The brand development process

Your brand is one of the most important assets in your business. It is the way your consumers perceive who you are and what you do, and how they differentiate you from your competitors. In this guide, we share the five key steps of the overall brand development process and share key tips to make the process run more smoothly.

Brand development process

How this guide raises your game

  1. Understand the value brands add to your business
  2. Understand 5 key steps in the brand development process
  3. Learn key tips on how to manage the brand development process

The dictionary definition of a brand is simple.

‘A type of product manufactured by a company under a particular name’. 

But ask most marketers and they will tell you this definition is too simplistic. The name of the brand is clearly important. But there are many more factors to consider when you create and manage your brand. 

The brand development process 5 key steps

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Take the 2 minute, 5 question Three-brains brand development process quiz and see how much you know about the brand development process already.

For consumers, your brand helps them to …

Strong brands return more value to the business because …

What is the first step in the brand development process?

The process where your market analysis and brand purpose come together is called segmentation, targeting and …

Why is it important to have a clear brand owner?


Factors like the logo, the packaging, and the customer experience help consumers to identify and find your products and services.

Your advertising, your copywriting and graphic design, your website and many of your other communication activities will influence how consumers perceive your brand. Who you are and what you stand for.

If those activities which represent your brand are relevant to them, then they are far more likely to choose you over competitors.

Your brand then is how consumers identify, evaluate and differentiate your products and services.

So your brand is more than just a name. It’s all the associations that go with the name too.

The brand development process is a basic building block of your marketing skills. It’s important to make it work well so you can be more confident you will hit your business goal.

But before we cover the process, we should first look at why brands matter. What is the extra value that they can offer to your business?

Why brands matter

There’s a lot of evidence to show that strong brands drive overall company performance. Look at this Brand Z study from Kantar Millward Brown for example.

This study tracks the market value performance of “Strong Brands” against the average of the S&P 500 and against the MSCI (a global weighted average of all stocks). You can see that as far back as 2007, strong brands deliver superior value and shareholder return over a longer period of time.

In this case, the return on $1 invested in a ‘strong brand’ company would be almost four times higher than that invested in the ‘average’ company.

This extra return from strong brands is driven by two key factors.

Firstly, the price that the consumer is willing to pay for a ‘strong’ brand. 

And secondly, strong brands occupy more space. That can mean physical space such as in store or on an online shop. Or it can also mean more awareness of the brand name. 

This means that strong brands are (a) more likely to be chosen the first time and (b) more likely to be chosen as a repeat purchase.

Let’s look at a couple of category examples to bring this to life. 

Example : Kitchen towels

(source : Woolworths online)

In this first example, we chose a category where the basic product is quite similar in terms of functional benefit and raw ingredients. All these products clean up kitchen spills and are made from paper.

It’s also a product category that’s quite functional. There’s no strong emotional attachment behind the category. You literally throw the product away after use. 

So you would think based on those three facts alone, that the price consumers would pay would be similar for all products in the category. 

Clearly, not the case though.

Look at the price comparison per 100 sheets that sits next to the actual purchase price of the product. The range is actually very wide. 

The price per 100 sheets varies from $0.85 (the Woolworths own label Essentials pack) up to $2.44 (the Handee Ultra). The Handee product costs you almost three times as much per sheet as the Essentials product. And yet, it pretty much performs exactly the same task.

Screenshot of kitchen towel category at woolworths online

The power of the brand

That’s down to the power of the brand that has been created in Handee.

Even if you strip out the own label product, the other products range in price from $1.79 up to $2.44, so you still pay more than a third again premium for Handee on the second cheapest available product.

Consumers make many judgements about the “value” of products over and above the functional benefits it delivers.

In this case, consumers who pay for the most expensive product may feel it will last longer. Or is better for the environment. Or will soak up spills better. These are all examples of brand assets that exist in the category. 

Example : Bottled water

(source : Coles) 

Let’s look at an even more striking example. In this case, bottled water in Coles.

Among these twelve products, you can pick up the Frantelle at $0.76 per 1L. But you could also pay $8.33 per 1L for the Voss Artesian Still water.

