The practice of using a brand name is the evolution of the ancient custom of branding one's belongings. Whether this meant making one's mark on clothing, pottery, smith's works, or livestock, it was designed to make it obvious which person or family owned specific items. Today's brand name works basically the same way. It is used to distinguish one product, especially a competing product, from another. In other words, it is a mark used to show ownership.

Drug companies deal with a lot of competition between their brand name medicines and generic alternatives. Often times, the generic is named for what is contained in the medicine. In regard to over the counter medications, a good example is aspirin. Any company can use the name aspirin on their packaging, but Bayer is a brand name.

When several companies market a similar product, it is important that the brand name be clearly seen on the packaging and easily recognizable. Competing manufacturers invest a lot of money and effort into making their brand name into a household name. Some companies try to imitate the brand name, logo, and packaging of competing companies in the industry, in an attempt to fool customers into buying their products. Such tactics are usually easy to recognize, and even if a customer is fooled once, it isn't likely to happen a second time.

More reputable companies marketing generic alternatives list the brand name on their package and ask consumers to compare their product to the brand name version. The generic product may contain the same amount of the same or similar active ingredients. If it is comparable in quality and lower in price, consumers may come to prefer it to the brand name product in some instances.

On the other hand, a brand name that has been around for some time, and is seen as reputable, will generally develop customer loyalty. Consumers will purchase the brand name product because they trust the company. They know the quality is good, and they won't have trouble obtaining a refund or replacement if for some reason the product is damaged or otherwise unacceptable.