# Brand Identity: What It Is and How to Build One

> **Definition**
>
> A brand identity is the visible elements of a company's brand, including consumer perception, colors, design, and its logo.

## What Is Brand Identity?

Brand identity encompasses every way customers experience and perceive a business, from visual elements like logos to customer service interactions and marketing messages. While iconic examples like Apple Inc.'s ([AAPL](https://www.investopedia.com/markets/quote?tvwidgetsymbol=AAPL)) minimalist aesthetic or NIKE, Inc.'s ([NKE](https://www.investopedia.com/markets/quote?tvwidgetsymbol=NKE)) "Just Do It" motto show how powerful brand identity can be, there's far more to it than coming up with the neatest logo.

Whether a company is a startup or an established firm, understanding how it can build and maintain an effective brand identity in line with a broader business strategy could be the difference between thriving and merely surviving—or even failing—in today's competitive landscape.  

### Key Takeaways

*   Brand identity drives financial performance by enabling companies to command higher pricing and maintain customer loyalty even during market downturns.
*   Successful brands evolve their identity strategically over time while maintaining core recognition.
*   A brand identity must be regularly reevaluated against market changes, competitor moves, and shifting customer expectations.
*   A cohesive brand identity can become a company's most valuable asset, as shown by private equity purchases of major companies just for the use of their branding.

![Brand Identity](https://www.investopedia.com/thmb/3J9Ame3u0-cmmhcUz0BJEZvaB38=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/brand-identity.asp-final-a21dbe72033f4586a40fb6b571a46f68.png)

*Apple, Coca-Cola, Nike, and McDonald's are examples of companies with a strong brand identity. — Investopedia / Zoe Hansen*

## Understanding Brand Identity

Brand identity is more than a company's visual calling card—it's a strategic asset that can significantly affect its bottom line.

Consider how brands affect your own buying decisions. Suppose you're choosing one hotel over another on Expedia.com. You'd be looking at many with similar prices, and your decision would likely hinge on your perception of a brand's reliability, service quality, and overall experience. These perceptions don't just arise from your previous experience of using a hotel chain. They're also built through consistent messaging and delivery across every touchpoint. Done well, this should translate into measurable results for a company.

Here's what a well-crafted brand identity can do:

*   Enables premium pricing by creating perceived value beyond functional benefits
*   Reduces customer acquisition costs through stronger recognition and recall
*   Builds resilience during market downturns through customer loyalty
*   Creates barriers to entry for competitors by occupying distinct market positions
*   Increases employee engagement by providing clear purpose and direction

> **Fast Fact**
>
> The word "brand" derives from an old Norse word, brandr, meaning "to burn"; this refers to marks that were burned into livestock to signify their owner.

The most successful companies treat brand identity as part of an integrated business strategy rather than something that succeeds or fails on its own. The financial impact of brand identity can be substantial. According to _Forbes_' 2024 rankings, leading brands like Apple Inc. ([AAPL](https://www.investopedia.com/markets/quote?tvwidgetsymbol=AAPL); $241.2 billion) and NIKE, Inc. ([NKE](https://www.investopedia.com/markets/quote?tvwidgetsymbol=NKE);$39.1 billion) carry enormous monetary value. Yet, they would be valued far less if Apple and Nike were considered unable to deliver on what their branding promised.

For [smaller businesses](https://www.investopedia.com/small-business-8611031), brand identity's impact might be more modest but remains crucial. A local restaurant's consistent service style, interior design, and social media presence can create loyal customers willing to pay premium prices, even in a crowded market. If you own a small business, the key is ensuring your brand identity authentically reflects your operational capabilities while differentiating you from competitors for your target customers.

## Building a Brand Identity

Creating a valuable brand identity requires systematic investment and careful execution across a company's media ([social media](https://www.investopedia.com/terms/s/social-media.asp), in-store advertising, etc.—even printed receipts). The world's most valuable brands have consistent patterns in how they build and maintain their market positions:

### Strategies Are Research-Driven

Market analysis means studying both your potential customers and competitors to find gaps and opportunities. For example, when L'Oréal ($22.8B brand value) conducts market research, it analyzes the following:

*   Customer beauty routines and pain points
*   Price sensitivity across different market segments
*   Competitor product offerings and positioning
*   Emerging trends in beauty and skincare
*   Regional and cultural preferences

This research informs everything from product development to marketing messages, helping justify its $10.3B advertising budget in 2024.

