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Exam code: 7115
Written by: Ashika|Reviewed by: Caroline Carroll|Updated 2 July 2026

The importance of brand image

The importance of brand image

  • Developing a strong brand involves creating a unique and identifiable name, design, symbol or other feature that differentiates a product or service or company from its competitors

    • This can help a business to add value, as customers are often willing to pay higher prices for brands they recognise and trust

  • Branding helps businesses create awareness, develop strong customer relationships, generate loyalty and sets them apart from competitors

Diagram showing types of branding: product branding, own brand product, and manufacturer/corporate branding, connected to a central circle.
Building a brand using one of these three methods, or all of them, will help a business to develop a strong and loyal customer base

The three main types of branding

Manufacturer or corporate branding

  • Manufacturer or corporate branding refers to the use of a company name or logo to promote all the products or services offered by a company

    • This type of branding is used by companies like Nestlé, Nike, and Apple

Product branding

  • Product branding refers to the use of a unique name, design or symbol to promote a specific product

    • For example, KitKat, Coca-Cola, and McDonald's Big Mac

Own-brand product 

  • Own brand or private label branding refers to the use of a retailer's name to promote a specific product or service and is often used by supermarkets

    • For example, ASDA chocolate, Tesco's Finest range, and Sainsbury's Basics range

Examples of the ways that brands have been built

Method

Explanation

Example

Unique selling points (USPs)

  • USPs are features that make a product or service stand out from competitors

  • Brands highlight these to build a strong image.

  • Apple is known for sleek design and high-quality materials. This USP supports its premium brand image

Advertising

  • Effective adverts help raise brand awareness and connect emotionally with customers

  • Coca-Cola’s “Share a Coke” campaign used personalised bottles to drive sales and brand loyalty

Sponsorship

  • Partnering with events or people links the brand to positive values and increases visibility

  • Nike sponsors major athletes and global events like the Olympics, reinforcing its image of excellence

Social media

  • A good social media strategy builds a loyal community and boosts brand engagement

  • Glossier uses Instagram and shares content from users, helping it grow a loyal following

Emotional branding

  • Brands create emotional bonds by connecting with customer values and beliefs

  • Patagonia focuses on social and environmental issues, attracting like-minded customers.

Benefits of branding to a business

1. Differentiation

  • Branding differentiates a business from its competitors

    • This supports marketing and advertising efforts to build memorable promotional materials and campaigns

2. Reduced price elasticity of demand

  • Customers are less sensitive to price changes of products with strong and appealing branding

    • Customers who are loyal to a brand are more likely to continue purchasing the product even if the price increases

3. Ability to charge premium prices

  • Customers may be willing to pay more for a product that is associated with a well-established brand

    • They often perceive products with strong branding to be of higher quality and therefore worth the extra cost

4. Brand recognition and identity

  • Strong branding helps to build trust and credibility

    • This can create an emotional connection with customers, which helps generate repeat purchases

The role of packaging

The role of packaging

  • Packaging is the physical container or wrapping for a product

  • It is also used for promotion and selling appeal

  • Packaging is normally designed to

    • Present products in the most practical yet attractive way

    • Communicate the quality of the product

    • Catch the customer's eye when they shop 

    • Provide key information to customers

    • Establish the business's brand image

  • To stand out from the competition, brands are investing more money than ever before in creative and environmentally friendly packaging designs

    • For example, Lush Cosmetics packages gift boxes with popcorn, which can be composted by the end user and uses less energy than plastic alternatives

Cardboard box containing a tub of shower cream, a white bath bomb, a purple soap, and packing popcorn for padding.
An example of popcorn used for packaging Lush's cosmetic products

Developing new products

Developing new products

  • One way to stay ahead of the competition is by developing new products and innovating existing ones

  • The process of new product development involves a number of important stages

Five coloured arrows illustrating the new product development process: generate ideas, select the best idea, develop a prototype, test launch and full launch.
The new product development process

  1. Generate ideas

    • New product concepts are discussed and brainstormed using customer suggestions, ideas from competitors’ products, employees’ ideas and information collected through market and technical research 

  2. Select the best idea

    • Ideas are weighed up with some dropped and others chosen for further research

    • This decision relates closely to costs and likely demand

    • Research includes looking into forecast sales, size of market share and cost-benefit analysis for each product idea

  3. Develop a prototype

    • This allows the operations department to see how the product can be manufactured, any problems or difficulties arising from its production and how to fix them

    • Computer simulations are often used to produce 3D prototypes on screen

  4. Test launch

    • The developed product is sold to on a small scale to a limited market to see how well it sells before its full launch

    • Changes may be needed prior to an expensive, large-scale launch

    • Digital products like apps and software run beta versions, which is a method of test-launching

  5. Full launch of the product

    • The finalised version of the product is launched to the entire target market

Evaluating new product development

Advantages

Disadvantages

  • Businesses can sell more to existing customers, which is cheaper than attracting new ones

  • New products help spread fixed costs, such as rent and salaries, across a wider range

  • Offering more products reduces reliance on specific customers or markets

  • Creating an innovative product can give a unique selling point that helps charge higher prices and improves advertising

  • Innovative products can use pricing strategies like price skimming to maximise early profits

  • Collecting and analysing market research for a new product can take a lot of time

  • Research, development and design can be very expensive

  • Producing trial products can waste costly materials, especially when using new or complex components

  • If the product is not right for the market, sales may be low and research may be wasted

  • A failed product can damage the business’s reputation and brand image

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