The Concept of Brand Identity: Internal Perspective

Introduction

Brands are considered to be intangible assets that can be used in order to create shareholder value (Deagon, 2002). The market value of a company depends on its brand for the most part, but other intangible assets could also add substantial value in this regard (Fombrun, 1996). Brand equity concept finds its roots in these added values. Brands help the firms face the challenges of a highly competitive marketplace by keeping the customer acceptance at a satisfying level.

Brand equity can:

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  Assist the company in a new product launch phase or carve the way out for licensing

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  Offset a decline in market share during price and promotional wars (Kamakuran & Russell, 1991)

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  Help provide resistance against competitors’ attacks (Aaker, 1991)

From the consumers’ perspectives, brands provide a visible representation of the difference between products. Brands allow consumers to shop with confidence in an increasingly complex world. A brand can signify product quality as well as aid consumers in differentiating the product from competitive offerings (Aaker, 1991). A brand that consumers trust will also serve to reduce perceived risk and post purchase cognitive dissonance.

Brands are perceived differently by each customer and as such, each of them could have their own understanding of the brand (Gordon, 1999). This process paves the way for the concept of brand image to be created in the minds of the customers. A clear brand message can play a crucial part in this matter, as it’s encoded and sent out to consumers, who then receive and decode this message based on their frame of reference. (Lasswell, 1948). Any inconsistency in these processes will result in a communication gap between the firm and its customers. The message that the company sends could be defined as the brand identity it wants to convey and the way this message gets decoded by the costumers can be defined as the brand image that has been conceived in their minds.

The brand identity should concentrate on points of differentiation that create sustainable competitive advantage for the enterprise. Brand identity is built upon a profound understanding of the company’s environment, including its customers, competitors and partners. The brand identity and the business strategy of the firm should be identical fundamentally and they should also take into account the firm’s desire to hold on to its promise to the customers (Aaker & Joachimsthaler, 2000).

A well-built brand identity creates customer loyalty, the ability to ask for higher prices and the strength needed to successfully launch new products and services. A brand is considered to be successful when it can correlate with an eminent product, service, person or place in the minds of the users.

A definition for the customer brand knowledge could be all the interpretations, descriptions and information in the customer’s minds that can somehow relate to the brand. Knowledge can be attained from several sources such as attributes, awareness, behaviors, thoughts, images, benefits, feelings, attitudes, and experiences. These are the levels of brand knowledge that exist in the users’ minds.

A strong brand is able to create various advantages for the firm. These include higher levels of demand, sales, profitability, growth, scale, cost reductions and valuation of assets that create sustainable competitive advantage (Temporal, 2000). The brand promise can be defined as the core functional and emotional benefits that can be obtained when customers experience the products or services of the brand themselves, and it can be attributed to the heart and soul of the brand (Knapp, 2000).