Branding Strategies

Brands

The first important attribute of a product is a brand – a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers. The brand name is that part of a brand that can be spoken – letters, numbers or words. The brand mark, or logo, is that part of a brand name that cannot be spoken and is most commonly a symbol, picture, design, distinctive lettering, color, or combination of these.

A trademark is a legal term meaning the same as brand. A trademark may be eligible for registration, for example, through the Patent and Trademark Office of the Department of Commerce. If registered, the trademark obtains additional protection, mainly, exclusive use, but special efforts are necessary to keep the registration and the exclusive use. On the package or label the circled R or Reg. T.M. following a brand mark or brand name indicates that it is a registered trademark.

Types of Brands

There are two categories of brands: manufacturer brands and private distributor brands. Manufacturer brands are initiated by producers and make it possible for producers to be identified with their products at the point of purchase. A manufacturer branding usually requires a producer to get involved in distribution, promotion and, to some extent, pricing decisions. The producer tries to stimulate demand for the product, which tends to encourage intermediaries to make the product available. With manufacturer branding, the producer dictates the brand name using either a multiproduct or multibrand approach. Multiproduct branding is when a company uses one name for all its products. Multibranding involves giving each product a distinct name. Private distributor brands, or private brands, are initiated and owned by resellers (marketing organisations that buy products for the purpose of reselling them). Private brands do not identify the manufacturers. Retailers and wholesalers use private distributor brands to develop more efficient promotion, to generate higher gross profit and to improve store images. Retailers or wholesalers thus are free to purchase products of a specified quality at the lowest cost without disclosing the identity of the manufacturer.

Starting in the 1970s, some consumers and marketers began taking greater interest in no-brand buying and selling. No-brand (generic) grocery products include canned products, paper products, plastic bags, mouthwash, shampoo and detergents. Generic products are available in fewer package sizes, have plain packages and labels indicating the product name, are not advertised, and are of ‘standard’ quality that meets applicable government standards. The major attraction of generics is that they are priced lower than manufacturer brands and dealer brands.

Brand names can be protected in most countries by registration, but there is some protection for brands in that it is illegal to try to ‘pass off’ a product as being a branded one when it is not. For example, using a very similar brand name to a famous brand, or even using similar package design, could be regarded as passing off. This is a civil offence, not a criminal one, so it is up to the offended brand owner to take legal action.

Brand names should have some, or all, of the following characteristics:

• They should shock, i.e. catch the customer’s attention.

• They should be alliterative: this helps them to be memorable.

• They should connect to the product’s positioning in the consumer’s perceptual map.

• They should link to a visual image: again, this helps the memorability.

• They should communicate something about the product, or be capable of being used to communicate about the product.

• They should encourage the development of a nickname.

• They should be telephone and directory-friendly. Words often seem muffled on the telephone, so that ‘Bud’ becomes ‘Mud’.

Protecting Brands

The terms patent and copyright are often used in marketing. A patent protects an invention (a product), a chemical formula or a new way of doing something (a process) from imitation for a certain period of time. It cannot be renewed. A copyright grants creator of dramatic, musical and other intellectual properties or their heirs exclusive rights to their published or unpublished works for as long as the creator lives, plus fifty years.

Concept check

1. Define the term ‘brand’.

2. Do the brand name and brand mark mean the same?

3. What are the two categories of branding?

4. What is the difference between manufacturer and private distributor branding?

5. Highlight the characteristics the brand name should have.

6. Say whether these statements are true or false. Correct the false ones.

   The brand mark is that part of a brand that can be spoken.	T/F
   After registration, the trademark gives additional protection and exclusive use of a brand name.	T/F
   Manufacturer branding makes producers be concerned about product distribution and promotion.	T/F
   Retailers and wholesalers don’t use private distributor brands as it leads to additional costs.	T/F
   No-name (generic)brands offer no guarantees of quality and are produced and sold inexpensively.	T/F
   Brand names should be registered and cannot be used by non-owners.	T/F
   There are several characteristics of a good brand name.	T/F

7. How can a brand be protected?

Key learning points

• Product refers to anything capable of satisfying a need or want. It includes services, activities, people, places, organizations, and ideas. Physical products can be usually augmented by benefits such as customers advice, delivery, credit facilities, a warranty or guarantee, maintenance, after-sales services, and so on.

• Products can be divided into consumer and industrial ones. Consumer products are subdivided into convenience, shopping, specialty and unsought goods. Industrial products are raw materials, major equipment, accessory equipment, component parts, process materials, and consumable supplies.

• The product life cycle (introduction, growth, maturity , decline) is a useful concept to describe how products progress from introduction through to obsolescence. Line-stretching means lengthening a product line by moving either up-market or down-market. Line-filling is a business strategy that involves increasing the number of products in an existing product line to take advantage of marketplace gaps and reduce competition.

• The brand name is that part of a brand that can be spoken – letters, numbers or words. The brand mark, or logo, is that part of a brand name that cannot be spoken and is most commonly a symbol, picture, design, distinctive lettering, color, or combination of these.