Importance Of Brands

Importance of Brands
Luis A. Torres
Keiser University
Marketing Management
October 7, 2012
Dr. John Fitzgerald

Brand can be described as a name or an image in the mind of a consumer. A company oriented definition of a brand proposed by The American Marketing Association (1960) states that brand is “A name, term, sign, symbol, or design, or a combination of them, intended to identify thegoods or services of one seller or group of sellers and to differentiate them from those of competitors.” It is also one of the most interesting concepts this writer has come across even before I first ventured into the sales and business administration line of work.
During my childhood I was unaware of the concept yet was still able to witness the concept at work and its effects. I rememberother kids making fun of me at the basketball court because my shoes were not brand name shoes. I had seen a label with a name on my shoes and could not understand what they meant until I learned what they meant by “brand name”. Interestingly enough that experience led me to become 12 years old “paper boy” so I could afford a pair of “brand name shoes”. The price difference between the brand nameshoes and the ones my parents could afford was very noticeable but to some extent I started relating the higher price and the name to a higher quality product.
Years later as an adult I have been able to observe the concept at work from a different perspective and the effects do not cease to amaze me. In the ever competitive market place, corporations and individuals intending to sell a productconstantly strive to become and remain the best option or at least one of the most attractive options for consumers if they want to fulfill the goal of maximizing shareholder’s equity. As we have discussed during the course of the past weeks there are many different strategies a firm can adopt with that purpose in mind. As I have been able to observe one of the most effective strategies which mostsuccessful companies share is having a particularly strong brand image. We have seen it at work on products such as automobiles like Mercedes Benz, BMW or Lexus. We have also seen it on soft drinks like Coca Cola, Pepsi Cola, on shoes like Nike. These particular brands of products are usually the consumer’s first choice or at least are perceived as the highest quality product available regardlessof the existence of a similar product at a lower price. We have also seen the brand concept applied on corporations like Apple, Microsoft and many individuals who market themselves as their own brand. We can use as an example an auto technician who goes to a TV show to give advice related to his field of work. His TV appearances might facilitate the perception of his image as an “expert” in thefield giving him an edge over a fellow auto technician who has not had the same amount of media exposure. Consumers would probably expect to pay a higher price for his services than for the lesser known competitor.
When we analyze the above mentioned examples it can be observed how consumers would apparently be willing to overlook the hurdle of a higher price in deciding to purchase the productwith an established brand name instead of the lesser known product. Bello and Holbrook, (1995) state that when a customer is deciding between products or evaluating products with a similar quality level, they would still choose to purchase the brand-name products. Thjømøe (2008) states that this higher price can be considered a premium price. The willingness to pay this premium price by thecustomer could either be explained by the product being actually of superior quality or just by it being considered as some kind of an insurance prime against a defective product or a product that will not live up to the expectations from the unknown company. The recognition of the brand and the perception of higher quality help the consumer feel confident about their decision to purchase the name...