Explain key branding decisions that marketers take.

Branding involves cost as well as risk of losing reputation if it fails to click in the target market. Marketers have to assess various options and make decisions when branding a product. Below are the key decisions that are of utmost importance-

1) Brand-sponsor decisions –
Here marketers decide whether to launch the product as –

a) Manufacturer brand – It involves building brand identity by applying the company’s/ manufacturer’s brand to products. For example, TATA, Nike.

b) Distributor’s brand or Private brand – it involves a channel member using its brand name or image on the product. Large retailers sign contracts with suppliers to manufacture products with retailers name on it. Usually large retailers display their less expensive products side by side manufacturer’s products. A customer would prefer a less expensive product with a well-known name which can be a manufacturer’s or retailer’s brand. The distributor’s brands enjoy less promotional costs resulting in high profitability. Distributor’s brand appeal more to price conscious customers.

c) Licensed brand – it involves manufacturers paying royalties to obtain licenses for using successful brand names.

2) Brand name decisions –
There are different brand name strategies-

a) Individual brand names – It involves giving separate brand names for each product. It is used to better position products in individual target markets when the product mix is fairly large. The main advantage is that even if the product fails it doesn’t has a negative effect on company’s image. Example, HUL (Hindustan Unilever Limited) has many brands in its bathing soap line like Dove, Lux, Pears, Lifebuoy, etc. Under detergents it has brands like Surf, Rin, Wheel. Nestle too has individual brand names – Maggie, Nescafe, Kitkat, Cerelac, Milkmaid.

b) Family brand name – It involves establishing brand for individual product lines. This strategy is used by manufacturers when the brand equity is high for their products. As there is no need to research on brand name, promotion efforts and costs related to it are minimised. For example, Sony, BMW, Mercedes-Benz.

c) Separate family name – A separate family name is chosen for each product family. When the organisation is into different businesses it is better to use different brand names. For example, TATA has developed different brand name for its businesses – TELCO, TISCO, TCS.

d) Corporate name along with individual product names – it involves combining the company’s trade name with their different products. Amul is a common name for its products like ice-cream, milk, butter, etc. Godrej too uses this strategy for its products like Godrej locks, Godrej almirahs, and Godrej refrigerators. Johnson and Johnson sells its products as Johnson’s bay soap, Johnson’s baby powder and Johnson’s baby shampoo.

3) Brand strategy decisions –
A company considers the below choices when it comes to brand strategy-

a) Line Extension – It involves introducing additional items in the same product category under the same brand name such as new flavours, added ingredients, package sizes, etc. For example, Knorr soups and Kissan jams with different flavours. HUL’s detergent brand Surf was launched with extensions – Surf ultra, Surf excel, Surf Excelmatic, etc.

b) Brand extension – It involves a company deciding to use an existing brand to launch a new product in a new category. For example, Gillette shaving cream, Gillete body talc, etc., Honda also uses it name for its different product categories such as automobiles, motorbike, scooter, lawn mowers, etc. This strategy helps in entering new category on the success of its existing brand image. A new product category under a successful brand gives instant recognition.

c) Multi brands – It involves introduction of additional brands in the same product category. For example, HUL soaps, P&G detergents. Here a failure of one brand does not affect the company’s image. The firm through this strategy targets different buying motives of customers.

d) New brands – when an organisation manufactures a product in a new category it is sometimes difficult to use it existing brand name. For example, it is unlikely for Apple to introduce bathing soaps with its brand name if it considers to get into manufacturing of soaps.

e) Cobrands – also known as dual branding, this concept is gaining momentum in modern times. For example, mobile buyers insist on buying mobile phones with snapdragon processors. So many mobile manufacturers do advertise their offerings being built with snapdragon processor. The organisation believes that the brand sponsor will strengthen its image in the target market.

4) Brand repositioning decisions –
Under influence of competition and changing consumer preferences, an organisation faces a challenge to reposition its brand. A competitor may launch a product similar to the organisations brand. This will eat into the organisations market share. The company considers 2 factors when repositioning its brand-

a) Cost involved in repositioning the brand in the market segment.

b) Sales and profits that the brand will earn basis the number of buyers, competitors and price range of other brands in that segment.

For example, apple launched its 5c model of its iPhones to serve the market segment in emerging markets which cannot afford premium and expensive handsets. The 5c models were cheaper and were made available in a variety of colours with a non-metallic body (plastic body).