Chapter 1
Brands and Brand Management
Learning Objectives
1.1. Define what a brand is and state how a brand differs from a product.
1.2. Summarize why brands are important.
1.3. Describe how branding applies to virtually everything.
1.4. Explain what brand equity is and the concept of customer-based brand equity.
1.5. Identify the steps in the strategic brand management process.
Overview
Brands and branding have become an essential component to our economy and society,
growing in importance through the years. They have become part of our everyday vernacular
in social conversation and professional settings. In a broad sense, brands are seen as a way to
define or describe the meaning or expectations for a person, place, or thing.
Brands have many commercial applications. Firms and other organizations large and small
have realized that among their most valuable assets are the brands associated with their
products or services. In our increasingly complex world, all of us, as individuals. And as
business managers, face more choices with less time to make them. Thus, a strong brand’s
ability to simplify decision making, reduce risk, and set expectations is invaluable. Creating
strong brands that deliver on that promise and maintaining and enhancing the strength of
those brands over time is a management imperative.
This text will help you reach a deeper understanding of how to achieve those branding goals.
We place particular emphasis on understanding psychological principles at the individual and
firm level in order to make better decisions about brands. With these goals in mind, this first
chapter defines what a brand is. We consider the functions of a brand from the perspective
of both consumers and firms, and discuss why brands are important to both. We look at
what can and cannot be branded and identify some strong brands. We next introduce the
concept of customer-based brand equity (CBBE). The chapter concludes with an overview
of the strategic brand management process. Brand Focus 1.0 at the end of the chapter
describes and contrasts the concepts of customer equity and brand equity.
Chapter Outline
I. Preview
A. Brands and branding have become an essential component to our economy and
society, growing in importance through the years.
1
Copyright ©2027 Pearson Education, Inc.
, B. We place particular emphasis on understanding psychological principles at the
individual and firm level in order to make better decisions about brands. With these
goals in mind, this first chapter defines what a brand is.
C. We consider the functions of a brand from the perspective of both consumers and
firms and discuss why brands are important to both. Basic objectives are: to explore
the important issues in planning, implementing, and evaluating brand strategies.
D. The information is designed to be relevant to all organizations, regardless of size,
nature of the business, or profit orientation.
II. What Is a Brand?
<<Use Learning Objective 1.1 Here>> Define what a brand is and state how a brand
differs from a product.
A brand is a “name, term, sign, symbol, or design, or a combination of them, intended to identify the
goods and services of one seller or group of sellers to differentiate them from those of competition.”
<<Use Branding Brief 1-1 Here>> The History of Branding
A. Brand Elements
1. The different components of a brand that identify and differentiate it are
brand elements.
2. Brand names, brand logos, and brand symbols come in different forms.
3. A brand is something that resides in the minds of consumers.
B. <Use Exercise 1 Here>Brands versus Products
1. A product is anything we can offer to a market for attention, acquisition, use, or
consumption that might satisfy a need or want.
2. There are five levels of meaning for a product:
a. The core benefit level
b. The generic product level
c. The expected product level
d. The augmented product level
e. The potential product level
<<Use Table 1-1 Here.>>
3. Steady investments in research and development have led to rapid innovations
and market response.
2
Copyright ©2027 Pearson Education, Inc.
, <<Use Figure 1-1 Here.>> The Top 10 Innovative Companies of 2025
4. Brands carry a number of different types of associations. Marketers must account
for them when making decisions.
5. The most valuable assets may be intangible.
C. What Are the Strongest Brands?
l. Any brand, no matter how strong is vulnerable to poor brand management.
2. Strong brand management can contribute to marketplace success.
<Use Branding Brief 1-2 Here> Coca Cola’s Branding Lesson
<<Use Discussion Question 1 Here.>>
III. Why Do Brands Matter?
<<Use Learning Objective 1-2 Here >> Summarize why brands are important.
A. Consumers
1. The term consumer broadly encompasses all types of customers, including
organizations and individuals.
