Product (Cambridge (CIE) IGCSE Business): Revision Note

The importance of brand image

• Developing a strong brand involves creating a unique and identifiable name, design, symbol or other feature that differentiates a product or service or company from its competitors

  • This can help a business to add value, as customers are often willing to pay higher prices for brands they recognise and trust

• Branding helps businesses create awareness, develop strong customer relationships, generate loyalty and sets them apart from competitors

The three main types of branding

Manufacturer or corporate branding

• Manufacturer or corporate branding refers to the use of a company name or logo to promote all the products or services offered by a company

  • This type of branding is used by companies like Nestlé, Nike, and Apple

Product branding

• Product branding refers to the use of a unique name, design or symbol to promote a specific product

  • For example, KitKat, Coca-Cola, and McDonald's Big Mac

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

  • For example, ASDA chocolate, Tesco's Finest range, and Sainsbury's Basics range

Examples of the ways that brands have been built

Benefits of branding to a business

1. Differentiation

• Branding differentiates a business from its competitors

  • This supports marketing and advertising efforts to build memorable promotional materials and campaigns

2. Reduced price elasticity of demand

• Customers are less sensitive to price changes of products with strong and appealing branding

  • Customers who are loyal to a brand are more likely to continue purchasing the product even if the price increases

3. Ability to charge premium prices

• Customers may be willing to pay more for a product that is associated with a well-established brand

  • They often perceive products with strong branding to be of higher quality and therefore worth the extra cost

4. Brand recognition and identity

• Strong branding helps to build trust and credibility

  • This can create an emotional connection with customers, which helps generate repeat purchases

The role of packaging

• Packaging is the physical container or wrapping for a product

• It is also used for promotion and selling appeal

• Packaging is normally designed to

  • Present products in the most practical yet attractive way

  • Communicate the quality of the product

  • Catch the customer's eye when they shop 

  • Provide key information to customers

  • Establish the business's brand image

• To stand out from the competition, brands are investing more money than ever before in creative and environmentally friendly packaging designs

  • For example, Lush Cosmetics packages gift boxes with popcorn, which can be composted by the end user and uses less energy than plastic alternatives

Developing new products

• One way to stay ahead of the competition is by developing new products and innovating existing ones

• The process of new product development involves a number of important stages

1. Generate ideas

   • New product concepts are discussed and brainstormed using customer suggestions, ideas from competitors’ products, employees’ ideas and information collected through market and technical research 

2. Select the best idea

   • Ideas are weighed up with some dropped and others chosen for further research

   • This decision relates closely to costs and likely demand

   • Research includes looking into forecast sales, size of market share and cost-benefit analysis for each product idea

3. Develop a prototype

   • This allows the operations department to see how the product can be manufactured, any problems or difficulties arising from its production and how to fix them

   • Computer simulations are often used to produce 3D prototypes on screen

4. Test launch

   • The developed product is sold to on a small scale to a limited market to see how well it sells before its full launch

   • Changes may be needed prior to an expensive, large-scale launch

   • Digital products like apps and software run beta versions, which is a method of test-launching

5. Full launch of the product

   • The finalised version of the product is launched to the entire target market

Evaluating new product development