Branding is a key component of 1:1 marketing. I'll write more about it later. The relevant point for now is that branding serves the long-term needs of company in the infoglut. Brands give people a familiar name, easing decisions in an overloaded marketplace. This works for not just shoes and ketchup but news, ideas, relationships. Once customers get to know (and like) the name/image, they'll buy more of what the brand/image sells. This is as true for Matador as it is for Disney or Microsoft.
There's a good article in the December issue of Fortune about how strong brand names may be "the ultimate competitive weapon." The article explains, for example, why Marlboro's decision to cut cigarettes by 40 cents a pack (in 1993) freaked out Coca-Cola and other huge companies that don't have much to do with tobacco.
While major brands often discount their goods, Marlboro's move in particular sent a message to investors that brands were "on the ropes." A couple years ago, marketers were up in arms over the success of private-label goods (cut-rate, house-label products). As the article explains, they needn't be. While private-labels do pose a threat, in an increasingly info-dense culture, consumers will turn to known brands. Maybe that'll mean that more cheap alternative goods will be branded. Maybe that'll mean Proctor & Gamble will--like the President's Choice and Grand Union line of groceries and Disney and Fox and Bloomberg--start calling more of it's products the same thing. Who knows.
