MARKETING a specified name to a product or
MARKETING MANAGEMENT 5. Branding, Labeling, Packaging & Pricing Brand ? What is a Brand? A Brand is a name, term, symbol or design to identify the goods or services and to differentiate them from those of the competitors. ? Effect – A Brand identifies the product for the buyer. A seller can earn the goodwill and have the patronage repeated. ? Brand – A name, term, sign, symbol or design or a combination of them which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. ? Brand Name – That part of a brand which can be vocalized/utter able.
Eg- FIAT car, SONY TV, BATA Shoe etc. Brand Name ? When a manufacturer wants to introduce a new product to the market, he wants to identify his product rather with a striking name – Brand Name. Net effect is -The buyers identify the product and differentiate it from those of competitors. ? The basic purpose of Brand Name is to fix the identity of the producer of a given product. ? Brand Name is a brand or part of a brand consisting of a word, letter, group of words or letters comprising a name which is intended to identify the goods or services of a seller or a group of sellers and to differentiate them from those of competitors.
It is nothing but a combination of letters, words or numbers. Eg – Tata, Godrej, 555, 501 Soaps etc. Branding ? Branding is the process of giving a specified name to a product or a group of products of one seller. ? In other words naming a product, like naming a baby is known as branding. Parents have children and manufacturers too have children i. e. products. As parents, manufacturers are eager to know the character & capacity of their products on their birth, but not their names. ? Thus Branding is a management process by which a product is named i. e. Branded. Reasons for Branding An instrument for sales promotion in the market, ? ? ? ? ? ? where stiff competition exists. Facilitates easy advertisement and publicity. Creates special consumer preference over the product. Sales can be increased through brands. Arrests the immediate attention of buyers. Differentiates the goods of a producer from the goods of the competitor. Ensures standard quality and satisfaction to buyers. Reasons for Branding Individual Products ? Memory recall is facilitated. Leading to greater ? ? ? ? ? ? frequency of buying and hence deeper loyalty. Leads to a more ready acceptance of a product by wholesalers and retailers.
Self-selection is facilitated-a very important consideration in self-service stores. Importance of price differentials may be diminished. Brand loyalty may give a manufacturer greater control over marketing strategy & channels of distribution. Other products may be introduced more readily. The amount of personal persuasive selling effort may be reduced. Functions of Branding ? Brand facilitates distinctiveness from the rival ? ? ? ? ? products in the market. Branded products possess individual identification. Branded goods create a satisfactory or standard quality in the minds of the consumers.
Branding reduces price comparison, because two similar items with two different brands may not be compared. Brand differentiates the product and facilitates the advertisement to be more effective & successful. A good brand signifies prestige, ensures legal right, forms the basis for successful demand, creational activity, sales-stability & widening the market area. Features of a Good Brand ? Brand should suggest something about the product – Purpose, Quality, Benefit, Use, Action etc. ? It should be simple short and easy to pronounce and remember. Eg- Lux, Hamam, Murphy etc. It should be easy to advertise & identify. ? It should be of a permanent nature. ? It should be clear & attractive. ? It should be capable of being registered & protected legally. Features of a Good Brand ? It should be distinctive. ? It should have a pleasing sound to ear. ? It should be economical to reproduce. ? It must be original. ? It should not be pronounced in several ways. ? It should not be offensive. ? It should create a good image. ? It should not be out of date. Ex: Lifebuoy, Hamam, Lux, Dalda, Nirma, Exide. Types of Brands ? Individual Brand: A policy of adopting istinctive brands for every product. ? Family Brand: Family name is limited to one line of products. The term family brand refers to one brand name which a firm adopts for a variety of its products. Ex- Tata, Godrej, Johnson & Johnson, Amul etc. ? Company Brand: All products may have the name of the company or the producer. When a firm manufactures many products, this type of brand is used. Ex- Tata’s Textiles, Chemicals, Engineering goods etc. Types of Brands ? Combination Device: Products have individual names and also company brands to indicate the firm producing them. Ex- Brooke Bond Red Label, Taj Mahal etc. Private or Middlemen’s Brand: Such brands are owned and controlled by middlemen rather than manufacturers. Manufacturer introduces his products under a distributors brand name. Kinds of Brand Name ? Descriptive Name: It includes all words that describe the products. Ex- Glucose biscuit, Colgate Tooth Paste, Pond’s Face Powder. ? Suggestive Name: The name suggests something about the function of the product. Ex- Band-aid sticking plaster, Feviquick etc. ? Arbitrary Name: It is a name which neither relates to the product nor to the producer. ? Coined Name: Importance is given to the producer’s identity.
