Branding and Differentiation
A
brand is a named product which customers
can identify with and which is seen as different
from other similar products. E.g. I-pod.
 A generic product is a product made by a
number of different businesses, which
customers fail to recognise any differences
between. E.g. Other MP3 players.
 An own brand is one which is sold under the
brand name of a supermarket, rather than the
name of the company that manufactured it.
Branding and Differentiation
 Product
differentiation occurs when a
company produces a range of brands each
with different features e.g. quality, design,
packaging etc.
Branding and Differentiation
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Achieving branding/differentiation:
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Design – make each product have different features,
quality, build to others in the range. Make your product
features different to those of competitors.
Name – make each name unique. Either make the name
reflect the product e.g. Gold Blend Coffee or make the
name obscure to imply that it is highly technical e.g. Intel
Pentium Processor. Some firms market themselves
under the company name brand e.g. Cadbury, whereas
others prefer to do it through individualised branding e.g.
Nestle with Kit Kat and Yorkie.
Efficiency – so the product doesn’t break down
Quality – value for money
Branding and Differentiation
 Achieving
branding/differentiation:
– used to give the product an
attractive appeal. Used to protect the product.
Used to give instructions on how to use the
product.
 Range – appeal to different market segments
 Design – to attract the consumer
 After sales service – so the customer gets help
when they need it
 Unique Selling Point (USP) – what makes it
different from everything else on the market
 Packaging
Branding and Differentiation
 Advantages
 Premium
of branding/differentiation:
prices: A strong brand may allow
firms to charge a higher price than rivals. This
allows a firm to add value.
 Greater consumer awareness: This may make
consumers more likely to buy a high profile
brand rather than a rival’s less well known
brand.
 Increased sales and market share: Bothe of
the factors listed previously can result in an
increase in sales revenue and market share.
Branding and Differentiation
 Advantages
 It
of branding:
is more likely that retailers will devote shelf
space to well known brands.
 Allows the company to launch new products
 Possibility of successful product trial
 Encouragement of word or mouth advertising
 Possibility of repeat sales
 Discourages competition
Branding and Differentiation
 Disadvantages
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of branding:
High costs associated with the massive promotion that
is needed to establish and maintain the brand.
Launching a new version of the brand may lead to a
risk of failure and damage to the brand.
A single bad event will affect all the brand’s products
e.g. Cadbury Salmonella scare in 2006 wiped 14% off
Cadbury sales.
Brand names may be difficult to protect in a global
market – leading to ‘fake’ products.
It may be more important for a firm to use other
aspects of the marketing mix e.g. price, place or
promotion.
Branding and Market maps
Questions
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1. Answer B
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Comments
A incorrect – increasing levels of production does not differentiate
one product from another.
B correct – a change in packaging could make one product stand
out from another on the shelf.
C incorrect – increasing sales does not change a product in its
look, taste or smell.
D incorrect – a change in suppliers may change the raw materials
or reduce costs but does not differentiate.
Questions
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2. Answer D
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Comments
A incorrect – cutting costs of production can apply to both branded
and non-branded products.
B incorrect – this is a product which is sold under the brand name
of a supermarket chain or other retailer rather than under the
name of the business which manufactures the product.
C incorrect – these are products made by a number of different
businesses in which customers see no difference between the
products of one business compared to the products of another
business.
D correct – branded products, through quality or advertising, can
charge a higher selling price.
Questions
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3. Answer C
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Comments
A incorrect – high pricing will not entice customers to
buy for the first time.
B incorrect – the customer will not be aware of the new
production method and this will not persuade them to
try the product.
C correct – heavy advertising will inform the customer
of the product’s existence.
D incorrect – the launch is important to get the
customer to know about the product. Cutting the trial
launch costs would reduce this effect.
Questions
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4.
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Definition: A branded product is a product which, in the
eyes of customers, is seen to be different from other,
often similar, products. A brand provides an identity
which allows consumers to associate with the product
or service and to recognise it. This may help to
persuade them to buy that product rather than its rivals.
Apple Corporation has very distinct brands. The
company brand itself ‘Apple’ is worldwide and the
individual product brands, such as iPhone, iPod and
iMac are all strong brands in their own right. People
recognise the brand and associate it with style and
quality.
Questions
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5.
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Branding helps Apple to get trials by:
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its reputation for worldwide quality.
the wish for consumers to buy a reliable product.
consumers wanting to be ‘part of the cult’.
branding brings ‘word of mouth’ advertising with current
owners persuading new ones to buy the product.
Branding helps with repeat purchase by:
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retaining current Apple product users.
customers desire to own a ‘suite’ of Apple products.
constant advertising reminding the customer of the brand’s
features and advantages.
reputation for updating their product portfolio to meet market
needs.