A lot of people seem to be pretty confused about what a brand is.

A Gucci T-shirt sells for hundred times more than a Mr Price T-shirt. Why does this happen? Is it because a Gucci T-shirt is a hundred times better made, or made with materials worth hundred times more? Or is it because people perceive that a Gucci T-shirt is well, just worth a hundred times more to them than a Mr Price T-shirt?

The answer is that people perceive that the brand name Gucci adds value to a product over and above its intrinsic physical worth. In other words the brand name Gucci adds extrinsic value to a product. It is this extrinsic value that is the stuff of brands.

When measuring how brands are positioned in the minds of consumers, it is critically important to remember that the primary measures required are extrinsic, rather than intrinsic measures. If the brand is a motor vehicle it won’t help to attempt to measure the brand reputation using intrinsic measures like ‘has a steering wheel’, ‘has a driver’s seat’, ‘has an engine’ or ‘has brakes’. All of these measures are common to all brands.

The only measures that count are the extrinsic measures – ‘exciting to drive’, ‘latest technology’, ‘best safety features’, ‘beautiful looks’ and the like.

Successful brands are well differentiated from their competitors. Differentiation is the key to brand survival and growth. In just about every instance brand differentiation has its roots in extrinsic rather than in intrinsic consumer perceptions.