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Talk to entrepreneurs about their marketing and communications efforts, and they'll often use the words "branding," "marketing," and "advertising" interchangeably. That reflects the pervasive confusion about the terms, says Gail Guge, managing partner of Wilkin Guge Marketing in Ontario, Calif.. "About 15 years ago, 'branding' became a buzzword in the business vernacular, and people still get the words mixed up all the time," she says.

That confusion is unfortunate, because understanding the concepts and how they mesh is vital to every company's bottom line. Studies show companies that market their products or services without first establishing their brand identities are not likely to achieve return on investment. "If you're spending money to advertise and market without being connected to a brand position, you might as well pile the money up and burn it," Guge says.