Advertising plays a vital role in your business. You can attract customers by advertising your products and show them how better and more economical they are as compared to other competitive products available in the market. Branding plays an important role in advertising.

There are companies that are known by the products they manufacture and market. They have established an image that these are the best or only products available in the market. The image created by them is so pronounced that even the products produced by their competitors are also known by the same brand.

Take an example of Xerox. Whenever you think of taking photocopy of any document, you think of Xerox. The photocopies even if they are taken out on some machine of another brand are often called ‘Xerox copies’. Another such example is of Walkman. All portable cassette players from any brand are being termed as walkman even though the original name was coined as a brand name of a model by ‘Sony’.

These are examples of product branding. There are some companies also that have developed their reputation as a brand. Take the examples of McDonald or Wal-Mart. These are chain of service providers and their unique business models have earned them the brand name.

Creation of brand helps generate huge volumes of business. While advertising also, just a mention of the brand name with some message having even a slight relevance to the product is enough. Once a brand is created and has become popular, it sometimes gains in value as Brand Equity.

It carries values in millions of dollars. The market value of the shares of the company that owns the brand lifts up many folds. It is understood that the company will be able to generate more business as compared to competitors whereby increasing its profitability.

However, creation of a brand and subsequently maintaining it is a Herculean task. Widespread advertising is required for building up a brand and the company should be careful in fulfilling every promise or claim made to the customers in those advertisements.

You have to maintain stringent standards of quality and even a slightest error can give bad name to the brand. Even a smallest incident can result in a lawsuit, which will attract wide publicity and subsequently tarnish the name the brand has earned.