Similar to products and companies, cities also build their urban environments into brands. Just like consumers remain loyal to certain products, so do particular target groups recognize the brand built by an urban environment and develop loyalty to some of its features. The aim of this paper is to provide a semantic, logical and semiotic definition of the concept of branding, its meaning and the way the message is conveyed to target group members. The paper analyses important elements that make up a brand, types of brand, the effects (outcomes) produced by building a brand, and its successful or unsuccessful positioning on the market. Furthermore, it gives an overview of some of the methods of value assessment of the world’s most successful and powerful brands. The paper lays special focus on specific features of urban branding with regard to the fact that an urban environment is a geographic unit that cannot be offered as a product or service outside the geographic coordinates that position it in a particular space. It also provides an analysis of psychological and sociological factors on which the formation of image and reputation of an urban environment is based, as well as the specific competition between particular urban environments. In addition to this, it points to the possibility of cooperation based on social sensitivity as an important human characteristic. Based on the city of Bjelovar’s historical development, important characteristics and development strategy the foundation has been provided for carrying out an analysis and study of the needs and preferences of its inhabitants. The paper analyses the research previously conducted by the Croatian Bureau of Statistics, GfK Market Research Centre, Interbrand, Millward Brown, as well as the results of the survey carried out specifically for this master’s thesis. On the basis of data thus collected the paper suggests a model of managing the brand of Bjelovar as an urban environment, establishes the city’s key objectives, mission and vision of what it wants to achieve, and defines the target groups for what the city offers, which is presented in a message, coded in a proposed graphic design with an accompanying slogan. Also, this section of the paper proposes a model of promoting the Bjelovar city brand, from building it to maintaining its reputation. All this can be practically implemented immediately with minimal resources. This would reinvigorate the city and intensify the inhabitants’ drive to make their own contribution to opening up employment opportunities and creating sources of income.