The first problem is one of basic definition. What exactly is branding? What is positioning? The second problem is one of application. How do the two interrelate? How important are they to the success or failure of a particular company?

Simply defined, branding is the process by which a company or product name or image becomes synonymous with a positive impression, e.g. trustworthiness, predictable quality, performance, etc. Brand equity (the value associated with a brand) is built over a long period of time through communication vehicles, such as, television, radio or print advertising. When it works properly, branding results in an “auto-pilot” kind of purchase.

For example, consumers who automatically buy Crest toothpaste or Charmin bathroom tissue, without even looking at competitive products, have internalized their purchasing to the point that it is no longer a decision. This is great news for the makers of those products because they don’t have to invest a lot of time and money in convincing the consumer to try their product. The battle has been won.

"The brand is the covenant between you and the consumer," says Bob Mazerov, president of Colorado-based, strategic marketing and consulting firm Mazerov Research. But he is quick to add that proper positioning must be done before you achieve that covenant. "Branding is taking your position to another level, and making it stand for something."

Positioning is very much a real-time, people-intensive effort and helps define who and what a company is and what it does. Positioning draws its strength from person-to-person communication rather than media-intensive mass communication. Positioning explains where a company fits into the marketplace, what it has to offer that is unique, and why people should care.

"Positioning is getting your customer to buy your product. Branding is getting your customer to live your product," says Clare Price, CEO of Verstand, a California-based provider of brand-value management software. Price agrees with Mazerov on the concept of the covenant, but she phrases it a bit differently. "You are promising the customer that you will be able to do what you say you can do. For example, when I buy Tide, I expect to get clean, fresh smelling clothes," she says.

A laundry detergent like Tide has a specific brand promise of clean clothes. But the consumer-products industry (of which Tide is a representative product) on the whole still has some dirty linen when it comes to branding, says Brian Creath, president and CEO of Brand Maverick, a Missouri-based branding consultancy. Consumer-products companies have been fairly weak in fashioning the idea of a brand that encapsulates the customer’s experience, Creath claims. "The need to define a corporate brand is something that is just now coming [into play]," he says, noting that until now, consumer-products companies have been able to sweep the importance of company-wide branding under the rug.

As a result, consumers haven't really formed an idea of a Procter & Gamble, a General Mills, or a Ralston Purina brand experience outside of a specific product.

Sometimes, a company-wide brand is absolutely vital to success, because the company offers a single service or product that is indistinguishable from the company itself, according to Curtis Zimmerman, a partner in the Zimmerman Agency, a Florida-based marketing communication firm. "A brand cannot be something that is just conceptual; consumers want to know what's in it for them," he says, adding that the idea of relevance is crucial with regard to any positioning and brand-building exercise. "The positioning is where the relevance comes in."

Sometimes, if positioning does not keep pace with the momentum of a company or of a market, a brand can suffer severe damage. Take, for example, what's happened to the discount retailer Kmart in the past few months. The company lost market share to competitors like Wal-Mart and Target, laid off thousands of employees, closed hundreds of stores, and then filed for Chapter 11 (bankruptcy protection). In the view of Brand Maverick's Creath, although Kmart achieved strong first-mover status in the discount retail market, it never clearly articulated its positioning and its core value proposition. Therefore, its brand identity was somewhat weakened from the beginning. "Kmart had a lack of understanding of what [it was] about in the first place," Creath says. "At the end of the day, it stood for nothing."

Being able to measure the impact and, therefore, the value of marketing activities, has always been a major problem, according to Verstand's Price. Beyond that, making sure that positioning activities keep pace with market dynamics – and therefore the value of the brand – is of key importance, she maintains.

Beyond the problems with measurability, positioning and the brand have to be on the same page, Price maintains. "If the brand and the positioning being used to support it are out of alignment, it will have a negative impact on the brand," she says.

Rob Gelphman is principal of Gelphman Associates, an integrated marketing communications agency serving the high technology industry. Founded in 1993, the company’s purpose is to unite all of the elements of the marketing communications environment into a singular and cohesive messaging platform.