1.3.2 Branding and Promotion

Branding and Promotion

Key Definitions 

Branding: The process of making a brand or product memorable and distinctive from other similar brands or products. 

Promotion: One of the '4 Ps' of the Marketing Mix that covers how a brand or product is marketed to inform customers about the brand or product and persuade customers to buy the product.

Marketing Mix: A tool that consists of the '4 Ps' of marketing, which are the Price of the product, Product, Promotion of the product, and Place that the product is sold. This is important to consider when building a successful brand.

Individual Brand: When an individual product becomes known as the brand because the branding of the product has been so strongly enforced that producers forget the name of the producer. An example of this is Marmite.

Brand Family: When a single brand name is used in the promotion of multiple goods. It is also known as 'Umbrella Branding', and an example of this is Cadbury.

Corporate Brand: When the name of the corporation is used in the promotion of a brand or product under the belief that it adds credibility to the brand, for example, Nestle uses corporation branding. 

Unique Selling Point: A consumer benefit that no rival can match due to, for example, being protected by a patent. Also known as a distinctive capability. 

Added Value: The way the business adds to the price their products by changing it slightly in one or more ways making it, for example, more convenient for the consumer.

Price Elasticity: A measurement of the extent to which demand for a product changes based on how much its price changes.

Viral Marketing: A way of promoting a brand through the use of 'word of mouth' and/or social media to build a reputation and build the name of the brand.

Crowdfunding: A way of externally sourcing finance from many small investments given by individuals, often through a web-based platform such as GoFundMe.com. 

Sponsorship: A long-term method of building a brand personality through the association of the brand with something famous, such as Red Bull and the F1 racing team, or Etihad Airways and the Manchester City team.

Emotional Branding: A method of branding that appeals to the emotions to build a connection between the brand and the brand followers. 

Persuasive Advertising: A method of advertising that creates a distinctive image for the brand and creates clear images for the consumer.

Seasonal Pricing: Pricing that tends to change during seasons, often seen in seasonal industries such as hotel room and travel company prices.

Capacity Utilisation: The actual amount of usage of facilities, shown as a percentage. A company wants to have as much of this as possible in order to gain maximum profits. 

Types of Branding

1. Individual Brand

Some brands are so distinctive to consumers that they stand on their own, and the product becomes the brand. The manufacturer of these products have no interest in associating these products with the other brands produced by the other brands made under the same corporation, instead preferring to promote it as it is, with the brand name being the focus of promotion. Many companies do this as promoting the product as an individual brand will have no impact on other brands by the same manufacturer in case of publicity disaster.

2. Brand Family

Brand families are also distinctive to consumers as they remember and recognize the brand family by the logo on the packaging. The use of a brand family adds acceptability and familiarity to the brand, especially if it is from a reputable brand such as Cadbury. The use of a brand family also adds emotional qualities to the brand, even when it is largely built into the subconscious, such as building on childhood memories - something done by Cadbury and Coca Cola a lot with their promotional methods. 

3. Corporation Brand

A corporate brand may be used to promote the corporation behind the brand of the product as they believe it adds credibility to the individual brand name of the product being sold. This is done by having the name of the corporation that produces the branded product on the packaging in a clear labeling, in order to boost the name of the brand. By doing this it can be seen as a way of ensuring that the product is of high quality and of a high reliability.

Branding became important in the UK in the 19th century as it became a method of ensuring customers of quality and reliability in a world where powdered chalk was added to flour in order to sell more to increase profits. There are many benefits to having strong branding in place:

1. Added Value
A strong brand gives reassurance, and sometimes aspirational benefits, to the consumer. The brand sums up all of the benefits seen in the product by consumers. This, as a result, adds value to the brand and the purchase.

2. Ability to Charge Premium Prices
When a brand is the market leader in their chosen market this sometimes makes them able to charge premium prices for their products. As they have built such a strong brand for themselves, the extent of the brand loyalty of the customers makes the premium pricing strategy, and the brand itself, highly profitable.

3. Reduced Price Elasticity
Strong branding produces high brand loyalty, which can make customers willing to queue for hours and hours to buy the latest product from the brand. Brand loyalty lowers price elasticity, enabling producers to push prices up with little reductions in sales. 

4. Combatting Discounters
Strong branding enables companies to push the "weaker competition" out of the market. A strong brand gives a business the ability to stay strong and hold their market position against others who rely on discounting their products to gain sales, as weak brands always struggle to survive. 

