Branding Decision

What is a Brand?
A brand is a name, term, sing, symble or design to
identify the goods and service and to differentiate them
from those of the competitors.
American marketing association defines a brand as,
the use of a name, term, symble or design, or some
combination of these, to identify the product of a certain
seller from those of competitors.
A brand identifies the product for a buyer. A seller can
earn the goodwill and have the patronage repeated.

Importance of Branding
The use of brands is important in product planning
for several reasons. Branding:
builds customer loyalty
assures customers that products carrying the same
brand are of a consistent quality
addresses new target markets
establishes an image for a product or company

Brand Strategies
Branding strategies are the ways companies
use brands to meet sales and company
objectives. Strategies include:
brand extensions
brand licensing
mixed branding
co-branding
5

Brand Extension

Brand extension is a branding strategy that

uses an existing brand name for an improved
or new product in the product line.
Example: Ocean Spray Cranberry Juice
extended to Cran-Apple, Cran-Raspberry, etc.
Advantages: Reduces risk of new product failure
Disadvantages: Over-extending a product line can
cause brand dilution
6

Brand Licensing

Brand licensing is the legal authorization by

a trademarked brand owner to allow another
company (the licensee) to use its brand,
brand mark, or trade character for a fee.
Advantages: Enhance company image,
sell more products

Mixed Brands

A mixed-brand strategy involves

simultaneously offering a combination of
manufacturer, private distributor, and
generic brands.
Example: Union Carbide sells Glad
brand garbage bags and generic brand
garbage bags.

Co-Branding

A co-branding strategy combines one or more

brands to increase customer loyalty and sales for
each individual brand.
Example: Kelloggs Pop-Tarts are made only
with Smuckers fruit filling. Starbucks Coffee
Co.
opens coffee shops inside Barnes & Noble
bookstores.
9

Pricing Decision

Pricing
Global pricing is one of the most critical and complex
issues in international marketing.
Price is the only marketing mix instrument that creates
revenues. All other elements entail costs.
A companys global pricing policy may make or break its
overseas expansion efforts.
Multinationals also face the challenges of how to
coordinate their pricing across different countries.

Pricing Strategies

Skimming pricing strategy:

strategy involves the
use of a high price relative to competitive
offerings
Often used by marketers of high-end products
Also by firms introducing a distinctive good
with little or no competition
Allows firms to control demand during the
introductory stages of a products life cycle
Can be used as a tool for segmenting a
products market on a price basis
19-12

 Penetration pricing strategy:

strategy involves
the use of a relatively low entry price as
compared with competitive offerings;
based on the theory that this initial low
price will help secure market
acceptance
Everyday low pricing (EDLP): Pricing
strategy of continuously offering low
prices rather than relying on such short
term price cuts as cents-off coupons,
rebates, and special sales

19-13

 Competitive Pricing Strategy:

Strategy
reduces emphasis on price as a
competitive variable by pricing
goods at the general level of
competitors
Firms focus their own marketing
efforts on the product, distribution and
promotion elements of the marketing
mix

19-14

Pricing Policies
Pricing policy:
policy general guidelines based
on pricing objectives and intended for use
in specific pricing decisions
Psychological pricing:
pricing pricing policy
based on the belief that certain prices or
price ranges make a good or service more
appealing than others to buyers

19-15

 Odd pricing:
pricing pricing policy based on the belief
that a price ending with and odd number just
below a round number is more appealing
Unit pricing:
pricing pricing policy in which prices are
stated in terms of a recognized unit of
measurement or a standard numerical count
Price Flexibility:
Flexibility pricing policy that permits
variable prices for goods and services
Product-line pricing:
pricing practice of marketing
different lines of merchandise at a limited
number of prices
19-16

 Promotional pricing:
pricing pricing
policy in which a lower than normal
price is used as a temporary
ingredient in the marketing strategy

19-17

Factors influencing Pricing

Policy

Cost
Demand
Competition
Distribution Channels
Govt.
Economic Condition
Types of Buyers
Ethical Consideration

Distribution Channel
Decisions

Channels of distribution
The part of the supply chain that focuses on making the
product available to the customer.
AMA defines the structure of intra co. org. units and
extra co. agents and dealers, wholesalers and retailers
through which a product or service is marketed.
Cundiff and Still defines it is path traced in the direct or
indirect transfer of title to a product, as it moves from a
product to ultimate consumer of industrial users.

Types of Channel members

Merchant wholesalers
Industrial products distributors

Agent middlemen
Manufacturers agents or manufacturers reps
Sales agents
Brokers
E-Hubs

Types of Channel
Members (contd)
Retailers
Facilitating agencies
Logistics companies
Trucking companies
Advertising agencies
Custom marketing research firms
Etc.

Exhibit 13.5

Channel Design Options

for a Consumer Product
A

Producer

Producer

Producer

Producer

Producer

Agents

Agents

Consumer

Wholesaler

Wholesaler

Retailer

Retailer

Retailer

Retailer

Consumer

Consumer

Consumer

Consumer

Exhibit 13.6

Channel options for

industrial goods and services
A

Producer

Producer

Producer

Producer

Agent

Agent

Wholesaler
Industrial Buyer

Industrial Buyer

Wholesaler
Industrial Buyer

Industrial Buyer

Major Channel Objectives

Making the right product available to the
right buyer at the right place and time
Meeting the buyers customer service
requirements
Cost effectiveness

Distribution policies and

strategies
Intensive distribution: it is a policy where a producer seeks
to use as many outlet as possible in as may placed
possible.
Exclusive distribution: this refers to the practice of selecting
and allotting a particular distributor an exclusive are of sales
territory.
Selective distribution: under this distribution policy, producer
selects a limited number of wholesale and retail distributors
and works closely with them to further to sale of his
products.

Push vs. Pull Strategies

Push

Manufacturer

Wholesaler

Retailer

Consumer

Push vs. Pull Strategies

Pull

Manufacturer

Wholesaler

Retailer

Consumer