BRANDING AND PROMOTION Lesson objective: To understand the importance of branding and promotion

Covered so far Topic 1.1 – Meeting customer needs – The market Including mass and niche markets Dynamic markets – Market research Product and market orientation Methods of market research Uses and limitations of these methods Market segmentation from market research results – Market positioning How businesses use market research information

Last week we started looking at Topic 1.3 Topic 1.3 – Marketing mix and strategy – Product/service design Design mix and how this might change – Branding and promotion Types of branding Building a brand and changes in branding Generic versus branded products Types of promotion

Last week We looked at the design mix and the social factors that can impact on a companies designs for their product/service Read through the case studies on the next slide and make notes on how social factors are impacting on the design of their products and services

Case studies – read through and make notes on each of these… Jaguar Land Rover are world leaders in the use of aluminium for lighter car bodies to help reduce carbon emissions and reduce carbon footprint: Toyota is replacing robots with skilled humans to ensure fewer defects, better quality and less waste: Muddy Boots Foods is ensuring traceability for its range of beef burgers by using known suppliers of beef and other ingredients: e Starbucks is an example of a global brand which also makes use of ethical sourcing:

Branding and promotion Promotion is an important element in the marketing mix – it involves businesses drawing attention to their products/services or companies Businesses generally use promotion to obtain and retain customers.

Promotion can support aims Promotion can also be used to achieve some specific aims; Tell consumers about a new product Remind customers about an existing product Reach a widely dispersed target audience Reassure customers about products Shows consumers that rival products are not as good Improve or develop the image of the business

Promotion can be…. Above the line or below the line Above the line involves advertising in the media. It can include television and newspapers amongst others Advertising may be placed into different categories; Informative advertising Designed to increase consumer awareness of products Persuasive advertising Designed to put pressure on customers to buy a product – often designed to peoples emotions, such as fear and pity Reassuring advertising Designed for existing customers. Designed to be comforting and suggest to customers that they were ‘right’ to buy the product/service. Often used for financial services (banks)

Copy and complete MediaAdvantagesDisadvantages Television Newspapers and magazines Cinema Radio Posters and billboards Internet

Below the line promotion This refers to an form of promotion that does not involve advertising. It can take many forms; Sales promotions Free gifts, coupons, loyalty cards, competitions, BOGOF offers, money-off deals Public relations Press releases, press conferences, sponsorship, donations Merchandising and packaging Direct mailing Direct selling or personal selling Exhibitions and trade fairs Conduct some independent research into these methods of promotion and create a fact sheet showing your findings

What affects the methods of promotion Cost - Not all businesses can afford to advertise on TV or in national newspapers, they have to find cost-effective and appropriate means Market type - Local businesses often rely on local media, businesses aiming at mass markets are likely to use more national forms of media Product type - Certain products are better suited to certain methods of promotion – e.g. you are unlikely to find a car in a BOGOF offer Stage in the product life cycle - Promotional methods often change as a product gets older. E.g. PR is often used only at the launch of a product Competitors promotions - Businesses will often copy successful methods of promotion used by rivals. Legal factors - Legislation is in place to protect consumers and it must be abided by – e.g. in the EU you cannot advertise tobacco products on TV

Types of branding The aim of a business s to build a powerful brand. Branding involves giving a product a name, sign, symbol or logo, design or any feature that allows consumers to instantly recognise the product and differentiate it from those of competitors Brands can come in a number of forms Manufacturer brands Own-label brands Generic brands

Branding Manufacturer brands These are brands created by the producers of goods and services. The goods or services bear the producers name. e.g. Kellogg’s Corn Flakes, Gillette razors. The manufacturers are involved in the production, distribution, promotions and pricing decisions of these products Own-label brands A.K.A distributor or private brands. These are products which are manufactured for wholesalers or retailers by other businesses. The wholesalers and retailers then sell the product under their own name. E.G. Tesco Baked Beans. The retailer will also sometimes create their own brand name. e.g. F&F sold at Tesco. These products allow retailers to buy from the cheapest manufacturer – reducing costs. These products are often similar to manufacturer brands in terms of quality

