What is branding and why is it important?

D = Definition. A brand is a name or image used to differentiate a product or business from its competitors.


Brands are included in the range of Product features in the marketing mix.


What do you think when you see the Nike Swoosh?



I = Importance. Brands are important because they are used to quickly identify a business and its products in competitive markets.

For example, you will instantly form an impression about the features, quality, pricing and so on of the products offered by this brand?




 

E = Example. Firms take branding very seriously. For example, Gap, the US clothing business got so much bad feedback from customers on social networks such as Twitter and Facebook when it tried to make changes to its branding recently that it abandoned its new brand image after only 1 week.

Have a look at this BBC link if you want to find out more about branding.

What is marketing and why is it important?

Definition: Marketing is the work done by the business in

Identifying customer wants and needs

• Informing the customer about the forms products
• Persuading customers to purchase the firms products

By its definition, we can see that marketing is focussed on actual and potential business customers.

  

Importance: We study marketing because it is an important business process. Marketing is important to the business it
Provides the business with information on the products that customers will want to purchase

• informs customers about the products offered by the business that will satisfy their wants and needs
• persuades customers to buy the products offered by the business that will satisfy their wants and needs

Effective marketing supports the most important business objective of business survival as follows

Effective marketing means that a business produces products that will meet customer wants and needs

1. Effective marketing informs and persuades customers to buy these products
• this increases sales for the business
• this increases business profits (assuming of course that the increase in sales are greater than any increase in costs to product and promote the new products!)
• increased profits help a business to survive in the long term – the most important long term objective of any business

 

For Example: For example, Apples iPad meets customer needs for a multi-featured portable wireless device. Those needs were identified by thr careful study of existing and potential customers by Apples marketing department. In addition the marketing department has promoted the devide (to inform and persuade) customers to buy it.

The iPad has sold amazingly well – leading to increased profits for Apple. Apple can use those profits to ensure its long term survival (e.g.by investing in new markets, new products etc)

Pfizer agrees record fraud fine

This article is a good example to use as support for various important BaM topics –

a) An example of the dangers of poor marketing strategy. Pizer has been fined for off-label promoting – that is – for promoting its products for uses that had NOT been approved by its external regulator (the US Federal Drugs Agency)

b) An example of possible diseconomies of scale – Pizer is the worlds largest drug producer: as such the business hay have suffered communication problems in making sure that the ruling by the FDA clearly prevented the firm from promoting its products for non- approved usage

c) An example of effective contingency planning – Pizers share price has remained unaffected by this news because the company had already put aside money to cover any fines in its 4th quarter in 2008

Steve Jobs's new trick: the Apple tablet

Apple - is reportedly just about to launch a tablet computer – small enough to carry in a handbag or briefcase but big enough to comfortably surf the web, read newspapers and watch films. It could be Apple's latest billion-dollar jackpot.

This article mentions some of Apples strengths - in summary you should realise that

1) Apples very loyal Customer base actually generates word of mouth promotion for new apple products
Feverish speculation all over the internet, gadget shoppers nearing mass hysteria and pundits predicting our lives will never be the same. It must mean that an Apple product launch is on the way.

2) Customers (employees too?) are strongly supportive of the charismatic leadership style of Apple CEO Steve Jobs
“Apple product launches are celebrated rituals where the talismanic Jobs, in black sweater and jeans, stands on a stage in San Francisco and unveils the company's latest innovation, cheered by adulatory crowds with near religious fervour. The Californian giant has sold more 200 million iPods since their launch in 2001.

3a) Apples strong customer base allows it to set a Premium Pricing Strategy for the Tablet (or any other new product).

Gene Munster, a technology research analyst estimated that an Apple tablet, with an onscreen keyboard like the iPhone, would cost around $600 (£363), putting it between the highest-end iPod Touch at $399 and the MacBook, which starts at $999. At $600, Munster calculated that sales of 2 million tablets could add $1.2bn (£727m) to Apple's sales next year.

3b) This pricing strategy allows Apple to increase sales revenues even at a time when its laptops may be in the the maturity stage of their product life cycle
Sales of Apple laptops are stalling as they face competition from netbooks, the smaller and lighter laptops that have proved popular among students. Rival companies have also introduced tablets but lack the hype that guarantees Apple mountains of free publicity

George Clooneys Favourite Coffee

Read this article that describes how Nestles ‘Nespresso’ coffee has been marketed and then answer the following questions.

Level 1: Knowledge
1) Define the terms ‘Marketing’ ‘Marketing Strategy’ and ‘Marketing Planning’

Level 2: Application
2a) Comment on the following statement (not in the article) “Nespresso” has been quite a successful product for Nestle”.
2b) Construct a table of the 4 marketing strategies you can identify in the case. Your table must include at least 2 examples of each of the 4P's!

Level 3: Analysis
3) At what stage of the Product Life Cycle is Nespresso? Examine the pricing strategy chosen by Nescafe based your analysis.

Level 4: Evaluation
4a) Advertising analyst Jim Boulton, says that while he personally thinks Nespresso is “consumerism gone mad", he admits its marketing has been "quite simply first class". To what extent do you agree with his comments?
4b) Evaluate Nescafes response to the criticisms made of its Nespresso product

Note Level 1 – Level 4 are questions based on IB standards where

Level 1: Knowledge
Level 2: Application
Level 3: Analysis
Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

Pound shops thriving in downturn

This short video from the BBC explains the success of so called "Pound shops" or "Budget Chain" stores in the UK right now.

Because if the current financial crisis, even quite wealthy people are looking for bargains and sales in these stores has increased, while more famous, "traditional" stores are losing sales.

One intersting thing to look for is an explanation of how these shops can also sell famous brands such as nescafe for under £1.