For consumers:

- identify the source or maker of the product

- simplify product decisions

- lower the search costs for products

Brands signal product characteristics and attributes so that products can be classified as:

- search goods (attributes can be evaluated prior to purchase: furnishing)

- experience goods (attributes can be evaluated after the purchase: meal at a restaurant)

- credence goods (even after purchase/ use the attributes cannot be evaluated: doctor's appointment)

Brands reduce risks in product decisions, which are:

- functional risks (branded TV reduces the risk of the TV not working)

- financial risks (borrowing money from a know bank, not from a stranger)

- social psychological risks (brand is not cheating on you)

- time risks (risk of wasting time)

- physical risks

For companies

- brand provides a powerful means to secure competitive advantage

- provides predictability and security of demand

- offer the firm legal protection for unique features

- simplify product handling and tracing