2. Brands provide a shorthand for—or simplification of—product decisions.
3. Brands help consumers identify the product’s source, assign responsibility to the
product’s maker, reduce risk, reduce search costs, act as a promise or pact, are
symbolic devices, and are quality signals.
a. Products can be classified into: search goods, experience goods, and credence
goods.
b. Buyers’ risks include: functional risk, physical risk, financial risk, social risk,
psychological risk, and time risk.
<Figure 1-2> Roles That Brands Play
<Use Exercise 2 Here.>>
B. Firms
3
Copyright ©2027 Pearson Education, Inc.
, 1. Brands can help firms identify its products, protect unique features, signal
quality, endow products with associations, serve as a source of competitive
advantage and financial returns.
2. Huge sums have been paid for brands in mergers and acquisitions.
<Use Table 1-2 Here> Brand Value as a Percentage of Market Capitalization (2024)
C. New Forms of Branding
1. It is important to recognize that other entities can provide some of those same
benefits that brands provide.
In today’s digital world, younger consumers may gain the same benefits from other sources.
<Use Table 1-2 Here> Brand Value as a Percentage of Market Capitalization (2024)
IV. Can Anything Be Branded?
A brand is something that resides in the minds of consumers. Marketers must give
consumers a label and a meaning that helps consumers perceive differences among
brands.
<<Use Learning Objective 1.3 Here >> Describe how branding applies to virtually
everything.
<<Use Branding Brief 1-3 Here>> Branding Commodities
A. Physical Goods: traditionally associated with brands
1. Business-to-Business (B2B) Products
a. A strong B2B brand can provide a clear competitive advantage.
b. Even though purchasers are well-informed, B2B marketers recognize the
importance of the brand and execution.
<<Use The Science of Branding 1-1 Here.>>Understanding Business-to-Business
Branding
2. High-Tech Products: the speed and brevity of the technology life cycle makes
high-tech products a unique challenge.
B. Services
1. Role of Branding with Services: services are less tangible. Branding can be a
competitive weapon.
2. Professional Services
4
Copyright ©2027 Pearson Education, Inc.
Brands and Brand Management
Learning Objectives
1.1. Define what a brand is and state how a brand differs from a product.
1.2. Summarize why brands are important.
1.3. Describe how branding applies to virtually everything.
1.4. Explain what brand equity is and the concept of customer-based brand equity.
1.5. Identify the steps in the strategic brand management process.
Overview
Brands and branding have become an essential component to our economy and society,
growing in importance through the years. They have become part of our everyday vernacular
in social conversation and professional settings. In a broad sense, brands are seen as a way to
define or describe the meaning or expectations for a person, place, or thing.
Brands have many commercial applications. Firms and other organizations large and small
have realized that among their most valuable assets are the brands associated with their
products or services. In our increasingly complex world, all of us, as individuals. And as
business managers, face more choices with less time to make them. Thus, a strong brand’s
ability to simplify decision making, reduce risk, and set expectations is invaluable. Creating
strong brands that deliver on that promise and maintaining and enhancing the strength of
those brands over time is a management imperative.
This text will help you reach a deeper understanding of how to achieve those branding goals.
We place particular emphasis on understanding psychological principles at the individual and
firm level in order to make better decisions about brands. With these goals in mind, this first
chapter defines what a brand is. We consider the functions of a brand from the perspective
of both consumers and firms, and discuss why brands are important to both. We look at
what can and cannot be branded and identify some strong brands. We next introduce the
concept of customer-based brand equity (CBBE). The chapter concludes with an overview
of the strategic brand management process. Brand Focus 1.0 at the end of the chapter
describes and contrasts the concepts of customer equity and brand equity.
Chapter Outline
I. Preview
A. Brands and branding have become an essential component to our economy and
society, growing in importance through the years.
1
Copyright ©2027 Pearson Education, Inc.
, B. We place particular emphasis on understanding psychological principles at the
individual and firm level in order to make better decisions about brands. With these
goals in mind, this first chapter defines what a brand is.
