brand (marketing)

Producers have been marking their goods for millennia—there are stones, for example, from ancient Egypt marked with a symbol of the quarry they hail from that are 6,000 years old and Chinese pottery marked to indicate the potter who made it that are from 4,000 to 5,000 years old. The use of brand names to denote manufacturers became widespread in Europe in the late Middle Ages. Such branding soon became legally mandated. In 1266 the English Parliament enacted a law requiring bakers to mark loaves of bread made for sale, and, in the centuries that followed, European courts developed a body of law protecting the rights of producers to own their names and marks. 

With the rise of industrial-scale manufacturing and the widespread geographical distribution of products, reliable identification of goods became increasingly important, as consumers no longer purchased directly from local producers. By the late 19th century, manufacturers of all kinds were using stylized text, logos, and colour schemes not just to identify their goods but to distinguish them in a crowded marketplace through promises of superior quality or value. Advertising agencies also emerged, notably J. Walter Thompson Co., which pioneered early techniques of using magazine advertisements to connect products with generalized associations such as the longing for luxury, security, or love. Coca-Cola, Ivory Soap, and Colgate all emerged as brands during this period with the support of extensive advertising campaigns. 

The reach and evocative power of mass media, such as radio and especially television, facilitated the modern era of branding. Manufacturers, led by American consumer packaged goods companies, began investing heavily in advertising, not just to raise awareness of their brands but to build specific emotional associations with their products. Brand management thus became an organizational concept. Procter & Gamble Company was a pioneer in such brand management, rejecting the notion of a single corporate marketing department and instead putting each of its branded products (e.g., Ivory, Tide, Crest, Crisco) under a separate management team, responsible for identifying a specific consumer segment and building a brand to appeal to that specific kind of buyer. By the 1950s, this strategy had become the standard marketing model in consumer-goods companies.

The overall strategy for success at that time was rather simple: drive down costs using mass production, invest the savings in mass media ad campaigns that imbued the brands with emotional resonance, and then make a profit by charging prices for the branded product that were higher than those charged by generic producers or those with weaker brands—prices that consumers would gladly pay because they valued the emotional connection they had with the stronger brand. The latter half of the 20th century was a period of increased sophistication, investment, and profitability in brand-based marketing. Marketers refined their message based on focus groups, consumer surveys, and data collected through retailers, and they expanded their reach through event sponsorships (such as the Super Bowl) and film and television product placement. Additionally, they owned and operated brand-specific retail stores.

The rise of the Internet, however, profoundly challenged the branding models of the 20th century. The controlled one-way messaging strategy so effective in mass media did not always translate well to the interactive online environment. Leading brands spent millions of dollars on “brochureware” websites (websites that simply listed their products and services online, akin to listing their products in a static brochure) that sparked limited consumer interest. Meanwhile, the disruptive effect of the new marketing channel allowed new brands to emerge as well as new types of intermediaries between product manufacturers and consumers, including review websites, pricing agents, and search engines. Consumers grew less reliant on the brands themselves to signal quality or value.

Brand managers use an array of tactics to organize complex brand architectures, but, broadly speaking, companies follow either a “branded house” or a “house of brands’’ approach. Apple operates mainly as a branded house, with nearly all of its products prominently identified with the “Apple” brand. Individual Apple products are distinguished through product brands (e.g., iPhone, AirPods) but the Apple name, visual style, and language are present in all communications. Consumer packaged-goods companies, on the other hand, typically prefer the house of brands, multiple-branding strategy, as seen with Procter & Gamble (Crest, Gillette, Tide) and Colgate-Palmolive (Softsoap, Tom’s of Maine, Ajax). Variations are common, although companies typically keep brands separate when they convey distinct and even conflicting associations (such as brands for toothpaste and dishwasher detergent) but link them together when their various products benefit from common values (as with digital products like mobile phones and laptops).

For each individual brand within the marketing architecture, brand managers decide how closely to connect them with one another and with the larger corporate brand. Various terms are sometimes used, not necessarily consistently across companies, to denote these relationships. Managers might refer to a brand that is closely linked to its parent as a “sub-brand” (for example, FedEx Ground and FedEx Office), whereas a brand with a more subtle connection might be termed an “endorsed brand” (Courtyard by Marriott). “Ingredient” brands can even operate within another company’s architecture. Intel’s “Intel Inside” campaign helped the company maintain dominance in personal computer chips for decades by adding their product and the Intel branding to goods produced by other companies, such as Dell, Acer, and Lenovo. These marketing approaches are fluid and situational, and most multibrand companies today employ a range of tactics.

