This is the closest, most concise and simple explanation I have seen regarding branding. Kristine Kirby Webster, President of The Canterbury Group, Ltd. (TCG) wrote this article for Marketing Profs. A must read:

What’s the Benefit of Branding Anyway?

Branding allows a company to differentiate themselves from the competition and, in the process, to bond with their customers to create loyalty. So a position is created in the marketplace that is much more difficult for the competition to poach. A satisfied customer may leave. But a loyal one is much less likely to.