Branding defined - Branding is differentiating a product or service to increase it's value. A brand will have a higher perceived value to a consumer and, thus, be worth more because the familiarity or trust values associated with it will give the consumer a better peace of mind in believing that they are getting value for their money.

A brand has value just like the accounting principle of Goodwill. When accountants value the worth of a business that is sold they take the purchase price and subtract it by it's book value. The difference is the goodwill. Why would someone pay more for a business than what it's assets are worth? Because the business might already be established with a good reputation. This reputation could take years for a brand new business to build. This reputaion has value and so that is why someone would pay a premium above it's book value for an established business.

A brand is just like goodwill. A brand has a reputation. It has value. That is why a consumer might pay more to purchase a brand name rather than pay less to purchase a product that he is unfamiliar with.

Branding, then, is the effort to make a product or service worth more to consumers by being recognizable and wanted more than similar products that are available. Branding is an art and can be performed in many ways via communications with it's customers. Advertising and marketing are the main methods that companies use to brand their products.

A brand can be huge and known worldwide, like Coca-Cola or McDonalds. Alternatively, a brand can have just local recognition. But in any case, branding has one goal and that is to increase the value of a product or service by making it familiar to it's end users.