Brand Essentials: Packaging, Pricing, Promotion & Distribution
Brand Essentials: A Guide to Success
The requirements of a good brand include:
- A short and easy name to pronounce and remember.
- A sonorous and appealing name that identifies the product or service across different languages.
Packaging and Labeling
Effective packaging and labeling should be:
- Practical
- Recyclable
- Easy to transport and store
- Protective of the product
- Clearly labeled with essential information (ingredients, expiry date, batch number, place of origin, nutritional information, name, customer service contact, handling instructions, toxicity warnings, instructions for use, and recyclability information).
Pricing Strategies
Pricing strategy depends on your objectives. Common strategies include:
- Penetration Pricing: Setting low prices when launching a product to maximize potential buyers. The risk is difficulty in raising prices later and the association of low prices with low quality.
- Skimming Pricing: Setting high launch prices to target a select audience that associates high prices with high quality and prestige.
- Psychological Pricing: Using prices ending in .99 to make the price seem lower.
- Cost-Based Pricing: Setting prices based on the company’s cost structure plus a profit margin.
- Price Discrimination: Setting different prices based on customer characteristics (e.g., ladies’ night discounts).
- Promotional Pricing: Offering discounts for volume purchases, 2-for-1 sales, liquidations, or other special offers.
Product Range
Range: The product lines offered by a company.
Line: A set of products that cover similar needs. For example, Nestlé has lines of ice cream, chocolates, and coffees.
Promotion
Promotion is a key marketing variable that increases sales by showcasing your product or service, strengthening the company’s image, and encouraging purchases. This is achieved through various policies, including:
- Advertising: Mass communication (impersonal and not directly from person to person) to inform about the existence and characteristics of a product or service, with the aim of increasing sales.
- Sales Promotion: Short-term activities, other than personal selling and advertising, to increase the effectiveness of sales efforts.
- Public Relations (PR): Personal communication to influence the relationship between the firm and the consumer.
- Merchandising: Techniques using objects or decorations to increase sales at the point of sale.
Distribution
Distribution is the set of processes that move the product from the company to the consumer. The utility of the product increases with distribution. The number of intermediaries between the consumer and the company determines the channel length:
- Short Channel: Few intermediaries.
- Long Channel: Many intermediaries.
Direct channels involve no intermediaries, with the product going directly from producer to consumer (e.g., showrooms, tailors).
External or foreign channels involve distribution companies that handle the transfer of products and intermediates.
Example: Producer – Wholesaler – Retailer – Consumer
Other distribution forms include:
- Franchise: A contract where a company grants a third party the use of its name and the right to sell its products in exchange for a percentage of profits. This option involves fewer risks.
- Internet Sales: Selling online.
- Vending Machines: Automated sales.
- At-Home Sales: Direct sales (e.g., door-to-door).
- Exclusive Sale: Selling an exclusive brand in a store (e.g., a department store).
- Corners: Selling a particular brand within a dedicated space in a store (e.g., a department store).
Definitions
- Advertising: Impersonal service and bulk sales.
- Sales Promotion: Short-term incentives for consumers to increase buying or selling a product or service.
- PR: The discipline responsible for communication between an organization and its public.