Branding

Brand That part of a brand that can be spoken,

Name including letters, words, and numbers

Brand The elements of a brand that

Mark cannot be spoken

Brand
The value of company and brand names
Equity

Global A brand where at least a third of the

Brand earnings come from outside its home country

1
 Benefits of Branding

Product
Product
Identification
Identification

Repeat
Repeat Sales
Sales

New
New Product
Product
Sales
Sales

2
 Branding Strategies

Manufacturers’ The brand name of a

Brand manufacturer.

A brand name owned by a

Private wholesaler or a retailer. Also
Brand known as a private label or
store brand.

A brand manufactured by a
third party for exclusive
Captive
retailer, without evidence of
that retailer’s affiliation.

3
 Individual Brands Versus
Family Brands

Individual Using different brand names

Brand for different products.

Marketing several different

Family
products under the same
Brand
brand name.

4
 Cobranding

Ingredient
Ingredient
Branding
Branding

Types of Cooperative
Cooperative
Cobranding Branding
Branding

Complementary
Complementary
Branding
Branding

5
 Functions of Packaging
Contain and Protect

Promote

Facilitate Storage, Use,

and Convenience

Facilitate Recycling

6
 1. Packaging identifies the product, describes its features and benefits

3. Packaging lengthens the lifespan, physically protects, and extends the usefulness of the product.

7 © 2013 by Cengage Learning Inc. All Rights Reserved.

 4. Packaging has become an environmental issue by
itself. Many enterprises nowadays have already adopted
environment-friendly bags or echo bags

5. Packaging must possess its own value proposition for the customers, as well as for the enterprise.

8 © 2013 by Cengage Learning Inc. All Rights Reserved.

 Labeling
Persuasive Informational

 Focuses on  Helps make proper

promotional selections
theme
 Lowers cognitive
 Consumer dissonance
information is
secondary
Greenwashing
Attempting to give the impression of environmental
friendliness whether or not it is environmentally friendly.

9
 Product Warranties

A confirmation of the quality or

Warranty performance of a good or service.

Express A written guarantee.

Warranty

An unwritten guarantee that the good or

Implied
service is fit for the purpose for which it
Warranty was sold.

10
7
 Pricing Concepts

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Chapter 12 Copyright ©2012 by Cengage Learning Inc. All rights reserved 11
The Importance of Price

To
To the
the consumer...
consumer...
To
To the
the seller...
seller... Price
Price is
is the
the cost
cost
Price
Price is
is revenue
revenue of
of something
something

Price
Price allocates
allocates resources
resources
in
in aa free-market
free-market economy
economy
What Is Price?

Price
Price
Price is that which is
given up in an exchange
to acquire a good or
service.
 What is Price?
• Sacrifice Effect of Price
– What is sacrificed to get a good or service
• Money, Time, Dignity
• Information Effect of Price
– Infer quality information based on price
• Higher quality = higher price
• Convey status
• Value Based upon Perceived Satisfaction
– Reasonable Price = Perceived Reasonable
Value
• Exchange based on expectation of satisfaction
The Importance of Price to
Marketing Managers

The
Theprice
pricecharged
chargedto to
Revenue
Revenue customers
customersmultiplied
multipliedby
bythe
the
number
numberofofunits
unitssold.
sold.

Profit
Profit Revenue
Revenueminus
minusexpenses.
expenses.
Trends Influencing Price
Flood
Floodof
ofnew
newproducts
products

Increased
Increasedavailability
availabilityof
ofbargain-priced
bargain-pricedprivate
private
and
andgeneric
genericbrands
brands

Price
Pricecutting
cuttingas
asaastrategy
strategyto
tomaintain
maintainor
or
regain
regainmarket
marketshare
share

Internet
Internetused
usedfor
forcomparison
comparisonshopping
shopping

Economic
Economicsituation
situation(recession)
(recession)
There are several possible pricing
objectives:

1.profit maximization
2.revenue maximization
3.market share maximization
4.attainment of the desired prestige or
quality leadership
5.penetration, survival or liquidation
Pricing objectives:
6. scarcity pricing or market
skimming
7. cost recovery
8. subsidy pricing
9. marginal pricing
 The Demand
Determinant of Price

The
Thequantity
quantityof
ofaaproduct
productthat
that
Demand
Demand will
willbe
besold
soldin
inthe
themarket
marketat
atvarious
various
prices
pricesfor
foraaspecified
specifiedperiod.
period.