### The Core Elements of Brand Building

**Visual Identity**

The visual system that makes your brand instantly recognizable:

*   Logo: Nike's swoosh ($39.1B brand value) works globally without words
*   Color palette: Coca-Cola Co.'s ([KO](https://www.investopedia.com/markets/quote?tvwidgetsymbol=KO)) ($64.4B) ownership of red in beverages
*   Typography: Apple's ($241.2B) clean, modern font reflects their design philosophy
*   Product design: Mercedes-Benz's ($28.5B) distinctive grill and star

**Verbal Identity**

How your brand sounds and speaks:

*   Brand voice: The Walt Disney Company's ([DIS](https://www.investopedia.com/markets/quote?tvwidgetsymbol=DIS); $61.3B) warm, family-friendly tone
*   Communication style: Goldman Sachs Group, Inc.'s ([GS](https://www.investopedia.com/markets/quote?tvwidgetsymbol=GS); $8.9B) tone of authoritative financial expertise
*   Customer service language: Amazon.com Inc.'s ([AMZN](https://www.investopedia.com/markets/quote?tvwidgetsymbol=AMZN); $135.4B) emphasis on providing solutions
*   Key messages: BMW's ($25.9B) "Ultimate Driving Machine"

**Experiential Elements**

How customers interact with your brand:

*   Service protocols: Starbucks Corporation's ([SBUX](https://www.investopedia.com/markets/quote?tvwidgetsymbol=SBUX); $17.8B) personalized ordering system
*   Digital interfaces: PayPal Holdings, Inc.'s ([PYPL](https://www.investopedia.com/markets/quote?tvwidgetsymbol=PYPL); $11.3B) emphasis on security and simplicity
*   Product functionality: Microsoft Corporation's ([MSFT](https://www.investopedia.com/markets/quote?tvwidgetsymbol=MSFT); $162.9B) integration across devices
*   Employee contact: Home Depot Inc.'s ([HD](https://www.investopedia.com/markets/quote?tvwidgetsymbol=HD); $19.2B) expert staff assistance

### Investment and Resources

Building brand identity requires significant resources:

*   [Marketing](https://www.investopedia.com/terms/m/marketing.asp) budget: Typically, 5% to 15% of revenue for established brands
*   Team structure: Brand management, design, communication specialists
*   Technology: [Customer relationship management](https://www.investopedia.com/terms/c/customer_relation_management.asp) systems, social media tools
*   Training: Employee onboarding and ongoing brand education

## Branding Identity Best Practices

1\. **Clear Positioning**

Define exactly where you sit in the market. Hermès ($21.6B) positions itself as the ultimate luxury brand, justifying prices well above competitors.

2\. **Matching Operational Capability**

Ensure you can deliver what you promise. Amazon Prime's two-day delivery promise required massive infrastructure investment before it could be marketed.

3\. **Employee Training**

Staff must embody the brand. Disney's theme park employees undergo extensive "Disney University" training to maintain consistent guest experiences.

4\. **Touchpoint Consistency**

Every interaction matters. Apple's brand value ($241.2B) comes partly from consistent experience across retail stores, website, packaging, and customer service.

5\. **Monitoring Performance**

Companies track their brand's health through the following:

*   Customer satisfaction scores
*   Market share data
*   Social media sentiment
*   Price premium versus competitors
*   Employee satisfaction rates

## Common Branding Pitfalls

1\. **Inconsistent Execution**

When brand elements don't match across channels. Example: A luxury brand using premium packaging but having a poorly designed website.

2\. **Promise-Capability Gap**

Making claims you can't deliver. Tesla, Inc.'s ([TSLA](https://www.investopedia.com/markets/quote?tvwidgetsymbol=TSLA)) self-driving promises versus actual capability have affected trust.

3\. **Insufficient Training**

When employees don't understand or can't execute brand standards. Example: High-end retailers where staff don't provide luxury-level service.