But functionally, these are the same essential product (H20). They also satisfy the same functional need. To relieve thirst.

But the power of the brand created by Voss drives a more than tenfold premium in the price between the cheapest product and the most expensive. 

Screengrab of bottled water category at Coles online

Think of any category – cars, computers, insurance, clothing – and you’ll see a common thread where ‘stronger’ brands are able to charge a premium over competitors because they know that consumers will be willing to pay the extra.

This is not to say that “strong brands” necessarily mean “expensive brands”. There are many strong brands that play in the middle of the price range. Look at Kleenex in the kitchen towel example or Evian in the bottled water example. But you do see a consistent trend in almost every category between strong brands and price.

Strong brands build a price premium that consumers are willing to pay

When products have similar functional benefits, it’s often the intangible perceptions of the brands that drive the purchase decision. And make consumers not always be driven by the cheapest product available. 

Strong brands also often have less need to run price discounts and promotions to generate sales.

They might run a promotion if they need to drive trial. Especially with new consumers. But they know that loyal consumers will buy the brand no matter the price. So they only use price promotion tactics for short-term objectives.

Long-term, strong brands do not rely on price promotions. 

The first key take-away on why brands matter then is that consumers pay more for strong brands.

This leads us on to the second area of why brands matter. Strong brands take up more “space” in the mind of the consumer and when they make their purchase decision.

Let’s look at another couple of online grocery examples.

Example : Breakfast cereal

(source : Woolworths)

In this example, these are the first twelve products you see when you go to the cereals “aisle” at Woolworths online.

We can see eight Kellogg’s products, three Weet-bix products and an advert for Nestle.

There are 129 products in total available in the cereals category, but data that tracks shopper behaviour shows that most consumers do not review all the choices available. These twelve choices would normally be enough for most people. Unless they were looking for something specific. 

With 129 choices, there is literally TOO much choice. This is a phenomenon known as Choice Overload. In fact, the famous “Jam experiment” where consumers could choose from a small selection or a large selection of jams in a store showed that less choice is more likely to drive a purchase decision.

Too much choice overwhelms people and they walk away.

A choice of around 7 options plus or minus 2 seems to be around the optimal amount to drive consumer decisions. This goes back to famous psychology experiment in the 1950s by Harvard Professor George A. Miller. 

Breakfast cereal Woolworths online

The important point from a brand point of view is that if you are the market leader, you can use that fact to maximise the space you take up in a physical or online store.

You can keep smaller competitors out or push them to the sidelines. You make sure your products dominate the “seven” choices that the consumer can handle.

It’s often easier from a consumer point of view to pick from the trusted / valued brands they know than invest the time to research or choose something different.

Example : Toothpaste

This habitual repeat purchase behaviour creates loyal consumers for brands like Kellogg’s and Weet-bix in breakfast cereals or Colgate and Sensodyne the very similar toothpaste example below.

In the toothpaste example, there are only two choices available so these brands clearly dominate the space and keep any other brand out from appearing. This again is down to the power of the brand. 

Toothpaste category at Coles online

That’s not to say other brands cannot compete against the market leaders in those categories. But it does make the job more of a challenge. As a challenger brand, you need to find a way round this entrenched consumer behaviour.

Consumer choose brands they trust / value because it’s just easier for them to do. In many categories, they habitually buy the same thing over and over.

This consequence of repeat buyers and loyal consumers is the other key area where strong brands add value. This shopper behaviour drives sales and profit. 

So, if the price premium and creation of loyal repeat customers are the outcome of creating a strong brand, where do strong brands actually start?

For that, let’s move on to the brand development process itself. 

The brand development process 5 key steps

The brand development process

There are many views on the best ways to create and develop brands. From academic marketing books to the powerpoint decks of agencies and consultants, there’s no single process that works for everyone. 

However, most of the processes will follow a similar flow. They will have the same underlying logic,  even if they use different words. For us, these usually consist of 5 key steps which we outline in the process below. 

Step 1 :  Analyse your market.