Ways to Build a Brand

The process of building a brand has a similar timescale to the product life cycle, and it also has a similar appearance when shown on a graph. A brand that is built over a long period of time may be able to perform better than one built rapidly over a few months, as they may be able to cope better with changing times and bad publicity. The ways of building a brand include the following:

1. Unique Selling Points

These are extreme versions of product differentiation, and are highly effective in the short term when building a brand - especially when the USP is something that could be easily copied by another rival business. In most cases, the USP of the product is the brand name. 

2. Advertising

Advertising is key when building a brand as it is an easy method of delivering clear messages about the superiority of the product and the brand image over rivals. It is also a way of encouraging new, younger buyers to join the mainstream consumer decision and follow trends. 

3. Sponsorships

This is an attempt at building a brand over the long term, and when this is done cleverly it can help give a brand a 'personality'. This is often done successfully in cooperation with the sports industry, where large companies pay hundreds of thousands to sponsor teams or stadiums as it helps to build the brand image. 

4. Use of Digital Media

As not everyone can afford to spend such money sponsoring teams and stadiums, other businesses take advantages of the alternatives offered by social media platforms, such as "Adwords" by Google, which is used by companies to promote themselves as an alternative to a product searched - for example, Pepsi showing as the top result when someone searches Cola.

Changes in Branding and Promotion to Reflect Social Trends

Viral Marketing

For more than 30 years companies have been fascinated by the idea that brand messages can be spread virally, through word of mouth. In the past premium products were launched and promoted only in selected retail outlets and magazines in the hopes that the word on the brand and the brand image would spread. 

Modern social media has done wonders for the idea of viral marketing by adding a huge extra dimension to it: speed. One tweet promoting a restaurant could have people queuing to go there in seconds, and one negative Facebook review on another could have a restaurant lose customers within seconds. Companies are constantly trying to find ways to manipulate social media to their commercial advantage.

Social Media

This has become a major alternative to traditional promotional and branding methods in recent years due to the rise in platforms such as Facebook, Instagram, Snapchat and Twitter. There are 3 key benefits to utilizing social media as a promotional tool for digital marketing:

1. Promotional Targeting can be More Specific

Targeting can be tightened to specific tastes and habits of each individual, including noting changes in consumer behaviour and lifestyle.

2. Two-Way Interactions

The use of social media enables businesses and customers to interact directly with each other, helping the customer and the brand to bond, and also allowing businesses to gain instant feedback on their products and promotional methods. 

3. Crowdfunding 

People are interested in getting involved in businesses, but only if they share the aspirations of the business leaders and proprietors. The use of crowdfunding to source capital is a way of developing interest in the business and also building a two-way bond with customers. 

For a company, the ultimate question they need to consider is whether spending money on social media will provide a sufficient return on their investment. Even though this cannot be answered in a satisfactory way by most companies, the majority of these companies feel this investment is a good thing for them. If a company ignores the technological world and the rising power of social media, then they may be left behind.

Emotional Branding

Emotional branding is something that has also been around for years. It builds a two-way connection with the community of brand followers in a way that is more powerful and, in a way. more self sustaining. The community of brand followers should be a group of fans who share emotional commitments to the brand in question. However, in reality, for every dedicated fan there is also a disillusioned fan who is keen to break the emotional bond between the fan and the brand. 

What is Promotion?

Promotion is the general term used to describe the marketing activity around a brand to make customers more informed about it, and to persuade the customers to buy the product. There are different elements to promotion that can be grouped into "long term" and "short term". This distinction is what provides businesses the basis to analyze business situations and questions they may have.

Long Term Promotion

1. Persuasive Advertising 

This is designed to create a distinctive image for the brand. It has been used for years by many companies to persuade buyers that they create something unique and special. It also helps to create clear consumer images for large companies. 

2.Public Relations

This involves a business attempting to affect their consumer image without spending a lot of money on media advertising. It includes making contacts with journalists to try and get favourable mentions in articles about their products, and including references to any sponsorships. 

Short Term Promotion

1. "Buy One Get One Free" 

Offering sales like the "BOGOF" sale is considered a desperate, short-sighted attempt to increase sales as it often boosts demand at the cost of short-term profit margins and risking the undermining the credibility of the brand. 

2. Seasonal Price Promotion

Offering seasonal price changes, such as lower prices during the "off-peak" season, is a good way to attract more customers to boost capacity utilisation and therefore boost the cash flow of the business during the off-peak season.