Q&A - What is a brand name and what are the advantages of having a strong brand?

A student asks:

What is a brand name and what are the advantages of having a strong brand?

A brand name is a name used to distinguish one product from its competitors.

It can apply to a single product, an entire product range, or even a company (e.g. Virgin, Ferrari, Bang and Olufsen).

A brand name is usually associated with a logo or other graphical representation of the brand in order to strengthen the brand image.

The main purpose of branding is to differentiate the products and services of one product or business from those of competitors.

The key advantages to having a strong brand include:

Successful brand-building helps profitability by “adding values” that customers are prepared to pay for.
Strong brands inspire customer loyalty leading to repeat sales and word-of mouth recommendation
The brand owner can usually charge higher prices, especially if the brand is the market leader
Better access to distribution - retailers, distributors and other sellers usually want to stock top selling brands. With limited shelf space it is more likely the top brands will be on the shelf than less well-known brands