Your aim in this step is look for opportunities and issues. Opportunities include consumer needs that are not being met. Or where are being poorly met by competitors. Issues could be with how consumers currently perceive your product or service. The information for this type of research either comes from talking directly to consumers (with qualitative or quantitative research) or from secondary research.

As we covered in our guide on the link between market research and the marketing plan, this information gathering and analysis is the end of one process – market research. But it is also the start of a new one – the brand development process. 

Step 2 : Define your brand goal

Your brand goal is defined through  your brand purpose and vision. 

Brand purpose

Your brand purpose is your brand’s reason for being. Why does it exist? 

This could be as simple as “make money”. But there is an assumption that every business needs to make money. So the purpose is usually at a higher level. It is usually a more motivating view around changing attitudes or behaviours amongst a group of consumers.

It’s sometimes also called a brand mission. What is it your brand is trying to do?

Look at Starbuck’s for example. Their purpose / mission is to “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

Or look at Apple’s mission statementto bringing the best user experience to its customers through its innovative hardware, software, and services.” ).

These types of statements define what it is the brand does and what it stands for. So, for Starbucks they set the focus on the individual and community connection of their stores. For Apple, they set the focus on customer centricity and innovation and design.

Now, not every business aims to be as world-changing as these huge businesses. But the clearer you are able to articulate the brand purpose, the easier it is to prioritise and plan the activities that are needed to deliver that purpose.

So Starbucks CAN clearly look at expansion in overseas markets based on its purpose. But it probably wouldn’t looked to expand into an adjacent category like soft drinks because it doesn’t fit the purpose.

Apple CAN look to add improvements to its operating system because that fits the purpose, But it might resist the opportunity to push hard on selling a bunch of Apple branded T-shirts because they wouldn’t fit the purpose.

So your brand purpose makes it clear to consumers what you do and don’t do. It informs decisions you will make on brand identity and brand activation

Starbucks logo

Brand vision is about the future

A logical follow-on to the brand purpose is the brand vision. This is more around painting a picture of what the future looks like for the brand. Where the purpose is what the business does now.

It can be a description or a image or a video that brings to life what the ambition of the brand is in 3 to 5 years time. And in some businesses even further out than that.

As global branding expert, Professor David Aaker states, it is

ideas behind a brand that help guide the future  … it reflects and supports the business strategy, differentiates from competitors, resonates with customers, energizes and inspires employees and partners, and precipitates a gush of ideas for marketing programs.”

Step 3 : Segment, target, position

This is where you bring together your analysis of the market and the potential audience and the goals you have set your brand. You start to tighten and define what it is you will actually do.

This part of the process has three key steps.

First you look at the total market and segment consumers into groups based on common attributes or needs they share.

You then look at the relative attractiveness of each segment and prioritise and target the segments that you feel offer the best fit to your brand purpose and vision.

Archery target with arrows to symbolise target audience

And then you start to build out the position you believe your brand needs to occupy in the minds of its target audience to be able to deliver against that goal. This is done through the creation of a positioning statement.

We cover the process of segmentation, targeting and positioning in it’s own separate skill guide.

Step 4 : Brand identity

Your positioning statement then becomes the core of your brand identity.

This brand identity becomes a working document and library of how to build and create your brand.

It serves as a guide to ensure consistent delivery across all activity that your brand undertakes. It includes the values of your brand, it’s personality and the key tangible assets that define what the brand is and does.

These brands assets are a collection of visuals, sounds and words allow a consumer to identify your brand.

Brand identity

These brand assets are like the DNA for your business. They define how your brand should look and feel. They define what it should sound like. And they guide what you want people to think about your brand.

The creation of the brand identity we cover in it’s own skill guide here.

Step 5 : Brand activation

Once your brand identity is “built”, this informs all brand activation decisions. There are two steps to your brand activation, the marketing plan and then the specific activity briefs and performance measurement that you that you do over the course of the year. 

We cover the basic steps of brand activation here and have more detailed guides on key areas like Communications and Digital Marketing which come with their own tactical challenges.

Final point on the brand development process and it’s an important one. Once you hit the end of the process, you need to set up a measurement system to see if it works. This sixth step in the process should take you back to the start again, as you analyse the market through measures and evaluation. 

