THE SIGNIFICANCE OF BRANDING

In fact, the history of branding is not that long, especially in countries like Vietnam, where people often believe that "good wine needs no bush." However, the influence of a brand is enormous. A product spread by word of mouth can only reach towns, districts, and cities but cannot become an international commodity. This is the true meaning of branding.

What is a brand?

The U.S. once conducted a series of experiments, giving volunteers Coca-Cola and Pepsi through a straw while they lay inside an MRI scanner. When informed that they were drinking Coca-Cola—their favorite beverage—MRI scans showed stimulation in the frontal lobe of the brain. In contrast, there was no stimulation when they drank Pepsi.

The pleasure sensed by the brain for both drinks was the same. But Coca-Cola had an advantage over Pepsi due to its brand, which triggered higher-level brain mechanisms. These associations gave Coca-Cola a market edge, not because of the drink itself. It’s fascinating to observe the connections between the frontal lobe and the pleasure center. Dopamine chains in the frontal lobe directly project onto the pleasure center and activate it. This might explain why, when people think of their favorite brand, their imagination becomes more intense, stimulating the brain's pleasure center more strongly.

This is certainly good news for advertising companies. It shows that years of saturating consumers with Coca-Cola’s bright red packaging and the handwritten-style logo has made people unable to distinguish whether they love the product’s packaging or the brown soda inside. This experiment is cited in the best-selling book "Predictably Irrational" by economist Dan Ariely.

This experiment demonstrates the role of branding from a scientific perspective. Brand preference activates areas of the brain related to memory, association, higher-level cognition, and concepts, which in turn increases brain pleasure when using the product.

In short, branding affects perception, perception influences product experience, and product experience impacts purchasing behavior. A brand that gains a perception advantage secures a market advantage. What people are drinking isn’t just a brown soda but a “brand identity,” and perception significantly affects our taste.

As Jack Trout emphasized, "Perception governs reality."

Among the top brands that maintain success, product quality differences are often minimal. Over time, most brands within the same category become similar. The differentiation consumers experience comes from the brand itself. Perception governs reality. Starbucks tastes better because consumers think it does. The larger the market share a brand holds, the more its influence grows, and the more it shapes consumers' perceptions of reality.

Returning to the question, "What is a brand?" A brand is not just a name or a symbol to distinguish similar products or services. More importantly, it is the perceptual advantage formed in customers' minds compared to competitors. A brand focuses on differentiating a product’s conceptual characteristics, which is key to capturing consumer attention and establishing a perceptual advantage.

The True Meaning of a Brand

1. Brand communications

For businesses, a brand is their best communication tool. Although it cannot be seen or touched, it truly exists. For instance, when mentioning KFC or McDonald's, people don’t refer to the company but the brand. The same goes for Heineken beer, Hanoi beer, Saigon beer, Vinamilk, TH True Milk, Kinh Do cakes, and Hai Ha candies – all refer to the brand. This is the immense influence a brand has on a business.

2. Product of Brand

For a product, branding relies on the existence of the product itself. Only when a good product is made can a brand be built, creating long-term benefits. There are corporate brands and product brands. Literally speaking, Starbucks is a corporate brand, while Frappuccino is a product brand. P&G is a corporate brand, while Head & Shoulders and Rejoice are product brands. This is related to how companies market their stores. Some companies focus on building corporate brands, like Gree, Haier, and Disney, while others downplay the corporate brand and focus on product branding. This also ties into the type of branding.

3. Brand value

Big Brands and Small Brands. Strictly speaking, there are no big or small brands—only high-value and low-value brands. But all big brands once started small. Big brands have high credit value, while small brands have low credit value. Building a brand requires time, labor costs, and the user experience of the product.

4. Brand Competition

Distinguishing from Competitors. Packaging, logos, writing, sound, smell, colors, patterns, mascots, etc., are all standards for distinguishing a brand from competing products.

5. Brand Emotion

Why does a product need a brand? It’s not just about having a good product—quality is just one aspect. What truly drives consumers to spend more is not just the physical attributes of the product but the emotional value behind it: a symbol of status, a leading lifestyle, an aesthetic identity, emotional resonance, or cultural recognition. Luxury brands embody all of these aspects.

6. The repeat in Branding advertising

How to Build a Good Brand? There are many ways, but the most common is through “repeated advertising.” Building a brand costs money, and marketing also incurs costs. The most prominent feature of advertising is repetition. Human nature tends to fear the unfamiliar, so repetition is advertising's greatest value. To build a good brand, one of the key tasks is to advertise well.

The Harvard Business Review once stated that there are only three ways to dominate the market: the best price, the best product, or the best solution. For companies offering the best solutions, branding is crucial. For those offering the best product, branding is still essential. If a company offers the best price, branding may not be as important, but how can a company survive with low-profit margins in the long run? This explains why low-cost products often have shorter life cycles.