Every so often, someone will raise the issue about why branding matters. I think this analogy helps illustrate the absolute necessity of branding.

In the good old days, if I owned the town’s blacksmith shop and your horse needed a shoe, you came to me. Why? I was the only one in town. It didn’t matter if my shop wasn’t very clean or even if you thought my prices were a little steep. I was the only place you could get what you needed. So you became my customer.

How might that have been different if there were nine other blacksmith shops along the same town square? Assuming we all were reasonably skilled and offered the same array of services and products. Now you have a choice. Suddenly, the cleanliness of my shop and the prices I charge make a difference, don’t they?

Fast-forward to today. In today’s marketplace, no matter what we sell or do, there are nine other blacksmiths right there along with us. We don’t like to admit it, but basically our competitors are competent. Odds are, their prices are in the same ballpark as ours. So how does a consumer decide?

As marketers, we have two choices. If we want to be competitive in the marketplace, we can either differentiate ourselves from the competition (in other words, brand ourselves) or we can be the cheapest. And I would contend that even being the cheapest is making a brand choice. Like Wal-Mart, you’ve defined your brand as being all about low prices.

If you can’t tell the consumers why your blacksmith shop is different and a better fit for them than your competitors, you’d better hope you’re the cheapest. And how many of you really want to be the cheapest?

Drew McLellan is Top Dog at McLellan Marketing Group and the author of “99.3 Random Acts of Marketing.” He can be reached at Drew@MclellanMarketing.com.