4\. **Failing to Adapt to Market Shifts**

Not evolving with customer needs. Kodak's decline came from holding onto film too long despite digital photography's rise.

5\. **Surface-Level Focus**

Overemphasizing logos and ads while neglecting customer experience. Many retailers invest in store appearance but underinvest in staff training.

## United Airlines: Brand Identity in Context

When United Airlines Holdings, Inc. ([UAL](https://www.investopedia.com/markets/quote?tvwidgetsymbol=UAL)) emerged from the pandemic, it didn't just do a periodic update to its logo—it transformed its customer experience, from social media responses to text message updates. United's post-pandemic transformation offers valuable lessons about both the power and limitations of brand identity.

In 2022, the airline launched its "Good Leads The Way" campaign alongside a complete overhaul of its customer experience. United put together a 35-person social media team, changed its customer communication strategy, and invested heavily in making its brand more responsive and customer-centric.

"Gone are the days when we just have two big advertising pushes a year," Maggie Schmerin, United's head of global advertising and social media, said at the time. "We’re all about how we can be relevant and do a better job in social media and advertising."

The results seem to have worked: By 2024, premium revenue was up 10%, corporate revenue was up 7%, and revenue from its basic economy seats was up 20% year-over-year. Customer satisfaction scores improved significantly, and their app became the most downloaded in the industry.

However, United wasn't alone among airlines in seeing major revenue increases in recent years. How much can be chalked up to a renewed focus on its brand identity instead of structural changes in the industry or improvements that customers can see?

United CEO Scott Kirby suggested it was all three. "United had a unique strategy coming out of COVID-19, and our people have delivered for customers, leading to a structurally and permanently changed industry," he said.

This nuanced view suggests that while a strong brand identity alone rarely drives success, a weak brand identity can certainly limit it.  

## The Bottom Line

The most successful companies treat brand building not as a separate marketing function, but as an integral part of their overall business strategy. A brand identity can be one of a company's most valuable complex assets.

While top brands like Apple ($241.2B) and Alphabet Inc. ([GOOGL](https://www.investopedia.com/markets/quote?tvwidgetsymbol=GOOGL); $207.5B) demonstrate the enormous financial potential of strong brand identity, their success comes from aligning brand promises with delivering services and products their customers want in markets that can change frequently.  

> **Article Sources**
>
> 1.  The Open University. "[Defining What a Brand Is](https://www.open.edu/openlearn/money-business/marketing-the-21st-century/content-section-3.2)."
>     
> 2.  L'Oréal. "[L'Oréal Group: Strategy & Model](https://www.loreal.com/en/group/about-loreal/strategy-and-model/)."
>     
> 3.  Forbes. "[Most-Valuable Brands](https://www.forbes.com/powerful-brands/list/)."
>     
> 4.  Harvard Business Review. "[How Brand Building and Performance Marketing Can Work Together](https://hbr.org/2023/05/how-brand-building-and-performance-marketing-can-work-together)."
>     
> 5.  The Verge. "[The False Promises of Tesla's Full Self-Driving Capabilities](https://www.theverge.com/2023/8/23/23837598/tesla-elon-musk-self-driving-false-promises-land-of-the-giants)."
>     
> 6.  Skift. "[United Airlines Makes Major Advertising Comeback in 2022](https://skift.com/2022/12/22/united-airlines-makes-major-advertising-comeback-in-2022/)."
> 7.  Ad Age. "[2022 Best Marketers: United Airlines](https://adage.com/article/special-report-marketers-year/2022-best-marketers-united-airlines/2453756)."
>     
> 8.  United Airlines Holdings, Inc. "[United Airlines Achieves Record Fourth Quarter Profit Well Ahead Of Expectations](https://www.united.com/en/us/newsroom/announcements/cision-125362)."
>     
> 9.  StockStory. "[Travel and Vacation Providers Stocks Q4 Results: Benchmarking United Airlines (NASDAQ:UAL)](https://stockstory.org/us/stocks/nasdaq/ual/news/earnings/travel-and-vacation-providers-stocks-q4-results-benchmarking-united-airlines-nasdaqual)."