The brand image refers to the way a market as a whole views a given company or product. Many companies attempt to create a strong brand that people identify with a given product. Some of the best examples of this include Xerox, whose name has become synonymous with making a copy, and Kleenex, whose name has come to mean "tissue" in general.
In addition to desiring to create brand recognition in general, most companies also want their product or company to have a specific image or to be looked upon in a certain way. This brand image can shape how they release a product, the type of product they released, the type of advertising they do, and the type of customers they cater to.
For example, a company may decide it wishes to have a brand image as a luxury brand. In such cases, it would cater to a high end market. Its products would be priced at an expensive price point, it would advertise only in high end magazines and it would be sold only in boutiques or high end stores, not at discount warehouse stores or outlet locations. Rolex watches, for example, have done a good job of creating an image as a high end and expensive brand, and as such people will pay a premium to purchase these watches because of what they stand for.
Another company may take a different tactic and decide it wants to highlight value as its brand image. Wal-Mart, for example, promises that customers can "Save Money and Live Better." It is not trying to create a luxury image, but is instead trying to position itself as an option for the budget conscious family.
Choosing a brand image is very important for a company, so that the corporate entity can appropriately target its market. Choosing too many different images or trying to represent too many different things can create a problem for a company. For example, if the company tries to target itself as both a luxury item and as a discount brand, then it will not have a clear-cut marketing strategy. Since there would be no target market for such a product since the luxury market wouldn't want a discount item and the discount market wouldn't want to pay luxury prices, the product might find itself a failure as a result of the muddled image it was presenting to customers.