Great question. I am going to look at it with two hats on.
First hat: someone sells branding to clients
From this perspective I always tell clients you are living in a world of product parity. If any of you have seen the movie Paycheck with Ben Affleck where he is a reverse engineer or the clip of Borat in the US asking a store manager about cheese, you will see what I am talking about. The products are very similar if not the same. In the UK the supermarket brands products are often made by the branded products manufacturer. So no difference. But what you sell is an emotional connection .... not a product function. Nike sell that you are going to be a better athlete.... not that their shoes are better. They have taken this even further by giving you greater tools to do it with Nikeplus, tie ins with iPod, technology etc. Brillant. But what is the real difference in the shoes. I would argue there are better functional shoes for running on the market. But I would buy Nike.
Hat two: the angle from of a person buying into brands.
With a huge strive for people to identify themselves, brands act as scrapbook in the search for their social identity. Kids are all over social networks like myspace/bebo because it gives them an opportunity to express who they think they might want to be(research I have seen shows they dont quite know yet. People in their early 20's are trying to show people who they think they are). Brands do that across all ages..... and help people link with communities of likeminded people. People link with likeminded people everywhere, sports clubs, hobbies now online... so seeing a commonality in the brands people use is also becoming bigger. I wear this shirt or those jeans...and look some of my friends do as well. Look at Harley Davidson riders, or Mac Computer users(before the iPod)... or people waving to VW Beetle or Mini drivers waving to each other.
Where its now getting really interesting is the growth of mass inclusive brands like amazon, ebay etc. Which are built from the mass collective of people. Not because of a big company did a great marketing campaign that everyone liked. Take my relationship with Fast Company. I sat waiting for a friend in his agency once in Australia and started reading it. A friend that worked there, who I respect raved on about how great it was. I started reading it regularly and loved it. I aspired to be an entreprenaurial, innovative, leader with great management techniques and understanding of technology. I shared it with my friends who are simialr to me. I hang out and write here because I want to be with likeminded people which fast company has brought me online.
Now the best bit is trying to show the old brands how to do it in the new way.
Heres my notes on some of it here
thanks for the great post