Product Branding (DP IB Business Management)

Revision Note

Flashcards

Written by: Lisa Eades

Reviewed by: Steve Vorster

Aspects of Branding

Branding is the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product/service or company from its competitors
Branding is a strategic tool that helps businesses create awareness, develop strong customer relationships, generate loyalty, and establish a perceived value that sets them apart from competitors

Diagram: types of branding

**The three different types of branding available to businesses**

Through consistent and effective branding efforts, companies can build a strong brand presence, cultivate customer loyalty, and achieve sustainable business growth

Manufacturer/corporate branding

This refers to the use of a company name or logo to promote all the products or services offered by the company
This type of branding is used by companies like Nestlé, Nike, and Apple

Evaluation of Corporate Branding

Advantages	Disadvantages
Creates a strong brand recognition and reputation for the company, which can increase customer loyalty and trust Allows the company to leverage its existing reputation and customer base to introduce new products more easily Helps to build economies of scale by promoting multiple products under one brand, which can reduce marketing costs and increase profitability	If a company's reputation is damaged by a product it can have a negative impact on all the products offered under that brand If the company faces intense competition in one market 9e.g smartphones), it may affect the sales of all the products offered across other markets (e.g laptops and desktops)

Product branding

This refers to the use of a unique name, design, or symbol to promote a specific product
- E.g. KitKat, Coca-Cola, and McDonald's Big Mac

Evaluation of Product Branding

Advantages	Disadvantages
Creates a distinct identity for the product which can help to differentiate it from competitors and increase brand loyalty Allows the company to market different products to different segments of the market e.g. Coco Cola and Coke Zero Can help to build customer loyalty and trust by associating the product with a specific quality and benefits e.g Dyson Vacuum Cleaners	The cost of creating and promoting a new brand for each product can be expensive Introducing new products under different brands is difficult as the business must build a new brand for each product from scratch Different products within the brand may have different levels of quality which can affect customer satisfaction

Own brand product

Own brand or private label branding refers to the use of a retailer's name to promote a specific product or service and is often used by supermarkets
- E.g. ASDA chocolate, Tesco's Finest range, and Sainsbury's Basics range

Evaluation of Own Brand Products

Advantages	Disadvantages
It can help retailers to differentiate themselves from their competitors by offering unique products It allows retailers to offer products at a lower cost than branded products which can help to increase sales and profitability It can help to build customer loyalty by offering exclusive products that are not available elsewhere	Own brand products may have a lower perceived quality than branded products which can affect customer loyalty and trust

Brands can be built using any one, or a combination of the following methods:
- By developing unique selling points (USPs)
- Through advertising
- Through sponsorship
- Through the use of social media

Examples of the way Brands have been Built

Method	Explanation	Example
Unique selling points (USPs)	USPs are the features that make a product/service stand out from its competitors Brands can build their reputation by emphasising these unique qualities in their marketing efforts	Apple is known for its innovative and sleek design and use of quality materials, which sets its products apart from its competitors The company has built its brand around this USP and is recognised worldwide for its premium design
Advertising	Brands can create compelling ads that resonate with their target audience, raise brand awareness, and communicate their value proposition With the right advertising strategy, brands create a strong emotional connection with their audience and inspire brand loyalty	Coca-Cola has successfully built its brand through advertising Iconic ads over the years have become synonymous with the brand E.g. The "Share a Coke" campaign encouraged people to buy Coca-Cola bottles with their friends' names on them and was a massive success
Sponsorship	Partnering with events, organisations, or individuals can help brands gain exposure and build their reputation by aligning themselves with positive associations or values	Nike has sponsored many high-profile athletes and sports events, such as the Olympics and the World Cup The business has built a reputation for being a brand that champions excellence and inspires people to be their best
Social Media	With the right social media strategy, brands can build a loyal following and create a community around their brand	Glossier has a strong presence on platforms like Instagram and it engages with its audience and shares user-generated content Glossier's social media strategy has helped the brand build a loyal following
Emotional Branding	A strategy where companies build strong emotional connections with their customers by appealing to their values, beliefs, and emotions	Brands like Patagonia and TOMS have built their entire brand identities around their commitments to environmental and social causes, which resonates with customers who prioritise these values

The Importance of Branding

Strong branding can provide several benefits to a business, including:
- Added value
  - Strong branding can add value to a product by creating a perception of quality, reliability and reputation
- Ability to charge premium prices
  - Customers may be willing to pay more for a product that is associated with a well-established brand, as they perceive products with strong branding to be of higher quality and therefore worth the extra cost
- Reduced price elasticity of demand
  - Customers are less sensitive to price changes of products with strong and appealing branding because customers who are loyal to a brand are more likely to continue purchasing the product even if the price increases
- Recognition & identity
  - This helps to build trust and credibility and create an emotional connection with customers, which helps to generate repeat purchases
- Business differentiation
  - Branding differentiates a business from its competitors and supports marketing and advertising efforts, which can use key elements to build memorable promotional materials and campaigns

Examiner Tips and Tricks

Strong brands also strengthen a businesses balance sheet.

Brands are considered intangible assets on a company's balance sheet. A strong brand adds to the overall value of these intangible assets, which may be an important part of a company's net worth and make it more attractive to investors.

Last updated: 18 June 2024

You've read 0 of your 5 free revision notes this week

Sign up now. It’s free!

Join the 100,000+ Students that ❤️ Save My Exams

the (exam) results speak for themselves: