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Question
How does branding help in creating product differentiation? Does it help in marketing of goods and services? Explain.
Solution
Branding implies giving a unique name, sign, symbol, or term for the identification of a product.
Branding is one of the most important decisions for a marketer. Through branding, the firms differentiate their products from that other similar products. If instead of branding the firms opt for a generic name for their product, they would not be able to distinguish their product from that of competitors. This is because a generic name would represent the whole class of the product. For example, all shampoos are used for cleansing hair. However, one shampoo differs from that of others based on their brand name, symbol, or sign used by different shampoo manufacturing firms.
Branding not only helps in product differentiation, rather also helps in the marketing of goods and services. The following points highlight the importance of branding in the marketing of goods and services.
- Helps in Advertisement:- Branding helps a firm to advertise their product. Unless branding is not done a product cannot be advertised. Advertisement for a generic product can only create awareness about the category of the product as a whole. It cannot attract customers towards a specific product. On the other hand, an advertisement for a branded product helps in highlighting the specific qualities and features of the product.
- Enables Differential Pricing:- Good branding helps in creating a loyalty of the consumers towards the product. The firms can benefit from this loyalty and charge a different price for their product from that of their competitors. For example, if consumers become habitual of using a particular product they would not mind paying a slightly higher price for it.
- Facilitates Introduction of New Products:- Good branding helps in establishing a base for the introduction of a new product. If a new product is launched under an established and reputed brand then, it gets an initial boost and benefits from the brand name. Nowadays, many companies such as Samsung, Cadbury, etc. have multiple products under a single brand name.
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RELATED QUESTIONS
ABC Crackers Ltd., a fire-cracker manufacturing company launched some new products on the eve of Diwali in the market, which attracted many buyers. To meet the increased demand, the company employed people from nearby villages where there is a lot of unemployment. Because of the good behaviour of the management with the employees, more and more people wanted to join the company. As the products were in great demand in the market, a competitor imitated the products. The products of the competitor were not accepted by the consumers as it was a status symbol to buy the products of ABC Crackers Ltd. because of their quality.
1) Identify and explain the product-related decision because of which consumers preferred the products of ABC Crackers Ltd
2) Also, identify any two values which ABC Crackers Ltd. wanted to communicate to the society.
State any two advantages of branding to marketers of goods and services?
How does branding help in differential pricing?
Answer the following question.
JTM Ltd. launched 'Buddy line', an exercise book and comprehensive stationery brand name comprising of ball pens, gel pens, and geometry boxes after identifying the target market and understanding the needs and wants of the consumers of that market. All their products were of good quality and eco-friendly but expensive. They wanted to distinguish their products from that of their competitors. They spent a lot of effort, time, and money in creating the brand name, as they knew that without a brand name, they can only create awareness for the generic products and can never be sure of the sale of their products. The effort paid off and the demand for the products started growing. The customers liked the brand and became habitual to it. They did not mind paying a higher price. Over a period of time, it became a status symbol to buy the 'Buddy line' brand because of its quality. The consumers felt pride in using them.
Explain the advantages of branding to the marketeers highlighted in the above case.
Which of the following is the example of Dunlop?
A brand or part of the brand that is given legal protection is called ______.
What are the characteristics of a good brand name :
What is the importance of branding in marketing of goods and services.
That part of a brand which can be recognised but which is not utterable is called ______.
A name, term, sign, symbol, design or some combination of them used to identify the products — goods or services of one seller or ‘group of sellers and to differentiate them from those of the competitors is known as ______.
