HL MARKETING THEORYTYPES OF BRANDING IB BUSINESS & MANAGEMENT – A COURSE COMPANION, 2009: p208
BRANDING STRATEGIES The following branding strategies can be identified: • Family Branding • Product Branding • Company Branding • Own-Label Branding • Manufacturers Brands
FAMILY BRANDING • Family is branding is where an organization uses its strong name and reputation to launch new products under the umbrella of one of the existing brands. • This can help sales on as the products automatically have associations of the existing brand.
FAMILY BRANDINGMars Bar Ice Cream Example • It is now common for confectionary to have an equivalent ice-cream. The trend was started by Mars in 1988 with the launch of the Mars Ice-Cream Bar and has now turned into a huge industry. • Use of the strong Mars brand and proven taste meant that the risk of failure in this venture was dramatically reduced and it allowed the company to enter a new market quickly and at relatively low cost. • All marketing and promotion for the Mars brand helped increase sales of both the chocolate bar and the ice cream, resulting in higher overall sales and profits.
PRODUCT BRANDING • Also known as individual branding, product branding is where a business assigns a new brand name to each of its products, with no clear connection between them. • This does remove the key advantages of family branding when launching a product, but it does avoid the negative effects that come about if the product is a failure. • Product branding also makes it easier for businesses to sell off parts of their business without loosing complete control of their brand image.
PRODUCT BRANDING Unilever Example • Unilever owns many brands in numerous markets, such as Ben & Jerry’s ice cream, Persil washing power and Dove bath and soap products. • In November 2007, Unilever sold their Boursin cheese business for 400 million and the fact that it was not branded as Unilever, made it far easier to separate that business from the rest of the organization.
COMPANY BRANDING • Company branding can have similar benefits to family branding, but across a whole company’s range.
COMPANY BRANDINGVirgin Group • The Virign Group is a conglomerate that has a very large array of different products in different markets from finance to holidays to music and more. • However, it strongly pushes the Virgin brand across all these different lines. • Eg. The young modern image of Virgin has allowed it to enter the UK mobile phone market, despite having no reputation or image in that industry.
COMPANY BRANDINGVirgin Group Virgin Mobile Phone Market • Consumers will assume that that same qualities that they associate with other Virgin products will also be true to the mobile phone network, allowing the business to gain customers trust quickly and build sales rapidly as a result. • Other businesses trying to enter such a competitive market without this strong brand behind them will struggle to succeed against the established players in the industry.
COMPANY BRANDINGVirgin Group Virgin Trains: Negative Impact on Company Brands • It important to note than any negative publicity for the brand in any of the areas of its business are likely to have an impact on sales across the business. • Virgin Trains in the UK have are poor reputation for quality and this may have damaged consumers trust in the complete range of Virgin products as a result.
OWN LABEL BRANDING • Retailers can brand products under their own name. • This is particularly common in the supermarket sector, where own labels are becoming far more sophisticated. • Supermarkets often now stock a range of different own-label ranges, each aimed at a different sector of the market. • The UK’s largest retailer TESCO, own label food and drink ranges in the categories of TESCO value, TESCO healthy eating, TESCO Kids, TESCO Organic and TESCO finest.
OWN LABEL BRANDING • Offering alternatives to branded products in these specific areas allows supermarkets to gain a greater share of sales for their products. • This is important to supermarkets, as own-label products are usually more profitable per unit, than buying in branded goods. • However, these products cannot compete in all markets. • Eg: Products that require high levels of spending on R&D or have very strong premium brands are to crack for own-label ranges. • This is why you do not see then competing in upmarket clothing or in expensive cosmetics.
MANUFACTURERS BRANDS • These are brands created by producers rather than distributors of the product. Levi Jeans Example • Levi’s Jeans are reliant on other businesses for the distribution of their products, such as the iconic 501 jeans. • There are clear advantages to Levi Strauss & Co of having created a strong brand as this can ensure that the business is resistant to buyers trying to force the price down.
MANUFACTURERS BRANDS Levi Jeans Example • Levi Strauss & Co knows that any store selling jeans has to sell Levi’s to be credible and so it can hold out for a higher price that its rivals. • It also tries to control supply chains strictly to ensure that only designated supplies through official channels reach distributors.
MANUFACTURERS BRANDS Levi Jeans Example: Court Case • In a legal case in 2001 a number of retailers (led by Tesco) were challenging Levi Strauss & Co’s ability to restrict supplies through certain channels, claiming it was a restraint of the principle of free trade. • In the end, Levi Strauss won the case, keeping the power of its manufacturer’s brand intact.
GLOBAL BRANDING • As barriers to international trade fall and transport links improve, the world is getting smaller. • As a result, many Multinational companies try to set up global brands that can compete across borders. • This can save large sums of money, (eg: the same advertising campaign can be rolled out worldwide) • Hollywood film stars are also increasingly used to market global brands such as L’Oreal due to their international appeal. • The international aspect is even apparent in every McDonalds restaurant with their “I’m loving it” catchphrase printed in many different languages all over the cups
GLOBAL BRANDING • As people become more mobile and the Internet makes buying from all over the world a realistic option for customers, it is vital for multi-national businesses that they have a global identify and clear global brand. • However, it is also important that these businesses do not lose touch with their customers. • A generalized campaign that does not appeal strongly to any local group may end up damaging sales if local businesses offer a product and image that appeals more closely to regional tastes and trends.