Ex- “Vimal” alone is meaningless, unless attached to suiting. Brand – Advantages to Producer ? Brand enables a firm to build reputation. ? Device which builds a good image & goodwill. ? Facilitates introduction of new products. ? Distinguishes products from rivals and thus ensures constant returns. ? Essential for product promotion & demand. ? Reduces advertising cost. ? It brings repeated sales. ? Reduces the need for price comparison. ? Individuality of product is established. Brand – Advantages to Consumer ? Brand distinguishes & differentiates the products of different producers. An identification is possible through brands, consumers are at ease while shopping. ? Consumer gets quality goods. ? Many people get satisfaction on certain brands, which are in great popularity. ? It assures quality & standard of the product. Brand – Advantages to Retailers ? They require less time to get sold. ? Branded products pose less risk. ? Stabilized demand for branded products. ? Branding aids in advertising & display. ? Branding assists in increasing control over the market. ? Branding reduces the price comparisons and helps stabilize price. Desirable Conditions for Branding There must be wide spread supply of the products. ? The quality & standard of the products must be maintained regularly. ? Enforcement of product identification and differentiation by brands must be strictly adhered to. ? There must be enough demand from the general public. ? Brand must carry through the product to the ultimate consumer, to be more effective. Undesirable Characteristics of Brand ? Brand is not likely to deceive or cause confusion. ? It should not be contrary to any law. ? It should not contain scandalous or obscene matter. ? It should not hurt religious sentiments. It should not be similar to the existing one. Trade Mark ? Any sign, mark or symbol, word or words, which ? ? ? ? indicate the origin or ownership of a product as distinguished from its quality and which others have not equal right to employ for the same purpose. When a Brand name or Brand mark is registered and legalized it becomes a trade mark. So registered Brand is a Trade Mark. A trade mark is registrable or non-registrable. All Trade Marks are Brands, but all Brands are not Trade Marks. LABELING Label & Its Purpose ? Label is a part of the product, carries verbal ? ? ? ? ? ? nformation about the product or the seller. It may be a tag attached directly to product. It may be a small slip or printed statement. It may be part of the package or it may be attached to the product directly. It conveys verbal information about the product or the seller. Producer gives necessary information to the consumers through the label. Act of attaching or tagging the labels is labelling. Label Types ? Three types of Label: ? A Brand Label: It simply popularizes the Brand Name of the product. ? A Grade Label: Identifies or Emphasis the quality standards or grades. It identifies Quality. A Descriptive Label: Gives written or illustrative objective information about the use, care, performance & other features of the product. Function of Labelling ? Enables the producer to give clear instructions ? ? ? ? about the uses of the product. Price variations caused by the middlemen are avoided as price is printed & maintained. Manufacturer-buyer relation is established. It encourages producers to make only standard products. Buyers can easily identify the product. Function of Labelling ? A complete label gives the following information: ? 1. Brand Name ? 2. Address of the Producer ? 3.
Gross & net quantity of the product ? 4. Ingredients in the product ? 5. Directions for use ? 6. Precautionary measures ? 7. Nature of the product ? 8. Date of packing & expiry ? 9. Retail price Advantages of Labelling ? It grades the product ? It facilitates buyers to pay the right price ? It helps in avoiding confusion ? It brings home the characteristics of a product ? It helps advertising activity ? It gives all needed information to buyers ? It gives guarantee for the standard ? Label is the media to popularize the product Disadvantages of Labelling ? It is of no use to ignorant or illiterate people. It increases the cost of the product. ? Labelling must be preceeded by grading and standardization. ? It aims at mainly popularizing the product rather than giving information to the customers. PACKAGING What is Packaging? ? Packaging means wrapping of goods before they are tranported or stored or delivered to a consumer. ? Packaging is the sub-division of Packing Function of Marketing – where it is defined as “ an activity which is concerned with protection, economy, convenience & promotional considerations. ? Many have called packaging a fifth “P” along with four other P’s – Price, Product, Place & Promotion. Packaging is the activity of producing the container or wrapper for a product. The wrapper or the container is called the Package. Factors Influencing Packaging ? Self Service: Products being sold through super markets on self service basis, need to be packed & kept ready for sale. Packages attract attention, telling product features, create overall impression and win consumers confidence. ? Consumer Affluence: Consumers are willing to pay a little more for conveniences, appearance, dependability and prestige of better packages. ? Company & Brand Image: To enjoy a distincitve attraction, there must be a good brand & packaging. Innovational Opportunity: Innovative packaging can bring large benefits to consumers & profits to producers. Functions Of Packaging ? Product Protection: Package protects the products and is fundamental an idea. Package prevents breakage, contamination, pilferage, chemical change, insect attack etc. ? Product Containant: Package means using just the space in which a product will be contained. Ordinary packing is in the form of throw-away containers. ? Product Attractiveness: The size and shape of the package, its colour, printed matter on it etc. , must make the package attractive to look at.
The psychological feeling is that a good package contains good quality product in it. A pictorial label on the package plays a role of a silent slaesmen. Functions Of Packaging ? Product Identification: Packages differentiate similar products. Packaging & Labelling are inseperable and are closely related to branding. Package has more significance, when the product cannot be seen by the buyer – packed milk, fruit juice etc. Buyers depend on the package label in understanding the product in the package. An attractive label is the means of success in marketing. Product Convenience: The purpose of packaging is not merely confined to consumer service. The design and size of the package must be in accordance with the contents and it must be convenient to the ultimate customers. Package which can be easily handled, opened, moved etc. is appreciably favoured by users. Functions Of Packaging ? Effective Sales Tool: A good package stimulates sales. A designed & attractive package invites customers. As is the product so is the package. Many people think that a good package, taller in size, not shorter, contains bigger products. Women like round or curved shape of packages.
Packaging, attractive & innovative has value, as many people buy the products for the sake of containers. General Functions Of Packaging ? It is an advertising media. ? It encourages re-purchages. ? It facilitates retailers functions. ? It creates product image & individuality. ? It enables easy display. ? It protects the contents. ? It facilitates easy storing, transporting etc. ? It becomes easy to identify the product. ? It helps memory and recognition. ? It provides convenience, economy, adjustability etc. Kinds Of Packaging ? Consumer Package: Is a kind of package which holds the equired volume of product for the house hold consumption. Ex – Toothpaste, Shoe Polish. ? Family Package: When products are related in use and are of similar quality, the firm makes the packages identical for all products by using common feature on all packages. In this type of package system a producer uses similarity in packages i. e. material, appearance, method etc. ? Re-Use Package: Also called as dual package. A producer sells the contents in such a package which can be re-used for other purposes after the product is consumed; the package has a secondary use, after the contents are consumed.
Ex- Glass jar of nescafe and many other products are packed such that the package can be put to use into many ways. ? Multiple Package: Practice of placing several units in one container is known as multiple packaging. Ex-Makeup set. PRICING Pricing & Pricing Policy ? Price is the main factor which affects a sales ? ? ? ? organization A good price policy is of great importance to the producers, wholesalers, retailers & consumers. Pricing is a critical situation – If prices are high, few buyers purchase and if prices are low many buyers purchase. The price increases in relation to the sales revenue.
Hence a sound pricing policy must be adopted to have maximum sales revenue. In today’s market one cannot say that the price is high or low without considering the quality of the product to be purchased. What is Price? ? It may be defined as the exchange of goods or ? ? ? ? ? services in terms of money. Without price there is no marketing in the society. If money is not there exchange of goods can still be undertaken, but without price; i. e there is no exchange value of a product or service agreed upon in a market transaction. What you pay is the price for what you get.
Price is the exchange value of goods or services in terms of money. Price of a product or service is what the seller feels it worth, in terms of money, to the buyer. Importance of Pricing ? The market price of a product influences wages, rent, ? ? ? ? interest & profits. In other words the price of a product influences the price paid for the factors of production, labour, land, capital & entrepreneurship. The price is a matter of vital importance to the buyer & the seller. Exchange of goods or services takes place only when the prices are mutually agreed upon by the seller and the buyer.
Price can decide the success or failure of a firm. Prices are important economic regulators. Price is a primary source of revenue which, all firms try to maximize by expanding their markets. Importance of Pricing Contd…. ? The market demand for a product or a service to a large extent depends upon the price of the product. ? Price will affect the competative position & share of the markets. ? When a firm sets a price for its goods, it has to consider many factors – demand, existing competition, legal restrictions etc. Only the cost of production is not sufficient to fix the price, but the objectives of the firm must also be considered.
Pricing Objectives ? The Pricing Objectives are related to company’s overall goals or objectives. ? The mains goals in pricing may be classified as follows: 1. Pricing for Target Return (ROI) 2. Market Share 3. To meet or Prevent competition 4. Profit Maximization 5. Stabilize Price 6. Customer’s ability to pay 7. Resource Mobilization Factors affecting Pricing Decisions Influencing factors for a price decision is divided into 2 groups: ? A) Internal Factors: ? 1. Organizational Factors ? 2. Marketing Mix ? 3. Product Differentiation ? 4. Cost of the Product ? 5. Objectives of the Firm ?
