Glossary of Branding Terms
The contribution of a brand to the purchase decision. This value is referred to as the “role of brand” and depends heavily on the industry and the positioning of the brand.
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.
