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What is Branding? Demystifying Branding Terminology: A Comprehensive Guide

Outline:

  • Introduction
  • What is a Brand, Really?
  • What Should my Logo Accomplish?
  • What is Brand Equity?
  • The Parts and Purpose of a Brand Identity
  • Brand Strategy & Brand Positioning
  • What is Brand Extension?
  • Wrap Up: The Power of Brand Terminology

Introduction

Understanding brand terminology is essential in building and maintaining a successful brand, but often, terms are used interchangeably or incorrectly, leading to confusion. From the foundational elements of brand design to the strategic frameworks of brand equity and brand strategy, each plays a crucial role in shaping the way a company and its customers perceive and interact with brands. In this article, we’ll delve into the key terms and concepts in branding, providing insights to demystify their meanings and significance.

What is a Brand, Really?

“Brand” is possibly the most misunderstood and misused term in the branding lexicon. At its core, a brand is much more than just a logo or a product. A brand encompasses the entirety of a consumer’s perception of a company, product, or service. It’s the emotional connection and associations that people attach to a particular business. A strong brand evokes trust, loyalty, and differentiation in the minds of consumers, ultimately driving purchasing decisions and building long-term relationships. Every brand will change or evolve over time, either actively or passively, as markets and cultures shift. If you take a look at top-performing brands you’ll notice the way they perpetually evolve and grow their brand experience. 

What Should my Logo Accomplish?

While often thought of as being synonymous with a brand, a logo is just one component (albeit an important one) of a brand system. Typically comprised of symbols, typography, and colors, a logo is a central icon identifying a brand. However, it’s essential to remember that a logo alone does not define a brand; it’s the collective experiences and perceptions associated with the brand that truly shape its identity.

Think of a logo as the flag companies fly. A logo is a signifier of the brand, but not necessarily a descriptor. No logo can describe all of the history, values, people, products, ideas, and emotions that make up your brand. An effective logo is recognizable, memorable, uniquely ownable, and over time it becomes a symbol for all of the associations your brand holds in people’s minds. It is both a receptacle for, and conduit of, the equity and value a business builds over its lifespan. Product quality and dependability, design, social media, and customer experience are each used as a way to create that value.

The Nike logo is a great example of a successful branding icon holding tremendous equity. It does not describe every aspect of Nike, from its origins to today—it took an entire book (and movie) to accomplish that objective. But the logo holds a sense of speed, motion, and power that cue ideas of motivation and tenacity. It captures the spirit of athleticism and excellence Nike represents. Paired with expert marketing, customers associate it with performance and principle, innovation and irreverence, creativity and change. 

Functionally, the Swoosh is asymmetrical—an uncommon trait in a logo that catches a viewer’s eye and creates interest and curiosity. The logo has great eyeflow, carrying the consumer gaze from left to right along the Nike logotype. It’s simple, iconic, and easily recognizable at a small size on a sneaker or cast across the side of a high-rise building for marketing.

Pro tip: Think back and you may recall from school that Nike is the Greek goddess of victory, a powerful myth with global familiarity and goodwill. The name holds a wealth of symbolism, conjured in viewers’ minds immediately upon reading the word. A novice approach to designing the Nike logo might be to render a bold representation of the Greek goddess, but what does that accomplish if the vision is already in the mind of the viewer? 

The most impactful branding experiences don’t show a viewer an image of what they just read—they capitalize on those associations and add to them to build on the ideas they communicate. 

What is Brand Equity?

Brand equity refers to the intangible value that a brand holds in the minds of consumers. It encompasses factors including brand awareness, perceived quality, brand loyalty, and other associations tied to the business. Brands with high equity command premium pricing, enjoy customer loyalty, and have the ability to withstand competitive pressures more effectively. Building and maintaining strong equity for your company requires consistent brand messaging, exceptional customer experiences, and ongoing brand management and marketing efforts. 

Brands with strong equity at the time of this article include Patagonia, Google, BMW, and Disney. According to Brandirectory, an international platform for branding analysis, Apple is the world’s most valuable brand. 

The Parts and Purpose of a Brand Identity

Brand identity is a rich system that encompasses the visual, verbal, and experiential elements that convey a brand’s essence to the public. It includes elements such as logos, color palettes, typography, imagery, patterning, messaging, and brand voice. A cohesive brand system ensures consistency across all brand touchpoints, reinforcing brand recognition and fostering a sense of trust and familiarity with customers.

