Marketing 4

GREETINGS TO all. It is getting closer and closer to the final examination, and you should all be doing some serious revision and practice questions. This week, our focus is branding and sales promotions as marketing activities. I will begin with branding.

BRANDING

The term ‘branding’ refers to giving a product a distinctive name, term, symbol, sign, design or combination of these, to enable it to be recognised easily. Branding is done on the outside package, i.e., on the bottle, box, wrapper, etc. Nowadays, hardly anything goes unbranded. A mark or symbol can be registered with the Registrar of Trade Practices so that other producers would not use that particular name or symbol, and the branding would differentiate one producer’s product from others which are similar and others which are dissimilar. A product may have a brand name, which is that part of the brand that can be spoken, e.g., Avon, or it may have a brand mark or a trade mark, or a combination of types of branding.

THE USE OF BRANDING

■ It gives identity to commodities. ■ It allows products to be identified from a distance. ■ It aids production, distribution, ■ It creates the need for advertising, ■ It results in an increased rate of turnover and, hence, increased profits. ■ It adds value to a product. ■ Trademarks provide the producers with legal protection of the unique features of the product so that competitors cannot imitate the products. ■ Different products can be grouped under different family brand names.

DISADVANTAGES

■ It creates the need for excessive, persuasive and competitive advertising. ■ It raises production costs. ■ In order to get sales, retailers are forced to tie up a lot of capital in branded goods. ■ The branding process may lead to monopoly by a product and thus increase the price to the consumer. Now let us move on to sales promotions.

SALES PROMOTIONS

This refers to special buying incentives for a particular length of time. It usually supplements advertising and may itself be viewed as a form of advertising. There are TWO basic types, dealer promotions and consumer promotions. We are concerned with consumer promotions. ■ Temporary price reductions. E.g. $25 off, etc. ■ Buy one get one free. ■ Giving out coupons: These are found in newspapers and magazines, and are redeemed at the counter either for cash or discounts from the total bill to be paid. ■ Trading stamps: Given freely to purchasers buying a certain amount of money’s worth of goods – one stamp for a certain amount of money spent; booklets of stamps are returned for goods or money. ■ Price packs: When goods are not selling well, they are packaged with other goods and sold for a value price. ■ Free gifts. ■ Samples. ■ Self-liquidation devices: Consumers are asked to return empty boxes, wrappers, toothpaste tubes, etc, which allows them to get a reduction in the price of certain items. Loss leaders: A loss leader is a popular product that is sold below market price to encourage customers to purchase them, and hopefully purchase other goods that they see in the same store.

■ I will end this lesson with three questions based on the information in the lesson: (a) Define ‘branding’ and ‘sales promotions’. (4 marks) (b) Explain TWO advantages and TWO disadvantages of branding. (8 marks) (c) Describe THREE sales promotions that can be used with a new brand of orange juice. (6 marks)

Total: 20 marks

Next week, we will look at advertising and distribution. These are also marketing activities. Be safe.