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What is branding and why it is important

Updated: Jun 18

A brand gives an identity to a company that is distinct from other companies selling a similar product or service.

A good brand can create a good impression and build a good reputation that will encourage brand loyalty. Brand loyalty benefits business as it;

  1. Encourages repeat purchase even at a high price

  2. May continue to purchase product even as competitor reduces price

  3. Given a good reputation and brand image, customers are likely to stick to the brand to maintain socio-economic status

  4. Customers are more willing to try out new product launched

The brand awareness will develop brand recognition and increase customer loyalty at the same time, which will encourages customers to continue buying the product (repeat purchase). Branding is, therefore, an activity that creates a good brand image of the product and organization that will help;

  1. Protect and increase market share

  2. Increase sales and revenue in the long run


  1. What is meant by 'customer loyalty'? (2 marks) Oct/Nov 2019/13

  2. Define 'brand image'. (2 marks) May/June 2020/11

  3. What is meant by "brand name"? (2 marks) Oct/Nov 2018/11

  4. Identify and explain two advantages to WKN of maintaining customer loyalty (6 marks) Oct/Nov 2019/11

  5. Explain two ways ALB could improve customer loyalty (6 marks) May/June 2020/12

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