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2 Brand Sponsorship

2 Brand Sponsorship

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Published by ameeduddin
09893099754,contact me anytime
09893099754,contact me anytime

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Published by: ameeduddin on Nov 12, 2009
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03/19/2013

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Q.2- Explain various categories of brand sponsorship with example.Ans.2-
 
Brand sponsorship
 Brand manager have four options of sponsoring the brand. They are
1.
Manufacturer brand
2.
Private brand
3.
Licensing
4.
Co- branding
Manufacturer brand:
The brand owned by manufacturer and promoted either directlyor indirectly. This type of strategy is followed from years. Pillsbury atta is themanufacturer brand. In the below image you can see the Pillsbury is launching thePunjabi atta in the market. ( figure 9.4)
Private Brand:
Figure 9.3 Figure 9.4Private brands are also called as store brands. These brands bearing the store name or store selected vendor name. Basic ingredients of private labels are
1
. It must be a unit package: It is difficult to assign a Private Label character to, say ricesold loose from a 100 kg bag. Even though it may enhance consumer loyalty for whatever reason, it does not qualify as a Private Label product.
 
2
. Relabeling: The unit pack must bear only the brand name of the particular store or anyother party the store may choose for its Private Label programme.Private labels will enhance the category profitability; increase the negotiation power of the retailer and better value creates better consumer loyalty. All retailers cannot go for the private labeling. Private labels can be introduced if and only if 
1.
The consumer is not getting the tangible value.
2.
The retailer is not making the enough returns from the sale of the brandedgoods.Emerging issues in private labeling:
1.
The private label strategy is effective, profitable and reality.
2.
The retailer must understand the price, quality and willingness to pay.
3.
The retailer must have a sufficiently large base of loyal customers in thestore before introducing the private label.
4.
The focus must be on consumer need and not any private agenda of theretailers
5.
There must be stringent system for the private label production. Qualitycontrol is a must since there is no else to blame.
6.
Private label must work to fill- in gaps in the category and not target the brand leader 
7.
Smart manufacturers may take a private label initiative of the retailer seriously and avoid value gaps in the categories as an impediment to growing private labels.
(Source: Praxis- Business line)
Brand licensing:
It is the legal authorization by the trade marked brand owner to allowanother company to use its brand for a fee. For example, Hugo boss, Tommy Hilfiger,Lovable, Lacoste, and Nike are some of the textile brands those licensed their brands inthe Indian market. The major benefits of brand licensing are low cost, free publicity andrevenue from royalty fees. Brand licensing also suffers from serious limitations like lack of manufacturing control, and licensing arrangements may fail.
Co- Branding:
According to Kotler co- branding is ‘the practice of using the established brand names of two different companies on the same product’. For example, ICICI andHPCL came together to sell ICICI-HPCL petro cards to the customer. Here card is the co- branding between the two companies. Co- branding helps ICICI to utilize their financialresources well. It adds another banking facility to the bank while HPCL can lock thecustomer from buying the petroleum products from competitors. HPCL also gets the benefit of financial power which it doesn’t have. Both companies promote these products.Hence they can leverage brand image and can reduce the cost. All companies will not get benefit from co-branding. Some times company may loose the brand image if the productfails.
 
Brand Development
 
Company can develop the brand on the basis of product category and brand name. Nowwe will discuss the different strategies adopted by companies to develop the brands.
Product categoryBrand Name
Existing NewExisting NewLine extensionBrand extensionMulti brandsNew brandsFigure 9.5
1.Line extension:
Company uses its well known brand name to introduceadditional items in a given product category such as new forms, flavors,ingredients or package sizes.For example, Karnataka Milk federation, Uses its top brand name Nandini to introducenew items like toned milk, full cream milk , curd and milk powder.Figure 9.6It is less risky and requires fewer investments to introduce the product. In the aboveexample nandini used the extension to meet the excess capacity that it has. The milk  procurement was more than the demand from the customer. Hence it started producingthe milk powder. But all the products introduced need not to be successful in the market.In case of KMF nandini Ice creams didn’t click in the market. Another risk of lineextension is brand cannibalization i.e. company’s brand/items compete each other.

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