The
Thequantity
quantityof
ofaaproduct
productthat
thatwill
will
Supply
Supply be
beoffered
offeredto
tothe
themarket
marketbybyaasupplier
supplier
at
atvarious
variousprices
pricesfor
foraaspecific
specificperiod.
period.
The Cost Determinant of Price

Types
Types of
of Costs
Costs

Variable
Variable Fixed
Fixed Cost
Cost
Cost
Cost

Varies
Varies with
with changes
changes Does
Does not
not change
change
in
in level
level of
of output
output as
as level
level of
of output
output changes
changes
The Cost Determinant of Price

Average
AverageVariable
VariableCost
Cost(AVC)
(AVC)––total
totalvariable
variable
cost
costdivided
dividedby
byquantity
quantityof
ofoutput
output

Average
AverageTotal
TotalCost
Cost(ATC)
(ATC)––total
totalcosts
costsdivided
divided
by
byquantity
quantityof
ofoutput
output

Marginal
MarginalCost
Cost(MC)
(MC)––the
thechange
changein
intotal
totalcosts
costs
associated
associatedwith
withaaone-unit
one-unitchange
changein
inoutput
output
The Cost Determinant of Price

Markup
Markup pricing
pricing

Keystoning
Keystoning
Methods
Used to
Set Prices Profit
Profit Maximization
Maximization
Pricing
Pricing

Break-Even
Break-Even
Pricing
Pricing
 Markup Pricing

The
Thecost
costofofbuying
buyingthe
theproduct
product
Markup
Markup from
fromthe
theproducer
producerplus
plusamounts
amounts
Pricing
Pricing for
forprofit
profitand
andfor
forexpenses
expensesnot
not
otherwise
otherwiseaccounted
accountedfor.
for.

The
Thepractice
practiceof
ofmarking
markingup
upprices
prices
Keystoning
Keystoning by
by100
100percent,
percent,or
ordoubling
doublingthe
the
cost.
cost.
 Profit Maximization

AAmethod
methodof
ofsetting
settingprices
pricesthat
that
Profit
Profit occurs
occurswhen
whenmarginal
marginalrevenue
revenue
Maximization
Maximization equals
equalsmarginal
marginalcost.
cost.

The
Theextra
extrarevenue
revenueassociated
associated
Marginal
Marginal with
withselling
sellingan
anextra
extraunit
unitof
ofoutput,
output,
Revenue
Revenue(MR)
(MR) or
orthe
thechange
changeinintotal
totalrevenue
revenuewith
with
aaone-unit
one-unitchange
changeininoutput.
output.
 Break-Even Pricing

Break-Even Total fixed costs

=
Quantity Fixed cost contribution

Fixed cost
Contribution
= Price - Avg. Variable Cost
Other Determinants of Price
Stages
Stages of
of the
the
Product
Product Life
Life Cycle
Cycle

Competition
Competition

Distribution
Distribution Strategy
Strategy

Promotion
Promotion Strategy
Strategy

Perceived
Perceived Quality
Quality
 Stages in the
Product Life Cycle

Introductory
Introductory stage
stage –– prices
prices high
high

Growth
Growth stage
stage –– prices
prices stabilize
stabilize

Maturity
Maturity stage
stage –– price
price decreases
decreases

Decline
Decline stage
stage –– price
price decreases
decreases
 The Competition

 High prices may induce firms to

enter the market

 Competition can lead to price

wars
 Distribution Strategy

Selling
Sellingagainst
against
the
thebrand
brand
Stocking well-known branded items at
high prices in order to sell store brands
at discounted prices.
Marketing Channels

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Copyright ©2013 by Cengage Learning Inc. All rights reserved 30