Branding

A brand is a name, symbol, design or term used singly or in combination to identify the goods or services of a specific producer. Brand names, i. e. (id est) that part of a brand that can be spoken, for example Coca-cola. А brand mark is the element of a brand, represented by a symbol or design, which may be modified for local markets, For example, Microsoft uses its brand name with a butterfly in France, a fish in Portugal and a sun in Spain.

A trademark (TM) is a legally protected brand name that cannot be used without permission from the company that owns it. A trade name is a full and legal name of organization rather that the name of a specific product, for example Ford Motor Company. To protect a brand name or brand mark a company must register it as trademark with the appropriate patenting office. To indicate that the brand is a registered trademark the symbol R is used.

There are three categories of brands: manufacturer brands, own label brands and generic brands. Manufacturer brands are initiated by producers and insure that producers are identified with their products at the point of purchase. A manufacturer brand usually requires the involvement of he producer of distribution, promotion and pricing decision. Own label brands (privet brands, store brands, dealer brands) are initiated and owned by resellers – wholesalers or retailers. Wholesalers and retailers use this brands to develop more efficient promotion, to generate higher profits and to improve store images. Generic brands indicate only the product category (such as aspirin) and do not include the company name or other identifying terms. Usually generic brands are sold at prices lower than those of comparable branded items.

Brand names are created inside an organization by individuals, committees or branding departments, or by outside consultants. Brand names can be devised from words, initials, numbers, nonsense words or a combination of these, as in IBM PC.

If a firm chooses to brand its products it may use either individual branding policy or family branding policy. Individual branding is naming each product differently. The purpose of using individual branding is to enter many segments of the same market. In the case of a family branding when a firm introduces a new product both customers and retailers recognize the familiar brand name as it is already well known.

Brands are an important means of creating product differentiation, establishing competition and encouraging product confidence.

Prices

The price of a product is the amount of money that the seller is willing to accept in exchange for the product at a given time and under given circumstances.

As a product is developed and introduced and as it progress through its life cycle, decisions must be made about the pricing of the product.

Before the price of a product can be set, an organization must decide whether it will compete on the basis of price or of some other combination of factors. Among the important factors considered when setting a price are 1) the costs and business expenses involved in the manufacture or distribution of the product, 2) its fashion and seasonal appeal, 3) the competition, 4) government price regulations, and 5) supply and demand.

Marketers may choose the price above or below the average or current market price. If the price is above competitors` prices, the marketer must offer some unique advantages that are easily seen by the customers. If marketers` price is below the market price, they may attract more customers and increase sales. If the price is the same as others, in this case, the service must be better to attract the customer.

Competition in the market exists in the form of either price competition or non-price competition. Price competition occurs when a seller emphasizes the low price of a product and sets a price that equals or beats competitors’ prices. Competitors can do likewise which is a major drawback of price competition.

Those who choose non-price competition create demand for their products by offering theirs customers attractive credit terms, after-sales services, free repairs and other forms of encouragement.

Prices perform two important economic function they ration scarce resources, and they motivate production. As a rule, the more scarce something is, the higher its price will be, and the fewer people will want to buy it. This is known as the rationing effect of prices.

Price services the function of allocator. First, its allocates goods and services among the customers. Second, price allocates financial resources (sales revenues) among producers according to how well they satisfy consumers` needs. Third, price helps consumers to allocate their own financial resources while choosing a particular product in the market.