What a brand actually is

The word began as fire. In Old English a brand was a burning piece of wood, and by the 1550s it also meant the mark a hot iron left to show who owned something or made it. The American Marketing Association still defines a brand from the seller's side, as any distinctive feature like a name, term, design, or symbol that identifies goods or services ama.org. Strategists use the word for something wider. They mean what a person remembers and expects on meeting that sign, and whether the brand comes to mind at all when they need something. So keep three words apart from the start. The logo is one mark, and the identity is the designed system of marks, colours, type, pictures and words that the company controls. The brand is what strangers make of all of that, together with everything the company never designed, such as a late delivery or a friend's opinion.

Coca-Cola learnt this in public in 1985. The company had tested a new formula on nearly 200,000 consumers, who preferred it, and on 23 April it announced the first change to the recipe in 99 years. Complaints grew until the hotline was taking 1,500 calls a day by June. On 11 July, 79 days after the launch, the old formula came back as Coca-Cola Classic. The taste tests had measured the drink and missed the memories attached to the name. A study in the journal Neuron in 2004 caught the same effect in a brain scanner. Researchers at Baylor College of Medicine gave 67 people Coke and Pepsi, and telling them that a drink was Coke changed which one they said they preferred and activated brain areas including the hippocampus, which is involved in memory. The Pepsi label made no such difference.

Most of the field agrees on how this works, even where it disagrees about what to do. A brand is stored in memory as a web of linked associations, such as a name, a colour, a price and the time it let you down. Nobody searches their memory for a brand in the abstract. Something in the moment reaches in and pulls a brand out, like needing something to take to a dinner, something for a hangover or someone to fix a leaking tap on a Sunday. Researchers call these moments category entry points. A brand linked to more of them comes to mind more often and for more people, and Byron Sharp calls that likelihood mental availability. Its partner is physical availability, meaning how easy the brand is to find and buy once somebody wants it.

The disagreement is about what a brand should put into those memories, and there are two serious schools. The older one says a brand wins by meaning something clear and different. David Aaker's Managing Brand Equity, published in 1991, treated a brand as assets linked to its name and symbol that add value to a product, and strategy as choosing which associations to build. Al Ries and Jack Trout had argued earlier, in a series for Advertising Age in 1972 and in their 1981 book Positioning, that the contest is fought in the customer's mind, which keeps room for very few names in each category. The best-known example is older still. In 1962 Hertz was the largest car-rental company, and Avis ran advertisements that admitted it was number two and promised that it tried harder. This school's first question is what the brand stands for, for whom and against which rivals.

The newer school comes from the Ehrenberg-Bass Institute in Adelaide and from Byron Sharp's en.wikipedia.org book How Brands Grow of 2010. It starts from purchase data, where the same patterns turn up across categories and decades. Under the double jeopardy law en.wikipedia.org, small brands suffer twice, because they have fewer buyers and those buyers buy them slightly less often. Customer bases overlap in proportion to market share, so your buyers are mostly other brands' buyers too. Loyalty varies far less between rivals than marketers expect. The school concludes that most buyers hold few detailed beliefs about any brand, so brands grow by reaching many light buyers and by being easy to recognise at the moment of choice. Jenni Romaniuk calls the colours, shapes, characters and sounds that do the recognising distinctive brand assets. Coca-Cola understood this in 1915, when it asked glass makers for a bottle so distinct that you could recognise it by feel in the dark or lying broken on the ground. The contour bottle was patented that November.

The two schools still argue, and good strategists use both. Positioning does its best work on decisions inside the company, such as what to make, who it is for, what to charge and which rivals to be compared with. Distinctiveness does its best work on what the outside world sees and hears, because it asks whether a hurried stranger can pick the brand out and remember it next time. The two sides share two beliefs. Both say a brand is built in memory, and both say it is built by doing the same things consistently for years. A company that follows only one school tends to overspend on it, on purpose statements nobody outside the building remembers or on a recognisable look attached to a product nobody has a reason to choose.