Brands also provide a number of valuable functions to their firms.14 Fundamentally, they serve
an identification purpose, to simplify product handling or tracing. Operationally, brands help organize
inventory and accounting records. A brand also offers the firm legal protection for unique
features or aspects of the product. A brand can retain intellectual property rights, giving legal
title to the brand owner.15 The brand name can be protected through registered trademarks; manufacturing
processes can be protected through patents; and packaging can be protected through
copyrights and designs. These intellectual property rights ensure that the firm can safely invest
in the brand and reap the benefits of a valuable asset.
We’ve seen that these investments in the brand can endow a product with unique associations
and meanings that differentiate it from other products. Brands can signal a certain level of
quality so that satisfied buyers can easily choose the product again.16 This brand loyalty provides
predictability and security of demand for the firm and creates barriers of entry that make it
difficult for other firms to enter the market