Приложение 3. Marketing

Branding strategies. Branding is appropriate both for services and physical products.

No Brand Identity. Many small and medium-sized manufacturers do not have an established brand identity even though the company name is printed on the package or item. The lack of financial resources and marketing capabilities makes it difficult for a firm with an unknown brand to build buyer awareness in the marketplace. Major expenditures are required to introduce and promote the brand. A firm in this situation often relies on marketing intermediaries to encourage buyers to purchase the unknown brand. An unknown brand needs the reputation and support of wholesalers and retailers. Buyers relate an unknown brand to the intermediaries that carry the brand. If their perception of the seller is favourable, then the unknown brand benefits. Typically, the producer of an unknown concentrates its marketing efforts on wholesalers and retailers rather than end-users. Unknown products may develop consumer loyalty over time if users’ experience with the product is favourable, and if it is purchased frequently. Through extended use, the brand may develop customer loyalty. Even if a firm does not have the resources to aggressively promote a brand, management should consider assigning a brand name, particularly if the item is repurchased on a continuing basis. Favourable experience and word-of-mouth promotion with friends can help to build the brand’s reputation with buyers.

Management may decide not place a brand name on a product on order to offer a generic option to buyers. This strategy is used by large manufacturers and intermediaries attempting to attract buyers who want lower-priced, nonbranded equivalents to brand name products, such as tissues, paper towels, and various other frequently purchased products. In this instance, the use of a brand name is inappropriate.

Private branding. Assignment of a brand name by a nonmanufacturer is private branding. For example, Sears, Roebucks’s products are produced under private branding arrangements with various manufacturers. retailers with established brand name, such as Target, The Limited, and Wal-Mart, contract with producers to place the retailers brands on the products manufactured. The major advantage to the producer is eliminating the costs of marketing to end-users, although the manufacturer is dependent on the firm using the private brand. Producing private label merchandise for one intermediary is risky since the arrangement can be terminated by the buyer. Nevertheless, a mutually satisfactory private branding arrangement benefits both the producer and middleman. The producer’s sales volume can be expanded rapidly. The retailer can use its private brand to build store loyalty since the private brand is only available in the retailer’s stores. Private brands are often very profitable for retailers. For example, the profit margins of the private brands carried by supermarkets typically run 10 percent to 15 percent higher than other brands. Private brands account for nearly 13 percent of total sales in supermarkets. Consumer preferences for private brands may vary by country. For example, Italians favour national brands.

Corporate branding. This strategy places emphasis on building brand identity using the corporate name. The brand identity spans the firm’s entire product offering. Examples include IBM in computers, AT&T in communications, and the American Airlines in air travel. Corporate branding offers the advantage of using one advertising and sales promotion program to support all of the firm’s products. An established corporate identity also aids the promotion of new products. The shortcomings of corporate branding include a lack of focus on specific products and possible adverse affects on the entire product mix if the corporate name encounters negative publicity. Corporate branding as a primary branding strategy is appropriate when it is not feasible to establish specific brand identity and when the product offering is relatively narrow.

Product-Line Branding. This strategy places a brand name on a line of related products. Examples include Sear’s Kenmore and Craftsman brands. Hartmax, the men’s apparel producer, produces and markets various brands of men’s suits. Product-line branding provides more focus than corporate branding. and is cost effective by promoting an entire line rather than a specific product. This branding strategy is effective when a firm has one or more lines, each representing an interrelated offering of items. London Fog outwear, for example, is marketed as a line of apparel rather than by attempting to establish a brand identity for each item in the line. This branding strategy also has some limitations. a problem experienced by one item in the line may affect the image of the entire line. The positioning strategy must support the entire line, which may require excessive resources, if management wishes to focus on selected items in the line and/or particular customer segments. Thus, a close relationship among the items in the line is desirable.

Specific Product Branding. The strategy of assigning a brand name to a specific product is used by various producers of frequently purchased items, such as Procter&Gamble’s Crest toothpaste, pampers diapers, and Ivory soap. A brand name on a product gives it a unique identification in the marketplace. A successful brand can gain a strong loyalty over time. Products that represent low-involvement purchases benefit from a popular brand name. The major limitation of brand names on individual products is the high expense of building and supporting a brand through advertising and sales promotion. One danger is that the brand name may be so popular that it becomes a generic term for the product type. Companies work aggressively to prevent this and other misuses of popular brand names. Building a new brand name through advertising initially can cost over $50 million, plus the expense of maintaining the brand loyalty.

Combination Branding. Combination branding is used when the benefits of two branding strategies are great enough to overcome possible limitations. The strategy typically includes a corporate and line or item brand combination. The strategy may be used by a private brand retailer to emphasize specific lines. Combination branding may also be effective for a producer of consumer brands when launching a new brand. The corporate identity and reputation enhances the individual brand’s acceptance by consumers.

Приложение 4.