There are also assorted powerful branding tools. The use of sound, for example, has evolved from classic advertising “jingles” (e.g., “The best part of waking up is Folgers in your cup” for Folgers Coffee) to signature sounds, such as HBO’s “static angel” intro, Netflix’s “ta-dum,” or Intel’s five-note “bong.” A signature colour can also be powerful, because of how widely it can be used—at the point of sale, for product extensions, and in advertising—once the colour is established in the minds of consumers. Examples include Tiffany’s turquoise blue, T-Mobile’s pink, and Home Depot’s orange.

For most brands, though, the primary means of building awareness and associations are through advertising, still a multibillion-dollar industry. In this classic marketing approach, the brand is advertised in a scene or narrative intended to evoke the desired associations. AT&T, for example, has for decades promoted the power of a phone call to bridge the geographical divide, keeping families and loved ones connected. But advertising has progressed beyond obvious commercials, as companies seek to reach consumers in more subtle ways, such as through product placement in films and television programs, affiliation with celebrities and “influencers” (either by using them as spokespersons or by sponsoring their events), and association with admired causes (such as environmentalism or disaster relief). These tactics can generate much greater returns than traditional advertising—in 1982, for example, Hershey paid $1 million to feature a new candy, Reese’s Pieces, in the film E.T. the Extra-Terrestrial and enjoyed a 65 percent increase in sales and a lasting association with a beloved movie character. Today, there are entire advertising agencies devoted to linking brands with movies, social media personalities, and special events.

Sponsorship branding, where a brand is tied to an athlete or entertainer or special occasion or cause, is another popular means of building associations, though this marketing method is fraught with risk. Michael Jordan’s longtime partnership with Nike, for example, has made both parties billions of dollars. On the other hand, Adidas’s lucrative partnership with entertainer Kanye West backfired after he made a series of anti-Semitic remarks, leading the company to cut ties with him in 2022 at an immediate cost to the corporation of some $250 million and the risk of much greater long-term damage to the brand. Social or political associations can similarly be treacherous for brands. In 2023, both Bud Light and Target received backlash and calls for boycotts of their brands after the former engaged a transgender influencer for a promotion of its beer and the latter marketed trans-friendly merchandise during Pride Month. 

Brand-building is not limited to external promotional communications. Brand managers seek to align all aspects of the company and the product with the brand and vice versa. Nike, for example, encourages its employees to pursue athletic hobbies, while Walmart promotes frugality with spartan corporate offices. Branding can even mean deliberately selling less of the product, a classic supply-and-demand tactic known as “scarcity marketing.” Clothing retailer Supreme built its brand on the back of its retail “drops,” new products introduced in limited supply at its own retail locations, which attract long lines in highly visible urban neighborhoods, building associations of exclusivity for the company.

Although brands and branding evolved as a tool for marketing consumer products, brands are relevant in a variety of contexts. Brands can be valuable in business-to-business transactions, where managers often prefer to do business with established brands as a way of protecting themselves and limiting risk. For decades, “nobody ever got fired for buying IBM” was a widely used expression, reflecting the associations of reliability and quality that the IBM brand, known as “Big Blue,” had earned in corporate boardrooms. Similarly, consulting firms like McKinsey & Company and Boston Consulting Group implicitly promise their clients, as part of their brand appeal, a “seal of approval.” Managers advocating for a risky corporate venture frequently hire one of these firms to develop the strategy and add their brand strength to the proposal so that it carries more weight with corporate leadership.

Less commercial organizations also rely on and invest in their brands. Young people spend years studying to be accepted at universities and then spend years paying off related debt, all for the lifelong right to associate themselves with brands like Harvard, Yale, Princeton, Cambridge, and Oxford. Modern universities employ many of the same tactics as shoe manufacturers and hamburger chains to enhance and protect their brands. Governments, political parties, artists, and charitable organizations are all active stewards of their brands, and some have developed sophisticated brand systems. Donald Trump’s bright red “Make America Great Again” hats, Livestrong’s yellow bracelets, and the Salvation Army’s red kettle are all iconic brand symbols intended to spur a host of non-commercial associations, from patriotism and political engagement to philanthropy and compassion.

Strong brands can even turn consumers into brand ambassadors. A popular metric for measuring brand strength is the Net Promoter Score (NPS), which relies on a single question: “How likely are you to recommend this product to someone else?” A brand that people are proud to be associated with is one that people are more likely to recommend and promote, for example, through social media.