Battle of Brands

Essay by mbubblezCollege, UndergraduateB, January 2009

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Brand management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product's perceived value to the customer and thereby increase brand franchise and brand equity. Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand will continue with present and future purchases of the same product. This may increase sales by making a comparison with competing products more favorable. It may also enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of profit it generates for the manufacturer. This results from a combination of increased sales and increased price.

In this article we are going to talk about two types of branding, Private or Retailer's branding, and National or Manufacturer's Branding.

Retailer's Brand or Private Brands: Private brands are brands which are specific to a retail store.

It is when a large distribution channel member (usually a retailer), buys from a manufacturer in bulk and puts its own name on the product. This strategy is only practical when the retailer does very high levels of volume. The retailer either manufactures goods under its label or re-brands private label goods. They are also called the store brands as they sold by the retailer stores. The advantages to the retailer are:•more freedom and flexibility in pricing•more control over product attributes and quality•higher margins (or lower selling price)•eliminates much of the manufacturer's promotional costsThe advantages to the manufacturer of the private brand goods are:•reduced promotional costs•stability of sales volume (at least while the contract is operative)Private brand goods are generally cheaper than national brand goods because the retailer can optimize the production to suit consumer demand and reduce advertising costs. Goods...