Glossary of Branding Terms

Brand awarness

What is brand awareness?
Brand awareness is the first stage in the sales funnel: the ability of a brand to be perceived by potential customers, either through physical presence, marketing activities or online presence. The goal of every brand is to achieve higher visibility in the market, compared to its competitors.

Why is brand awareness important?
Brand awareness means greater visibility and, as a result, greater recognition of a brand. When customers are familiar with a brand, they are more likely to trust it and are more likely to choose its products or services. High brand awareness strengthens a company’s market position and facilitates the introduction of new offerings. This is how brand awareness contributes to growth and profitability.

How can brand awareness be improved?
Consistent brand messages, relevant and differentiating design and emotionally appealing campaigns strengthen brand perception. Brand awareness can then be increased through targeted marketing strategies such as social media and content marketing. Classic advertising, SEO, PR and partnerships also increase visibility. In addition, positive customer experiences and word of mouth sustainably promote brand awareness.

Is high brand awareness enough to make a brand successful?
Brand awareness is important, but it is not the only factor for success. To lead a brand to business success, it must spark interest with relevant offers and prompt a purchase decision. Various factors contribute to this, such as innovativeness, market leadership and uniqueness. High product quality, a good price-performance ratio, availability and customer service also play a role.

Because not all of these factors are transparently apparent to customers, the most important success factor is trust in the brand.

What role does the brand play in B2B purchasing decisions?
In B2B, the brand contributes between 2% and 20% to the purchasing decision. In the B2C luxury goods industry, the role of the brand achieves 90% or more.

While in B2B innovation industries such as med-tech, the role of brand can be up to 20%, the brand plays a lesser role in the commodity sector (e.g. chemical raw materials), since the standardized quality and availability of the materials are the main focus here.

Positioning also influences the role of brand: for premium brands, the brand contributes significantly more to the purchase decision than for low-priced entry-level brands.

A “Role of Brand” of 2% may seem low. But with a turnover of 100 million, 2 million can be attributed exclusively to the power of the brand.