C. We consider the functions of a brand from the perspective of both consumers and
firms and discuss why brands are important to both. Basic objectives are: to explore
the important issues in planning, implementing, and evaluating brand strategies.
D. The information is designed to be relevant to all organizations, regardless of size,
nature of the business, or profit orientation.
II. What Is a Brand?
<<Use Learning Objective 1.1 Here>> Define what a brand is and state how a brand
differs from a product.
A brand is a “name, term, sign, symbol, or design, or a combination of them, intended to identify the
goods and services of one seller or group of sellers to differentiate them from those of competition.”
<<Use Branding Brief 1-1 Here>> The History of Branding
A. Brand Elements
1. The different components of a brand that identify and differentiate it are
brand elements.
2. Brand names, brand logos, and brand symbols come in different forms.
3. A brand is something that resides in the minds of consumers.
B. <Use Exercise 1 Here>Brands versus Products
1. A product is anything we can offer to a market for attention, acquisition, use, or
consumption that might satisfy a need or want.
2. There are five levels of meaning for a product:
a. The core benefit level
b. The generic product level
c. The expected product level
d. The augmented product level
e. The potential product level
<<Use Table 1-1 Here.>>
3. Steady investments in research and development have led to rapid innovations
and market response.
2
Copyright ©2027 Pearson Education, Inc.
, <<Use Figure 1-1 Here.>> The Top 10 Innovative Companies of 2025
4. Brands carry a number of different types of associations. Marketers must account
for them when making decisions.
5. The most valuable assets may be intangible.
C. What Are the Strongest Brands?
l. Any brand, no matter how strong is vulnerable to poor brand management.
2. Strong brand management can contribute to marketplace success.
<Use Branding Brief 1-2 Here> Coca Cola’s Branding Lesson
<<Use Discussion Question 1 Here.>>
III. Why Do Brands Matter?
<<Use Learning Objective 1-2 Here >> Summarize why brands are important.
A. Consumers
1. The term consumer broadly encompasses all types of customers, including
organizations and individuals.
2. Brands provide a shorthand for—or simplification of—product decisions.
3. Brands help consumers identify the product’s source, assign responsibility to the
product’s maker, reduce risk, reduce search costs, act as a promise or pact, are
symbolic devices, and are quality signals.
a. Products can be classified into: search goods, experience goods, and credence
goods.
b. Buyers’ risks include: functional risk, physical risk, financial risk, social risk,
psychological risk, and time risk.
<Figure 1-2> Roles That Brands Play
<Use Exercise 2 Here.>>
B. Firms
3
Copyright ©2027 Pearson Education, Inc.
, 1. Brands can help firms identify its products, protect unique features, signal
quality, endow products with associations, serve as a source of competitive
advantage and financial returns.
2. Huge sums have been paid for brands in mergers and acquisitions.
<Use Table 1-2 Here> Brand Value as a Percentage of Market Capitalization (2024)
C. New Forms of Branding
1. It is important to recognize that other entities can provide some of those same
benefits that brands provide.
In today’s digital world, younger consumers may gain the same benefits from other sources.
<Use Table 1-2 Here> Brand Value as a Percentage of Market Capitalization (2024)
IV. Can Anything Be Branded?
A brand is something that resides in the minds of consumers. Marketers must give
consumers a label and a meaning that helps consumers perceive differences among
brands.
<<Use Learning Objective 1.3 Here >> Describe how branding applies to virtually
everything.
<<Use Branding Brief 1-3 Here>> Branding Commodities
A. Physical Goods: traditionally associated with brands
1. Business-to-Business (B2B) Products
a. A strong B2B brand can provide a clear competitive advantage.
b. Even though purchasers are well-informed, B2B marketers recognize the
importance of the brand and execution.
<<Use The Science of Branding 1-1 Here.>>Understanding Business-to-Business
Branding
2. High-Tech Products: the speed and brevity of the technology life cycle makes
high-tech products a unique challenge.
B. Services
1. Role of Branding with Services: services are less tangible. Branding can be a
competitive weapon.
2. Professional Services
4
Copyright ©2027 Pearson Education, Inc.
