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The Functions of a Brand

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A brand is a consistent, holistic pledge made by a company, the face a company presents to the world. A brand serves as an unmistakable and recongnizable symbol for products and services. It functions as the “business card” a company proffers on the competitive scene to set itself apart from the rest. In addition to differentiating in this way, a brand conveys to consumers, shareholders, stakeholders, society and the world at large all the values and attitudes embodied in a product or company. A brand fulfills key functions for consumers and companies alike.

The functions of a brand for consumers

  • Brands play a role in terms of communication and identification. They offer guidance, convey an expectation of quality and so offer help and support to those making purchase decisions. Brands make it easier for consumers to interpret and digest information on products.
  • The perceived purchasing risk is thus minimized, which in turn helps cultivate a trust-based relationship.
  • A brand can also serve as a social business card, expressing membership in a certain group. Premium brands, for instance, can even engender a sense of distinction and prestige.
  • Consuming certain brands is also a means of communicating certain values. By opting for particular brands, a consumer demonstrates that he or she embraces particular values; the brand becomes a tool of identity formation.

The functions of brands from a company’s perspective

  • A brand fosters brand and customer loyalty. Particularly strong brands can establish the prevalence of premium prices on the market and soften consumer reactions to price changes. Specifically brand-oriented buyers – who are more concerned with brands than prices – are more resilient when it comes to changes in the competitive scenario. This decreased sensitivity to price changes makes them more valuable as customers.
  • The reduction in perceived purchasing risk lays the groundwork for a relationship of trust, giving brands a role to play in lashing customers to a company.
  • Brands can counter the swelling ranks of trade because dealers stock their shelves and fill their order lists with products explicitly requested by consumers. Strong brands in particular keep sales levels and market share constant and considerably lessen dependence on short-term special promotions.
  • A brand unlocks great potential in terms of licensing opportunities as well, helping companies achieve plans for international expansion.
  • Finally, brands also offer companies potential for honing a clear profile and overshadowing the competition. Strong brands in particular can reduce the risk that new product launches will flop and can be used as platforms for successful brand stretching (also in terms of launches in completely new product segments and sectors)


3 responses so far ↓

  • 1 arslan mahood // Apr 23, 2009 at 7:34 am

    this is not a comprehensively explained article so have less credibility

  • 2 Avinash Singh // Aug 28, 2010 at 1:54 am

    Thanks to this site.. it helps a lot in understanding the functions of brand

  • 3 Ben Okafor // Jan 25, 2012 at 7:47 am

    Excellent work. It is wonderful.
    Thanks for your contributions to the world knowledge.

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