

Creates consumer preference

            Investing in a strong brand affords a firm numerous benefits in its marketing efforts. For example, it creates consumer preferences for the various service and/or brand that the brand represents. At the moment, numerous brands have come up with a multitude of choices in various categories of their services and/or products. This in turns leads to uncertainty and confusion among customers. In an effort to move away from these issues, customers tend to move towards those brands that they have come to know and hence trust (Dibb & Simkin 2007). Customers consider well-known brands as being less risky purchases. In addition, such well-known brands affords marketers piece of mind, confident in the knowledge that their performance in the market will be as expected.

Increased revenue and market share

            Branding also generates increased market share and revenue for the company. By purchasing your service or product, customers are in effect experiencing your brand. This in turn persuades them to make a repeat purchase in case the brand meets their expectations (Aaker 2010). The choice by consumers to buy what your firm offers helps to increase the value of your brand. Through this customer loyalty, your firm is able to increase its sales revenue, increase or maintain its market share. More importantly, the firm is better able to penetrate your market. There are numerous ways through which a firm can leverage the power of its brand to its benefit, including venturing into new geographical markets and segments, acquiring new branding or distribution licencing, or even co-branding. This will in turn help to expand the company's market share and also increase its revenues.

Increases the firm's market value

            A firms employees and physical assets while crucial to its daily operations, plays a limited role in as far as its valuation is concerned. The most important thing to consider here is a firm's brand equity.  Brands afford a company a stable asset. All too often, products fail to meet expectations; companies are sold and bought, while technologies undergo constant change. The most important thing that stands firm in all these changes is a strong brand. Brands, therefore, constitutes the most sustainable asset that any firm can ever hope to have. Aligning brands with the overall firm strategy could act as a key principle for its decision making. A good indication of how a strong brand can outlive other assets is the case of the Coca-Cola brand which has been in existence for over 120 years now (Hoston 2011). At the same time, some of the other valued global brands like Apple have been in existence for less than 50 years, even as some corporations do not last more than 25 years.

Affords the firm economic value

            There are two key areas of a firm's value: tangible assets and intangible assets. In this case, brands are categorised under intangible assets.  The findings of a study of the intangible market value of in the S&P 500 conducted by Ocean Tomo, an investment banking firm in 2014 showed that between 1975 and 2003, these firms realised a 17%-80% increase in their overall corporate value of intangible assets (Stathis 2015).  For example, the Coca-Cola brand name accounts for more than half (54%) of the organisation's stock market value with an estimated worth of $ 67 million. The Red Cross, though a non-profit organisations, manages to attract a lot of volunteers and donations solely because of the power of its brand. Brands, on account of their financial impact, are in effect a true asset to the organisation. Brands are a key determining factor in the ability of a firm to attract partners and employees to an organisation. Besides helping to create awareness for organisations, brands also enable firms to develop mutual relationships with suppliers, customers, and the public. 

Brands offer an organisation a competitive advantage

         Both for-profit and non-profit firms have to compete for funding, resources, audience attention, and talent. To become winners in either of these two categories, organisations need to develop and execute a strategy that delineates definite measures and actions required to realise their goals and outdo the competition for necessary resources. A properly executed branding strategy reflects a firm's strategic plan, and hence aids in promoting strategic initiatives and areas that will help propel the firm forward (Aaker 2010). Successful brands thus enable organisations to sustain relationships with their consumers. In addition, brands protect the business from market uncertainties and turbulence and in this way, afford the business sustainable competitive advantage.  A strong brand is the best tool to fend off competition. When your customers are ready and willing to offer a premium price for your services or products, it speaks volumes of the competitive advantage that you have over the competition. The ability of customer to also try out new products by your firm solely based on the fact that they bear your logo is yet another clear indication of the strength of your brand and the edge that you have over other players in the market. 

Setting Expectations

            Ours is a world of promises. Restaurants promise their customers fresh and appetising food prepared in a clean environment. An airline flight engineer also promises to undertake a thorough job in ensuring that the aircraft is safe for take off. While certain legal requirements bind these professionals to ensure that they fulfil their promises, however, such vows and promises are often maintained on the basis of an individual's ethical and moral code. It is almost an unspoken commitment to deliver what we promise. Similar agreements also exist with companies, services and products. An organisation, through its brand, makes certain promises to its consumers. In this case, the brand promise informs your audiences who you are, the unique value that you seek to deliver, and what you stand for or believe in (Fatteross 206). In this case, an organisation's failure or success hinges on its ability to deliver on promises made.  In case a company breaks its promises, its reputation comes under scrutiny and consequently, the brand suffers.  On the other hand, companies that manage to keep promises made to their audience win over their affection and loyalty. 

Enables a company to attract new distributors

            A renowned brand characterised by proven consumer loyalty does not struggle to identify distribution partners, be they local or international (Egan 2014). As a matter of fact, every distributor would want to be identified with a highly sought-after brand, and one that affords them a high turnover.

Affords the firm a higher negotiating power with suppliers

Suppliers seek to be associated with proven brands as this is likely to enhance their portfolio. With a strong brand, a company will always have the upper hand in negotiating for higher concessions with its suppliers (Egan2014). In the process, the company end up saving on costs that it would have incurred in scouting for a good supplier if its brand was not so strong. 

Reduces employee turnover

            Strong brands are not just appealing to suppliers and customers, but also to a company's employees. They afford them a sense of direction and purposes as they seek to be identified with it. As a result, it becomes increasingly easier for them to market the products because they are attached to and have a strong conviction in its offering (Dibb & Simkin 2007). In this way, strong brands build strong customer loyalty to the products or services that a company have to offer to the market.


            While branding constitutes a firm's intangible assets, it is nonetheless, one of the most influential assets to it.   As the most constant asset, a brand enables the company to increase its market value, realise an increased market share and sales revenue. A strong brand further affords a company a competitive advantage over its competitors. It also enables a firm's to set higher market expectations, enjoy a higher negotiating power with suppliers, and retain employees.




Reference List

Aaker, DA (2010), Brand Relevance: Making Competitors Irrelevant, New York: John Wiley & Sons.

Dibb, S & Simkin, L (2007), Marketing Briefs, London: Routledge.

Egan, J (2014), Marketing Communications, London: Sage.

Fatteross, J (2016). Advantages of Strong Brand Equity. [online]. Available at:

(Accessed 22 August 2016)

Holston, D (2011), The Strategic Designers: Tools & Techniques for Managing the Design Process, HOW Books.

Stathis, KL (2015). Ocean Tomo Releases 2015 Annual Study of Intangible Asset Market Value. [online]. Available at:

(Accessed 22 August 2016)






$ 10 .00