Branding and Promotion

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brand and the benefits of a strong brand

Branding - the process of creating a distinctive and lasting identity in the minds of consumers.

Benefits of Developing a Strong Brand -

1. Added Value: a strong beand gives reassurance and may provide aspirational benefits adding value to the purchase

2. Charging Premium Prices

3. Reduced Price Elasticity: Brand loyalty lowers price elasticity, enabling the producer to push prices up with little damage to sales volumes.

4. Combatting the discounters: A strong brand gives you the power to hold firm against discount retailers. Weaker brands have to cut their prices to, for example, £1 for PoundLand or accept marginally profitable orders from other retailers. Weak brands always struggle to survive.

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types of branding and advantages&disadvantages

Individual Brand - "a branding strategy in which products are given brand names that are newly created and generally not connected to names of existing brands offered by the company" (eg: Unilever has no interest in the consumer associating them or any other unilever brands with Marmite)

A huge benefit of keeping brands individual is that a publicity disaster for one has no effect on the others. A disadvantage is that each product will require its own marketing strategy and budget meaning successes will not be directly attributed to the company’s brand 

Brand Family - "a marketing practice involving the use of a single brand name for the sale of two or more related products" (eg: Cadbury's logo is prominent on Twirls, Wispas, Dairy Milk etc)

An advantage is it adds a comforting familiarity meaning customers are more likely to buy products they know and trust. A disadvantage is any product can negatively affect the overall brand and specific benefits may be muddled in the overall shared value

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types of branding and advantages&disadvantages

Corporate Brand - "attempt to attach higher credibility to a new product by associating it with a well established company name" (eg Nestle puts its logo on its products such as Nestle Kit Kat, Nestle Cheerios, Nestle Munch Bunch yoghurt)

An advantage of this is it adds creditability to the individual brand name. From a UK perspecitive this may not be true but a shop in Thailand selling Nestle branded ice cream would provide reassurance. A disadvantage of this is that everything the conpany does is attributed to the brand whether its good or bad

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building a brand

1. Unique Selling Points - product differentiation (eg Coca-Cola's USP is that it was the original cola drink)

2. Advertising - reinforces the message about superiority of the product and also encourages new, younger buyers to tap into the mainstream consumer decision

3. Sponsorship: attempt a long term brand building that, when done cleverly, can help give a brand a personality (eg Red Bull supports Formula 1 motor racing-the cool image established by this helps it fight Coca-Cola's energy drink brands such as Monster)

4. Use of digitial media: (eg Google adwords)

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marketing a brand

1. Viral Marketing - today's social media adds an extra dimension to viral marketing - speed. Companies try to find ways to manipulate supposedly "social" media for their own commercial benefit (eg video clips, interactive flash games, ebooks, images, text messages)

2. Social Media - an alternative to standard press or TV advertising. The targeting can be especially tightly targeted at the precise tastes and habits of each individual, including noting changes in their behaviour. Social media also provides the interactivity that may help create some bonding between consumer and brand.

3. Emotional Branding - "a term used within marketing communication that refers to the practice of building brands that appeal directly to a consumer's emotional state, needs and aspirations" (eg the Andrex puppy)

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Promotion - a general term that covers all the marketing activity that informs customers about a product and persuades them to buy it

Short Term Sales Promotion

Buy One Get One Free (BOGOF) - boosts demand, but at the cost of short-term profit margins and at the risk of undermining the credability of the brand

Seasonal Price Promotion - effective way to boost capital utilisation and cash flow when a product is out of season (eg seaside hotels face months of empty rooms in autumn&winter-promotes price promotions on theirs and other hotel websites)

Long Term Sales Promotion                                                                                         Persuasive Advertising - designed to create a distinctive image (eg McDonalds slogan "I'm lovin it" - "our food may be unhealthy but it tastes great")

Public Relations - an attempt to affect consumers' image of a product without spending on media advertising. Includes making contacts with journalists to get favourable mentions and sponsorships


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key terms

Capacity Utilisation - measures actual usage of facilities as a percentage of the maximum possible (eg a half-empty hotel has 50% capacity utilisation)

Crowdfunding - obtaining external finance from many individual, small investments, usually through a web-based appeal

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