Brand Awareness

Brand awareness is a marketing term for the degree to which consumers recognize a product by its name. Ideally, consumers’ awareness of the brand may include positive perceptions of the qualities that distinguish the product from its competition.

Creating brand awareness is a key step in promoting a new product or reviving an older brand.

How Brand Awareness Works

Products and services that maintain a high level of brand awareness are likely to generate more sales. Consumers confronted with choices are simply more likely to buy a name brand product than an unfamiliar one.

Consider the soft drink industry. Removed from their packaging, many soft drinks are indistinguishable. The giants in the industry, Coca-Cola and Pepsi, rely on brand awareness to make their brands the ones consumers reach for. Over the years, these companies have employed advertising and marketing strategies that have increased brand awareness among consumers, and that has directly translated into higher sales.

This higher rate of brand awareness for dominant brands in a category can serve as an economic moat that prevents competitors from gaining additional market share.