Designing an identity is an opportunity to personify a brand, bring it to life, and establish strong emotional connections with your audience. By creating a unique and distinguishable identity, a company can differentiate itself from its competitors and build a lasting reputation for the business. In addition, a brand system should have consistency across visual and verbal expressions, as well as clarity—a distinction between core, unchanging brand components and branding elements that can evolve with marketing or experience branding.

Brand identity is powerful because it gives entrepreneurs and brand strategists the power to define and construct an authentic image to share with the world. Brands with strong identities are confident—they know who they are, and how to convey it to connect with their audience. In short, a clearly defined brand identity gives companies an edge and an increased chance of long-term success.

Brand Strategy & Brand Positioning

Brand strategy is the overarching plan that guides how a brand will differentiate itself in the market. It’s the foundation for building a brand system and serves to guide marketing, advertising, and communication.

Brand strategy merits a stand-alone article that explores the process, explains its elements, and discusses the research methods and philosophies driving its approach. In a nutshell, developing brand strategy involves defining the brand’s purpose, target audience, positioning, voice, differentiators, and competitive advantage. 

A well-defined brand strategy aligns with the company’s mission and values, charts a trajectory for achieving overall business goals, and provides a roadmap for all brand-related activities, from product development to marketing initiatives. From the merchandise or services you offer to the way employees answer the phone, all aspects of the business should share that unified strategy. To create a brand without one is like sending a ship out into the ocean without a voyage plan.

Similarly, brand positioning deserves a deeper dive as well. Brand positioning shapes the place a brand occupies in the minds of consumers relative to competitors. Effective positioning involves identifying a unique and compelling value proposition that resonates with your target audience and differentiates the brand from competitors. This branding exercise and its result are all about claiming and defending a distinct space in the market and owning it authentically in the minds of customers.

What is Brand Extension?

Brand extension is when a brand capitalizes on its established equity by launching additional products or services under the same brand name in different product categories. The recognition and goodwill of the existing brand can bring trust and credibility to the newly launched product, making it more effective in winning over customers. A successful brand extension lies in its ability to expand the brand’s reach while galvanizing customer loyalty. The approach enables brands to showcase their elasticity and versatility by offering more value to customers.

Example: Yeti

Known originally for rugged campaigns marketing their outdoor sport-inspired super-coolers, Yeti’s first brand extensions were a series of Rambler Tumblers, in 20- and 30-ounce sizes. Both offered an opportunity for fans of the brand to show off their alignment with Yeti’s tough, adventurous spirit for a fraction of the price of their flagship product. It also gave the brand an opportunity to sell multiple products to every member of a family that already owns the Tundra, its signature hard-shell cooler. The launch of the Hopper soft side cooler and the marketing of dozens of additional extensions soon followed. 

Harnessing the power of an established brand’s equity to introduce extended offerings isn’t just about diversification, however. It’s about strategic alignment with consumer desires, expectations, and market trends. Done well, brand extension amplifies a brand’s offering and core message across different categories and SKUs, strengthening its recognition and resonance, and building a more powerful consumer connection. To be successful, the core brand must have enough equity to support fresh extensions and the adaptability to integrate them into their existing suite of offerings without confusing the consumer.

Yeti’s brand extension expertly builds on the space that the brand already owns in consumers’ minds—indestructible gear that keep things cold far longer than the competition—to deliver a new experience within that core concept. Keen marketing elegantly aligned these secondary items with the brand’s core essence.

Brand extensions are not necessarily limited to new products. Brand Line Extensions introduce added flavors, sizes, or varieties of an existing product. This offers the consumer more choice and allows the brand to claim more shelf space and brand presence in the marketplace. Brands routinely extend to offer expanded expertise, services, complementary accessories, or lifestyle extensions. 

Wrap Up: The Power of Brand Terminology

By grasping the nuances of concepts such as brand equity, brand extension, and others, organizations can develop compelling brands that resonate with consumers, drive purchases, and earn recognition and brand affinity. Whether you’re a seasoned marketing pro or a budding entrepreneur, having a solid grasp of key branding terminology will empower you on your journey to find the best brand agency for you, build your business through branding, and grow a brand with sustainable impact.

We hope this outline helps strengthen your understanding of basic branding terms. Do you have more questions? Give us a shout, and let us guide you to find the best fit for your goals. Each week, we donate a free hour of consultation to aspiring brand-builders, so sign up using our contact form!

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