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 BrandingThe use of brands is important in product planning for several reasons. Branding:builds customer loyaltyassures customers that products carrying the same brand are of a consistent qualityaddresses new target marketsestablishes an image for a product or company

*Branding strategies are the ways companies use brands to meet sales and company objectives. Strategies include: brand extensionsbrand licensingmixed brandingco-brandingBrand Strategies

*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 failureDisadvantages: Over-extending a product line can cause brand dilutionBrand Extension

*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 productsBrand Licensing

*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.Mixed Brands

*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.Co-Branding

Pricing Decision

PricingGlobal 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.

19-*Pricing StrategiesSkimming pricing strategy: involves the use of a high price relative to competitive offeringsOften used by marketers of high-end productsAlso by firms introducing a distinctive good with little or no competitionAllows firms to control demand during the introductory stages of a products life cycleCan be used as a tool for segmenting a products market on a price basis

19-*Penetration pricing 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-*Competitive Pricing Strategy: reduces emphasis on price as a competitive variable by pricing goods at the general level of competitorsFirms focus their own marketing efforts on the product, distribution and promotion elements of the marketing mix

19-*Pricing PoliciesPricing policy: general guidelines based on pricing objectives and intended for use in specific pricing decisions

Psychological 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-*Odd pricing: pricing policy based on the belief that a price ending with and odd number just below a round number is more appealingUnit pricing: pricing policy in which prices are stated in terms of a recognized unit of measurement or a standard numerical countPrice Flexibility: pricing policy that permits variable prices for goods and servicesProduct-line pricing: practice of marketing different lines of merchandise at a limited number of prices

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

Factors influencing Pricing PolicyCostDemandCompetitionDistribution ChannelsGovt.Economic ConditionTypes of BuyersEthical Consideration

Distribution Channel Decisions

Channels of distributionThe 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 membersMerchant wholesalersIndustrial products distributors

Agent middlemenManufacturers agents or manufacturers repsSales agents BrokersE-Hubs

Types of Channel Members (contd)Retailers

Facilitating agenciesLogistics companies Trucking companiesAdvertising agenciesCustom marketing research firmsEtc.

Channel Design Options for a Consumer ProductExhibit 13.5

Exhibit 13.6Channel options for industrial goods and services

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 strategiesIntensive 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 StrategiesPushManufacturerWholesalerRetailerConsumer

Push vs. Pull StrategiesPullManufacturerWholesalerRetailerConsumer

*Channel design options: sell direct or through some channel?RetailerWholesalerAgentCombination thereof

How to decide?Consider the channel objectives (see next slide) and rate the channel structure against each one. Then balance the trade-offs and the companys resources.

*3Channel design options: sell direct or through some channel?WholesalerAgentCombination thereof

*Deciding among these competing objectives always involves tradeoffs.*