What is 'Brand Awareness'

Brand awareness is the degree of consumer awareness of a brand and its related products. Creating brand awareness is one of the key steps in promoting and marketing a product. Brand awareness is particularly important when launching new products and services. It allows a company to differentiate themselves from similar competitor offered products and services.

BREAKING DOWN 'Brand Awareness'

Products and services that maintain a high level of brand awareness are likely to generate more sales. Consider the soft drink industry in which many soft drinks are indistinguishably similar. Companies, such as Pepsi and Coca-Cola, use their brand to showcase their products and drive sales. Over the years, these companies have employed strategies to increase brand awareness among consumers, which have directly translated into higher sales. This higher rate of brand awareness typically serves as an economic moat which prevents competitors from gaining additional market share.

Creating Brand Awareness Using Social Media

As of 2017, Internet users spent approximately 135 minutes (2.25 hours) per day on social media sites. As a result, companies find great value in generating brand awareness on these platforms. Consumers discuss products and services of interest and those that have overwhelmingly satisfied their specific needs and desires.  

Alternatively, consumers also share unfavorable experiences, and often at a higher rate than satisfactory ones. Therefore, stimulating consumer interest and promoting the brand is a strategic process. As consumers view and interact with social media posts and updates, brand awareness will increase. For brand awareness to be most productive, consumers should be able to connect to the company's website seamlessly from the social media platform. Also, it is crucial for a company to respond to negative reviews and offer a solution to the customer's problem.

Other Ways to Create Brand Awareness

Although print media is not as prominent as it once was, there are still consumers who read newspapers and magazines. Advertisements placed strategically, such as in targeted locations on the page or in specific publications, can attract viewer’s attention and create brand awareness. For example, a new company who will be trading on the Forex (FX), may advertise in a prominent magazine which focuses on global trade and currencies to create brand awareness with investors.

Displaying a product or service advertisement at a physical location can create or enhance brand awareness. Impulse purchase products are well-suited for in-store distribution and advertising. A company marketing a new candy bar may distribute the product at a point-of-sale (POS) location to create brand awareness.

Sponsoring public events is another effective way to create brand awareness. Charitable, sporting events and social awareness fundraisers allow for prominent visibility of a company's name and logo. For example, a health insurance company may increase brand awareness by distributing complementary company-branded health packs at a charitable marathon. Participants associate the company with acts of goodwill and as a member of the community, which further raises awareness of and promotes the brand.

RELATED TERMS
  1. Brand Management

    Brand management is a function of marketing that uses techniques ...
  2. Brand Recognition

    Brand recognition is the extent to which the general public (or ...
  3. Brand Personality

    Brand personality is a set of human characteristics that are ...
  4. Brand Potential Index (BPI)

    The brand potential index (BPI) is the correlation between a ...
  5. Social Sentiment Indicator

    A social sentiment indicator analyzes aggregated social media ...
  6. Brand Piracy

    When a product is named similarly to a well-known brand so that ...
Related Articles
  1. Small Business

    Well-Established Brands Worth Billions

    We look at the most valuable brands in the world, and explain what makes them successful.
  2. Small Business

    9 Brands Resurrected Into Household Names

    All of these brands saw a dip in their popularity, only to have a revival to even greater heights.
  3. Financial Advisor

    Top Tips for Creating a Financial Advisory Brand

    A properly constructed brand can help capture more business. Here are some tips to achieve that goal.
  4. Financial Advisor

    How Financial Advisors Are Leveraging Social Media

    As financial advisory clients are increasingly turning to social media, wealth managers who aren't following suit risk being left behind.
  5. Small Business

    Social Media In The Workplace

    Instead of it being taboo, we explain why this might actually be a good thing.
  6. Small Business

    Reinventing Brands: Makeover Or Move Over

    Brands undergo various changes to remain competitive. Discover those that changed and those that fell behind.
  7. Investing

    Tech Titans Top The List of Most Valuable Global Brands

    WPP and Kantar Millward Brown are out with their global brand rankings which shows Google, Apple, Microsoft, Amazon and Facebook are at the top.
  8. Investing

    I Saw the Future at CES 2017, and All Your Behavior is For Sale

    Technology being used to learn what to sell you is not a matter of whether or when, but of which app.
  9. Investing

    Brands Develop Strategies to Counter Amazon

    Retailers are offering incentives to customers to shop at physical stores. Will this affect Amazon's bottom line?
  10. Personal Finance

    Amazon's Big Branding Problem (AMZN)

    Amazon can be inconsistent with its branding policies which can alienate confused customers. The company should simplify or strengthen its four core brands.
RELATED FAQS
  1. What are some of the benefits of positive brand equity?

    Learn how having positive brand equity enables companies to make a higher margin on sales and spend less money on marketing ... Read Answer >>
  2. What impact does brand equity have on profit margins?

    Learn how both positive and negative brand equity affects profit margins by influencing profit per customer, sales volume ... Read Answer >>
  3. How do tangible and intangible assets differ?

    Tangible assets are physical assets that are used in a company's operations. Intangible assets are nonphysical, long-term ... Read Answer >>
  4. How does Twitter make money?

    Learn how Twitter earns revenue, including how the social media company uses three targeted advertising streams, data farming ... Read Answer >>
Hot Definitions
  1. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  2. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  3. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  4. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  5. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  6. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
Trading Center