The most successful companies know that next to offering quality products and services a good brand identity is the most important part of gaining customer trust and confidence. However, a brand is not just an image that represents a particular product or service, it is also a conduit through which customers can construct an identity for themselves. Brand identity then, and the psychology behind it, is an indispensable part of good marketing.
A brand identity is forged by using marketing to associate certain values and emotions with a product. These values and emotions are usually picked based on what type of demographic the company is seeking to sell to. Lots of research is done every year to determine how different demographics respond to a given value and special care is taken to find out exactly how members of a given demographic self identify. The smart company knows that associating those values with which their target demographic self identifies with their product will make the members of that demographic more likely to respond positively to a product that is imbued with those same values.
This is basically how brand identity works. Associate your product with the same values as your target demographic and there is a higher chance of them feeling positive emotions towards your product. Practically speaking then, your first order of business in figuring out how brand identity can boost your business is to figure out exactly who you are marketing to. What are their likes and dislikes? Where do their anxieties and fears come from? What is it that makes them feel good about themselves? That last question is really the most important because once you determine that it is merely a matter of making sure the brand you are creating matches up. Further marketing strategy forms relatively easy afterwards.