These might be sales numbers, brand health tracking, customer feedback or digital data. But as your brand and your competitors play in the market, you by design change the nature of the market.

So, this new analysis of the market kicks off the process again. It drives any changes you need to make on your brand. 

Key tips to manage the brand development process

Tip 1 – Flex the process to fit your business

And not the other way around. 

Many agencies and consultancies make great claims about being the experts in branding.

However, in our experience, many of them develop a standardised approach to the brand development process. They will then force fit it on to all of their client’s businesses. 

We don’t recommend this approach. What works on one brand or in one industry will not always transfer to another brand or industry. Look for agility around how the process will be used. 

Bigger agencies will bring teams of consultants with the fees to match to craft your brand. If you are a huge global organisation, this brand work can run into hundreds of thousands of dollars,  as was the case with Diageo. The Diageo name was created from the Latin for ‘day’ and the Greek for ‘world’ and is now embedded in the company’s brand identity. But at the time, it received a lot of mocking press coverage for the expense in creating the name.

Our experience is that involving more people and spending more money don’t always lead to better results. 

You have to find brand experts who are flexible enough to adapt to you and your business. 

Ask them questions to make sure they can tailor their approach to suit your needs. Do they feel engaged and interested in you and your brand? Do you feel they have put in the effort to understand the challenges in your category?

When a brand is well-created it will become one of the most valuable assets in your business. So it is worth the effort to search for the branding expert who will be the right fit for your business. 

Tip 2 – Put yourself in the shoes of the consumer

While consumers choose brands, they do so because of what the brands can do for them. And in most categories, they are faced with a lot of choice.

As you build your brand, you should consistently have the consumers in mind.  What is it that  you uniquely can do for them? What is it you can do that will make you meaningful and distinctive? Why would consumers care about your positioning or your brand assets? 

If you can keep this consumer mind-set, it will stop you falling down the rabbit-hole that many businesses fall into when they try to create a brand.

Agencies can often have an insular view of the world. There can often be a lot of jargon and psycho-babble in what they say. While some of this may be helpful, it should not actually be what the consumer ever sees. 

Consumers look for the benefit that your brands is able to offer them. As has been classically pointed out by Theodore Levitt, “consumers don’t want quarter-inch drills, they want quarter-inch holes”. 

Keep this in mind, so that you don’t get too hung up on what you or your agency want for your brand and lose sight of that the consumer wants. 

Tip 3 – Have a clear brand owner

Our final tip is a much more pragmatic one. As you start to develop brand assets beyond the brand name and purpose, the need for someone to own decisions about the brand comes clear. 

There is a lot of decision making needed to develop brand assets.

Is this shade of blue more appealing than that one? Should the logo be in a circle or a square? 

Now, these sorts of decisions should be tested with market research. But ultimately, there should be a ‘brand owner’ who makes the final decision.

In bigger businesses this might be a brand manager or marketing manager. In smaller businesses it is often the owner or founder of the business. But someone has to be responsible for ensuring the consistency of the brand. To ‘own’ the brand.

This role becomes especially important when you start to work on the brand identity.

We’ve had too many hours wasted in the past arguing the difference between very similar sounding words. Is the brand ‘playful’ or ‘mischievous’? Is the brand ‘clever’ or ‘considered’? These sorts of semantic arguments happen all the time in the brand development process. But they slow the process down, and create frustration and disputes. 

This ownership and accountability when you have a brand owner helps speed up the decision making process. And it helps to have someone to resolve disputes and issues. We highly recommend this role is identified and made clear to everyone at the start of the brand development process. 

The brand development process

The brand development process summary

In this guide, we’ve covered why branding is important for your brand. Your ability to generate higher value, either in price or in loyal consumers can drive the success of your business.

We outlined the five key steps that most businesses go through to create brands and highlighted the importance of measurement to go back and continue to refine and define the brand.

And we closed off with three key tips on how to make the brand development process run more smoothly – find the right branding expert, think from the point of view of the consumer and have a clear brand owner. 

Three-brains and brand strategy

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