Branding Generic brands Some generic brands are products that only contain the name of the actual product category rather than a company or the product. E.g. Asprin, carrots. These products are usually sold at lower prices than branded items and tend to account for a small percentage of all sales

Benefits of strong branding Added value A strong brand may add value to a product in the eye of the customers. For example if a business can capture a desirable image that is reflected in its brand, it is likely to have a competitive edge. Perfume manufacturers often do this through celebrity endorsement. Adverts make you think that the brand is associated with a certain calibre of person – this can add value for the consumer Ability to charge premium prices Products with strong brands can be priced higher than those of competitors. This is due to customer loyalty over time. People are less likely to switch from a brand they know and trust. Often the brand is higher priced as it is associated with quality. E.g. Heinz

Benefits of strong branding Reduced price elasticity of demand Firms want their brands to have a lower price elasticity of demand. This means that a price increase will have less impact on the sales of the product. E.g. if price elasticity of demand is -1.5, this means a 10% increase in price would result in demand falling by 15%. However if the price elasticity of demand was -0.9, this would mean that if prices were to increase by 10% sales would only decrease by 9%. We will look at this in more detail when we cover price elasticity of demand later in the course

Ways to build a brand Exploiting a USP If a product has a USP it is easier to differentiate and make it stand out from competitors. This can be through exclusivity as a USP (luxury goods, such as Prada), or through making exclusive promises (money back if not satisfied) Advertising A business might use advertising to introduce a new brand. Once the brand is popular, advertising is likely to continue in order to remind consumers that it is still out there. Advertising spreads the word about the brand John Lewis are now so well known for their iconic Christmas adverts people had a countdown to it being released. The popularity of them has helped to secure the brands popularity – at a massive expense. This years advert cost £1million to make

Ways to build a brand Sponsorship Some companies favour the use of sponsorship to build their brands. The majority of sponsorship spending is in sport. Sponsorship helps to; Raise brand awareness, create preference, develop brand loyalty Create positive PR and raise corporate awareness Build brand positioning – by linking the product to attractive images at events Support other promotional campaigns Create emotional commitment to the brand Promote good relations with customers

Ways to build a brand Using social media An increasing number of businesses are switching resources into social media. Adverts can be placed strategically on Facebook, Twitter, Instagram etc… The use of social media allows businesses to focus more easily on particular customer groups – social media allows them to get to know them better A social media presence may suggest to the consumer that the business cares – for example if something goes wrong it is reassuring to know there are numerous ways to get in contact A large number are using social media for viral ads to attract younger customers – such as this recent campaign from KFC who wanted to attract younger female customers

Changes in branding and promotion to reflect social changes Businesses are under constant pressure to keep up with trends, fashions, new technology etc… this means they must constantly be reassessing the advertising methods they use. Since the rise of the internet, most firms now have some form of online presence – because this is what consumers want

Other recent developments Viral marketing Viral marketing is any strategy that encourages people to pass on messages to others about a product or business. R6ntTJroY-knDrZkNKdFb R6ntTJroY-knDrZkNKdFb Social media Some businesses are using social media that already exists (Facebook), others like Virgin Atlantic are creating their own social hubs. The amount spent on social media over the next 5 years is expected to almost double

Recent developments Emotional branding This refers to the practice of using the emotions of a consumer to build a brand. Apple has done this through creating a connection with their customers that makes them develop a love affair with the brand and in turn long term loyalty. The same can also be said for football clubs – even when they are performing badly fans feel loyalty to them

Five whys and a how – copy and complete QuestionsAnswer Why do brands matter? Why do firms love to think about viral marketing? Why may a large company be reluctant to rely on social media for its brand image? Why may short-term promotions be a mistake in the long term? Why might designers need to think about ethical sourcing? How important is branding for a business-to-business company?

Key term cards Above-the-line promotion Advertising Below-the-line promotion Emotional branding Generic brands Manufacturer brands Marketing mix Merchandising Own label, distributor or private brands Point of sale Promotion Public relations Sales promotions Sponsorship Viral marketing

Independent study task Evaluate whether it is time for a brand such as Cadbury Dairy Milk to abandon traditional TV and press media to spend their whole advertising budget on digital and social media 20 marks