1.3

• Branding

  A brand is a characteristic, name or symbol that distinguishes one product from another supplier.
• manufacturer/corporate branding

  corporate branding aims to build communications and relationships between the main business name and the customers.
• benefits of corporate branding

  • spreads the cost of marketing across all the individual brands.
  • awareness of the company can be worldwide e.g. coca cola.
• drawbacks of corporate branding

  • takes a long time to build a solid brand image
  • any unfavourble incidents are linked to your brand
  • too much advertising exposure can cause indifference towards the brand.
• product branding

  A product branding stratergy will aim to show the customer the features and benefits of a product which will differentiate it from other simular products in the marketplace.
• product branding benefits

  • branded products can command higher prices than non-branded
  • businesses therefore can expect higher profits from branded cash cows
  • good branding differentiates the product and creates customer loyalty
• drawbacks of product branding

  • product branding may require a high investment
  • product branding may take many years to build up
  • limited flexibility when the product tries to develop new lines in the range beyond what they are known for.
• own brand product

  own label products are made by a manufacturer on hehalf of a supermarket e.g. tescos finest.
• benefits own brand products

  • boots customers loyalty to the supermarket
  • competes with manufacturers brands
  • fills gaps left by the competition
• drawbacks of own brand products

  • store brands are a mixed bag and can be made by numerous companies under the supermarket's name, so ketchup might be great but cornflakes might taste rubbish - inconsistencies in quality of products.
• research rebranding

  A new: name, symbol, term, design or combination of the above.

  Rebranding works best on established brands with the intention of developing a new differentiated identity in the minds of consumers.
• Added value

  • strong branding can add value to a product both for the consumer and for the business.
  • the benefit for a business of added value is that is increases the value of the overall business making it more attractive to investors.
• Ability to charge premium prices

  • some brands become household names
  • consumers associate these brandnomers with consistent quality and therefore will pay a higher pruce for them than a non-branded item.
• Reduced PED

  • Products/services that have elastic demand are responsive to a change in price, this means if the business puts prices up then demand will fall.
  • A well known brand will make the product more price inelastic, in other words it will reduce the PED.
• USP's/Differentiation

  • usp are the small detials that makes one product or business different from another.
  • These USP's can be exploited ot build the brand.
• Advertising

  • brand awareness is a sense of loyalty between the customer and the adertiser
  • customers purchase from brands they are familiar with
  • in a supersaturated global market place consumers see 100s of adverts a day
  • to build a brand a business will need to use a mixed media approach to cover as mant bases as possible.
• Sponsorships

  • associations with a celebrity or sports star can result in increase brand recognition, awareness and pereception.
• Socail media

  • build a brand by engaging with customers on social media
  • compare competitors content
  • sites can be used to show features and benefits of products which helps to differentiate itself from competition.
• Emotional branding

  • seeks to create a bond between the consumer and the product by provoking an emotional responce to the advert which creates a long lastning
• pricing

  The procoss of pricing is the choice of pricing strategy that a business makes when setting prices for their products or services
• cost plus pricing

  • seeks to set a price for a product or service which covers the costs and provides a good profit margin for the business
  • most logical approach to pricing because it achieve the business objective of maximizing profits
• cost-plus benefits and drawbacks

  • protects the profit margins of the business
  • easiest method of pricing to apply
  • easy to estimate profit levels
  • the method of pricing does not take into account the price of competition.
• skimming pricing

  • is used when launching a new producrt
  • the price is set high to start, this will create high profits and may be used to pay back high research and development costs
• price skimming benefits and drawbacks

  • high starting price can establish an upmarket image.
  • for innovative products it can be a great way to harvest high profits from early buyers who wajt the latest gadget and are prepared to pay a premium price.
  • cheaper imitations of the product may appear on the market too soon and take sales away from the product.
  • risky stratergy as customer may be put off from buying due to the high price.
• competitive pricing

  • some products or services are priced in line with competitors.
  • so customers need to judge a product of non-price methods like quality.
• competitive pricing benefits and drawbacks

  • useful in a market where one brand is dominant, the other brands would need to discount and offer low prices to encourage customer loyalty.
  • pricing at the competitive rate may not cover all the costs of some smaller businesses which cant get the same economies of scale as the large ones.
• penetration pricing

  • setting really low prices on a new product to encourage sales and to persuade customers to try the product. Then when they like the product and have to keep buying it the business rasies the price.
• penetration pricing benefits and drawbacks

  • works best with new products being launched to encourage consumers to try the product.
  • customers may have bought anyways, even with the low start price.
  • expensive as it eats into profits by reducing sales revenue.
• predatory pricing

  • it markets with just a few large businesses (Like budget airlines) existing business may hold off the threat of a new entrant to the market by lowering their prices so that any competitors can not make a profit.
  • This is when aggressive price cutting is used to deter competition or push them out of the market.
• predatory pricing benefits and drawbacks

  • the intention with predatory pricing is to drive competitors out of the market place or set a barrier to enter to discourage new entrants.
  • depends on the price elasticity of the product, if it is low then a lower price wont make much difference to customer demand.
• psychological pricing

  • means 1.99 instead of 2.00 to appear cheaper
  • buy now only 12 left!!
• psychological benefits and drawbacks

  • ideal for products which want to project a premium image, the price might be part of the appeal.
  • psychological pricing strategies can be high risk, if comparable products are available for a lower price consumers could be tempered away.
• Number of USPs/Amount of differentation

  • if a product is highly differentiated, then the business will be able to charge premium prices.
  • USP differentiates the product from rivals.
  • If there is a niche market for the highly differentiated items then prices can be set high and remain high as demand is inelastic as there are few subsitutes.
• Price elasticity of demand

  elastic demand - homogenous products which have lots of substituted will have to price close to competitions, too high and consumers will switch to alternatives, too low and consumers may perceive the product as inferior to comparable products.

  inelastic demand - unique products which have few alternatives will be able to command premium prices as consumers will be unable to switch and therefore willing to pay the price.
• level of competition in the business environment

  • no business works in isolation so change in the price of one business may result in the change of all the others
  • the availability of substitutes will affect businesses pricing decisions
  • if a business wants to establish and maintain loyal customers it will need to match or have simular prices to its competitors.
• strength of brand

  • a brand helps to define a business in the eyes of a consumer
  • strong brand can charge higher prices because consumers will pay the higher prices for the strong brands.
• online sales

  • websites can offer lower prices than the dricks and mortar shops because they don't have overheads, rent and costs of running a store.
  • many customers look at the goods in store then buy online at a cheaper price.
  • this means many online retailers need to have dynamic pricing which is constantely checking and updating based on competitors pricing.
• chnages in prices to reflect social trends

  • customers and now able to shop around and use sites to compare prices of insurance, where previously they would have had to phone a few companies to get quotes, this was time-consuming and an expensive phone bill.
  • they work by heavily advertising and the companies pay to be featured on the list.
• distribution

  Distribution is the process of getting the right product or service to the consumer in the right place. Distribution is on of the 4Ps of marketing: Place.
• 4 stage distribution

  1. manufacturer
  2. wholesaler
  3. retailer
  4. consumer