Fundamentals of Business

A brand

√ A brand which is widely known in the marketplace acquires brand recognition. When brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present. For example, Disney has been successful at branding with their particular script font (originally created for Walt Disney's "signature" logo), which it used in the logo for go·com.

√ Brand equity measures the total value of the brand to the brand owner, and reflects the extent of brand franchise. The term brand name is often used interchangeably with "brand", although it is more correctly used to specifically denote written or spoken linguistic elements of a brand. In this context a "brand name" constitutes a type of trademark, if the brand name exclusively identifies the brand owner as the commercial source of products or services. A brand owner may seek to protect proprietary rights in relation to a brand name through trademark registration.

√ Brand energy is a concept that links together the ideas that the brand is experiential; that it is not just about the experiences of customers/potential customers but all stakeholders; and that businesses are essentially more about creating value through creating meaningful experiences than generating profit. Economic value comes from businesses transactions between people whether they are customers, employees, suppliers or other stakeholders. For such value to be created people first have to have positive associations with the business and/or its products and services and be energised to behave positively towards them - hence brand energy. It has been defined as "The energy that flows throughout the system that links businesses and all their stakeholders and which is manifested in the way these stakeholders think, feel and behave towards the business and its products or services".

"A great brand raises the bar - it adds a greater sense of purpose to the experience, whether it's the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee you're drinking really matters". - Howard Schultz (CEO, Starbucks Corp.)

√ Brand monopoly
In economic terms the "brand" is a device to create a monopoly - or at least some form of "imperfect competition" - so that the brand owner can obtain some of the benefits which accrue to a monopoly, particularly those related to decrease price competition. In this context, most "branding" is established by promotional means. There is also a legal dimension, for it is essential that the brand names and trademarks are protected by all means available. The monopoly may also be extended, or even created, by patent, copyright, trade secret, and other intellectual property regimes.

√ Brand extension
An existing strong brand name can be used as a vehicle for new or modified products; for example, many fashion and designer companies extended brands into fragrances, shoes and accessories, home textile, home decor, luggage, (sun) glasses, furniture, hotels, etc. Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide, Adidas and Puma to personal hygiene.