Building and managing your brand, its identity, its name, and its reputation is critical to your company’s ultimate success. How (and when and where) you connect with your customers is determined in large part by your branding and by how your audience relates to your brand. markets are more competitive than ever, and the quality of products and services more consistent so, in many cases, your branding will become your strongest differentiator in the marketplace.

Today I want to discuss the three types of brands, what distinguishes each, and some thoughts on how this can help you to determine the optimal marketing mix of strategy and tactics.

1. Functional brands.
A functional brand is typically bought to satisfy a functional need on the part of the consumer. Automobiles, cell phones, and dish soap are examples of functional brands. Functional brands are tied in the consumer’s mind to specific product categories and typically share  the user’s associations with other brands in the same category. For instance, all automobiles share in their basic functionality; they are designed to transport passengers from point A to point B and they all do the same thing in essentially the same manner. Because of this, functional brands must differentiate from their competitor’s brands by stressing either better performance or better economy.

Performance: BMW is an automobile brand that maintains category leadership by spending heavily on product research and design to produce cars that are faster, more luxurious, and with greater cutting edge design relative to the competition. BMW cars are known for their sophisticated and elegant styling as well as their high-performance components and when BMW launches a new model, it is positioned based on these qualities and BMWs marketing.

Economy: Kia is a South Korean automobile company which also produces many models sold in the US and around the world, but this company competes based on perceived economic value. Kia also spends a great deal of money on R&D, but the focus is on finding ways to reduce cost through increased manufacturing efficiency, simpler design, and more modest features. Kia has become a leader in the market, based on their ability to introduce products at a price point that is attractive to  many automobile buyers. Kia competes by striving to produce a high-quality car at a low price.

Building and managing a functional brand is dependent on focusing the marketing mix on either the product itself (for superior performance) or on place and price (for superior economy). Advertising and messaging must support the connection between the brand and the category. but must also stress what it is that makes the brand superior, either in functionality and features, or in price and overall value.

2. Image brands.
Image brands create value by building  specific perception in user’s minds. Certain fashion, food, and liquor products are image brands and they differentiate themselves because buyers perceive them as offering a unique association or image. For instance, while clothing is typically a functional product, many huh-end fashion brands are marketed based on the image used to differentiate it from the competition.

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