What’s in a Brand?

How would you define a brand? The term is used frequently, but with different meanings. As brand “guardians,” marketeers and brand-creators need to be aware that there are at least 3 different definitions and must understand the circumstances where each definition is relevant.

Defining what is meant by “brand” is no easy task. The three main definitions examined here offer increasing scopes of what a brand can encompass, including everything from simple logos and trademarks up through the creation of a brand-focused company culture. Knowledge of brands and the key issues involved in brand valuations can help marketers express the importance of brands in generating and sustaining the financial performance of businesses.

A logo and associated Visual Elements

This definition focuses on the legally protectable visual elements used to differentiate and stimulate demand for one company’s products and services over another. The main legal elements covered by this definition include trade names, trademarks, and trade symbols.

In order to add value, trademarks and trade symbols need to carry “associated goodwill,” which is acquired by providing high-quality products and by giving good service over a long period. For trademarks and trade symbols to go on conveying value to licensees, high-quality products and good service need to remain associated with the trademarks or trade symbols.

Bundle of trademark and associated intellectual property rights

This wider concept of brand includes marketing intangibles such as domain names, product design rights, trade dress, packaging, and copyrights in associated colors, smells, sounds, descriptors, logotypes, advertising visuals, and written copy.

Many of these legal rights can be registered or protected in different trade classes and territories and, if registered or legally owned, can be traded, transferred, sold, or licensed. When licensing a brand, an agreement on the bundling of these rights is usually included.

Some commentators have interpreted the intellectual property rights included in this definition very widely indeed. In fact, tangible as well as intangible property rights have been referred to as integral components of brands. Some argue that the Mercedes brand would be incomplete if it were separated from the other tangible and intangible assets used to build Mercedes products. We identify four categories of intangible assets that may be required to deliver the subject brand in an appropriate way:

• Knowledge intangibles.
  Among these are patents, software, recipes, specific know-how, product research, and information databases.
• Business process intangibles.
  These include unique ways of organizing the business, including innovative business models, flexible manufacturing techniques, and supply chain configurations.
• Market position intangibles.
  Included here are retail listings and contracts, distribution rights, licenses (such as landing slots), production or import quotas, third-generation telecom, government permits and authorizations, and raw materials sourcing contracts.
• Brand and relationship intangibles.
  These include trade names, trademarks and trade symbols, domain names, design rights, trade dress, packaging, copyrights over associated colors, smells, sounds, descriptors, logotypes, advertising visuals, and written copy. Associated goodwill is also usually included.

Some people argue that a larger bundle of intangibles should be included in the definition of brand because consumer loyalty is created over a long period by many touch points and consumer experiences. This “360-degree” experience may require the presence of any or all of the unique intangibles noted here to maintain brand quality and integrity.

Protagonists of a more holistic definition of brand ask whether the Mercedes brand would command such fierce loyalty and price premium without the benefit of the Daimler Benz design, engineering, and service. They argue that the Zantac brand would be incomplete without the Ranitidine patent. The Guinness brand would not be Guinness without the genuine recipe and production process. This more holistic view is consistent with the opinion that brand is a much broader and deeper experience than either the “logo and associated visual elements” or even the full range of “brand and relationship intangibles” referred to here. This definition will be referred to as “brand” throughout the article.

A holistic company or organizational brand

Under the third definition, brand refers to the whole organization within which the specific logo and associated visual elements, the larger bundle of “visual and marketing intangibles,” and the associated goodwill are deployed. A combination of all these legal rights together with the culture, people, and programs of an organization all provide a basis for differentiation and value creation within that organization. Taken as a whole, they represent a specific value proposition and create stronger customer relationships.

This broadest definition of brand stresses the need for consistent communication with all stakeholder audiences. Rather than just increasing the preference of customers for buying the company’s products and services, the brand becomes a tool for affecting the preference of other audiences to do business with the organization. For example, the brand may favorably affect staff, suppliers, business partners, the trade, regulators, and providers of capital. The benefits of a strong organizational brand are increased demand and distribution, but also include lower costs of materials, personnel, debt, and equity.

In this context, some academicians and practitioners use the terms reputation and brand inter-changeably. If there are problems with a company’s reputation or brand, damaging effects can arise with any or all of the various stakeholder audiences. End consumer measures may be sufficient for the valuation of trademarks and brands, but not branded businesses. We refer to this definition as “branded business.”