Summary of Chapter 1

The first chapter deals with the emergence of the term branding. At the beginning in the 1880s, the company's main focus lays on manufacturing their products and promoting them as necessities that are lifechanging. However mass production leads to the fact that everyone can produce identical products which requires companies to create an image around their products to be more diverse from the other competitors. Companies like Nike realize that marketing trend early and become pioneers in executing this idea called ''branding''. This trend about creating a brand that appeals to the customer's lifestyle keeps going and reaches its peak when in the 1980s the company KRAFT is sold for 6 times its value. This example of KRAFT shows that the idea of a brand is much more worth than the actual product that a company produces. So due to branding companies keep spending more and more money on advertisement, having finally realized that the brand is more important than the product. However, inexpensive products make life hard for brands. People find it hard to stay loyal to a brand when they can get the same service for a better price from a cheaper provider. As opposed to Malboro who really suffered from competing with inexpensive product providers, Nike doesn't experience a decline in profits and brand loyalty. That's because Nike really understands to apply the idea of a brand not only to the product, but also to the very fabric of the company (''branded to the bone''). So this again illustrates the importance of a brand and its impact on peoples' conscience.