B) External Factors: ? 1. Demand ? 2. Competition ? 3. Suppliers ? 4. Economic Conditions ? 5. Buyers ? 6. Government ? Procedure for Price Determination ? ? ? ? ? ? 1. Determine demand for the product 2. Anticipate and analyze the competitive reaction 3. Establish expected share of the market 4. Select pricing strategy 5. Consider company’s marketing policies 6. Set the price ? Policies for Pricing: ? ? ? ? 1. Cost based 2. Demand based 3. Cost demand based 4. Competition based Kinds of Pricing ? ? ? ? ? ? ? ? ? ? ? ? ? 1. Psychological pricing 2. Customary pricing 3. Skimming pricing 4.
Penetration pricing 5. Geographical pricing – FOB, Zone & Base Point pricing. 6. Administered pricing 7. Dual pricing 8. Mark up pricing 9. Price lining 10. Negotiated pricing 11. Competitive bidding 12. Monopoly pricing 13. Oligopolistic pricing Strategies and Decisions ? ? ? ? ? ? ? ? Price Differentials: A difference between the quoted price and the net price charged is known as price differential. The different price differentials are: 1. Trade discounts 2. Quantity discounts 3. Seasonal discounts 4. Cash discounts 5. Allowances Price Leader: A firm initiating price changes increase or decrease) is called price leader and those following it are followers. The non leading firms have no other practical alternative but to follow their leader in price fixing. EgConsumer goods industry. Factors Affecting Price (Price Leader) 1. 2. 3. Prices move up – reasons There is more demand but less supply Weak competitors exist Sellers hold up goods for higher price (bullish attitude) There is increase in wage but not in productivity Factors of production are used inefficiently Buyers are eager to possess ownership The supply of money increases Goods are non-perishable by nature Prices move down – reasons 1.
There is more supply but less demand 2. Strong competitors exist 3. Sellers push out goods (bearish attitude) 4. Wages are stable & productivity rises 5. Factors of production are used efficiently 6. Buyers resist against purchase 7. The supply of money decreases 8. Goods are persihable by nature 4. 5. 6. 7. 8. Strategies and Decisions contd…. One Price versus Variable Price – Features Features of One Price policy Features of Variable Price policy ? 1. All similar types of buyers will be charged exactly the same price & no discrimination among the buyers of the same commodity. . No negotiation, bargaining allowed or no favouritism is shown to any buyers. 3. Terms of sale are same for similar quantity of the product. Discounts and allowances are granted on equal terms to all buyers. 4. A fair and fixed policy in line with the normal market price & providing normal margin of profit is the best pricing policy. 5. Adopted by US & other developed countries at retail level they have oneprice policy. 1. Seller sells same quantities to different buyers at different prices. Certain favoured customers are offered lower prices. 2.
Negotiations, bargaining are allowed and favouritism is common for regular buyers. 3. The terms of sale eg- discounts & allowances are on unequal terms to buyers. 4. Especially in developing countries, sellers commonly use variable pricing for most consumer items. In retail trade price discrimination is usual. 5. In India and many other developing countries, sellers usually have variable price policy. Strategies and Decisions contd…. ? One Price versus Variable Price – Advantages Advantages of Variable Price policy 1. Sellers have flexibility in dealing with different customers. . Certain valuable customer can be offered lower price. 3. Flexible price policy enables to attract customers of other competitors and thus new business can be secured. 4. When the price of transaction is large, price should be negotiable. 5. Sellers of consumer durables often adopt variable price policies. 6. Some buyers have greater bargaining power or they are able to pay cash. These will always insist on negotiated price. Advantages of One Price policy 1. Uniform return from each sale – profits are assured & certain. 2.
Low selling costs, saving of time in sale as there is no price bargaining. 3. Customer confidence is secured. There is no preferential price hence no risk of losing a customer. 4. Timid or weak bargainers are not at a disadvantage. It’s a fair business. 5. Seller can amintain his goodwill. 6. It is suitable for self-service retailing, mail order selling and automatic vending or selling. 7. Large retailers follow this policy. Strategies and Decisions contd…. Resale price maintenance: ? Retail price is the price which a retailer sells the products to his buyers.
Resale price maintenance is a policy where manufacturers want to control the prices at which retailers will resell the manufacturer’s product. Manufacturers adopt this as a marketing policy, identify their product by brand, patent, trade mark etc. and place restrictions and control on the price at which the products shall be sold by the retailers. ? ? ? ? The price will be fixed by the producer and at the same price the product will be sold. This fixed price should not be altered. The producer must see that the price is maintained till his products reach the ultimate consumer. This policy prevents unhealthy price competition, bargaining etc.