Branding in Modern ommercial World - Assignment Example

Branding Questions Q1 – What makes us spend? According to studies, income drives consumer spending. That is, an increase in one’s income triggers him or her to spend more (Ferrell, Fraedrich, and Ferrell 2005). However, this is not the only factor that makes people to spend. Availability of credit has for a long time been encouraging people to spend on things they even did not plan for. For instance, with the emergence of fashions and trends, especially in the electronic industry, people are attracted to new brands even when their previous purchases are still in good conditions. In addition, the marketing approaches used by companies easily make people to spend. For instance, Tesla Company, on top of producing hybrid vehicles, also provides its clients with charging stations and free repairs. These kinds of after-sales services attract clients and make them spend. In addition, some companies use certain celebrities to endorse their products. Fans and people who are associated with such celebrities will always want to buy things which they are associated with or endorsing. In life, there are certain things that people cannot do without. These are basic needs or necessities. People find themselves spending on these products because they are unavoidable. Tracking the developments in technology for the last ten years reveals the world’s significant effect on the growth of e-commerce. As a fact, the explosion of e-commerce sales did not just occur overnight. The sales have steadily been increasing year-by-year driven by technological advancements. As a result, the wide availability of access to broadband Internet, the introduction of the smartphone, and the increasing dominance of the online retail platforms have all combined to make the Internet a vital aspect in the shopping experience of most consumers. Some brands have sentimental value in the lives of consumers making it an important factor that drives them to spend. At times, the sentimental value leads to brand loyalty. In marketing, most people are known to purchase certain products because they are loyal to the brand. For instance, Apple has been known to produce some of the best smartphones in the world, people who have had an experience with Apple would always want to spend whenever a new product is launched. In some cases, companies produce targeted products such as toys and even computer games. In such cases, parents are forced to spend because their children have requested or they just want their children to have a good experience. Q2- Fully explain the foundations of brand development? In the field of marketing, a brand is analogous to a company logo.  Brands are the foundation of all activities of marketing. Thus, branding means shaping or fashioning the identity of a company, from its name to the encounters it has with its clients. Since the company encounters and interacts with the public, they view it differently (Ferrell, Fraedrich, and Ferrell 2005). As has been established through research, this perception is usually an emotional response, beyond the offerings of the company. In order to understand the foundations of branding, it is can be divided into four elements. Brand Promise Since brands are developed for meeting a need. The brand promise is perhaps the single most important aspect that the company has promised or working hard to deliver to its clients. Just as it is difficult to repair an image that is defamed, brands are badly damaged when they are not able to keep the promise. In general, a brand promise is a term that summarizes everything that customers should expect from interacting with the company, and how they should feel as a result of being associated with the brand. Brand Position Brand position describes those people that are addressed by the offerings of a company. In other words, it is all about what the company does and its targeted market. Brand position has also been used in the field of marketing to mean the uniquely added value of the company, and how clients benefit from such offerings. Other scholars have used the term to mean key competitive differentiators of the company. In short, brand position simply means features that make the brand attractive or appealing to end-users when compared to those offered by competitors. Brand associations In marketing, associations of a brand are the unique features that identify it. Some of these could be the mission statement, prices, slogans, colors and even a logo (Ferrell, Fraedrich, and Ferrell, 2005). In general, the brand associations significantly reflect the brand promise, and support the brand positioning statement. As well, it relates to the history of a company, and how such a history injects value to its brand. Brand Personality Every person is known or identified by something unique. Brands also have some traits or features that make people to single them out from the rest. One of these traits is the way the company connects with its stakeholders. A company is perceived positively when its interaction with its clients is also positive. In short, brand personality is often an emotional response to the offerings of the company by customers. Q3 – Display understanding of the hybrid consumer and apply to leisure The hybrid consumer is a term associated with the changing trends in the food industry. According to consumer market research, consumers are more and more losing interests in mid-market products. Instead, they are trading down the daily value-for-money products, such as basic foodstuffs. As the trading down continues, using money saved, hybrid consumers are highly trading up to luxurious, premium, high-end offerings that mainly matter from a social and an emotional outlook. Some of these products are found in upscale hypermarkets (Ferrell, Fraedrich, and Ferrell, 2005). Due to this trend, the food sector is becoming more and more polarized into value and premium, leaving lower-end and mid-level players with a constricted market share.   This phenomenon is brought about by many factors. In the context of leisure, the advent of discounters has considerably added to the options of consumers to trade down. This is in fact evident in the way private label products have grown or increased trading up options in recent years. The use of social marketing and increased employment of the Internet, as a method or tool to relate products and prices, has as well resulted in greater consumer awareness regarding leisure products. Moreover, macroeconomic developments have contributed to the “hybrid consumer” phenomenon. Specifically, the recent global recession and subsequent recovery has accelerated the existing duality in the market. As a result, constraints on disposable income as well as the declining confidence have stimulated trading down on basic products. Even with this aspect, end users still want or are willing to sporadically, even in tough economic times, pay more for premium, high-end products. Socio-demographic factors also play a key role in encouraging the hybrid consumer trend. For instance, as the inclination to leisure products increase, the purchasing power of women is also growing. As such, women are increasingly influencing household spending. In fact, research shows when compared to men, women are more objective when making purchasing decisions. Furthermore, younger people who use social media are likely to make purchases based on merits and not their loyalty to a particular brand. With this trend at hand, a number of supermarkets are employing strategies such as the use of value-products to sell premium products (Ferrell, Fraedrich, and Ferrell 2005). Mainly, these strategies are used to attract potential customers with value-for-money offerings, whilst at the same time aiming to sell premium products to the same customers. For instance, in the United Kingdom one of the well-known coffee shops has been offering low-priced coffee as a way of generating traffic and at the same time selling premium food items, such as sandwiches. Q4 - Why is it important to understand consumer behaviour? A consumer is the most important person in business. In fact, the business usually revolves around the consumer. Therefore, while running a firm, it is important to gain a good understanding of the target market. Consumer behavior revolves around tastes and preferences, and purchasing patterns just to mention but a few. It also revolves around activities/process followed by clients in making any purchasing decision. Consumer behavior also incorporates ideas from a number of sciences, including; biology, psychology, economics and chemistry (Ferrell, Fraedrich, and Ferrell, 2005). A business can be able to satisfy the wants and needs of consumers better if it has a clear understanding of their patterns and trends. It is important for marketers to understand the needs of consumers. First, a marketer needs to identify his target end-users, and understand their psychologies, lifestyles, spending capabilities, income, and mentalities to provide them with the appropriate product. People from lower income groups would not be interested in purchasing premium and luxurious products. This group would first fulfill their basic physiological needs such as food, shelter, and clothing. Attempting to sell luxurious products, such as a sport car, to someone who finds it hard to make ends meet would absolutely be a challenge. Specifically, in this segment, people would be more interested in purchasing food products such as fresh fruits, and vegetables, which are essential for their survival instead of spending on luxurious products. In general, marketers and businesses need to understand the measures consumers use in making their purchasing decisions to be in the position to compete successfully in the market. The bottom line is that once marketers understand their behaviors, they can easily design and formulate marketing strategies to help their offerings become the one that clients opt for. This would eventually lead to an increased profitability for the business. Furthermore, once marketers understand things that are driving consumer consumption, they may also influence their buying decisions thus generating a demand for their offerings. In short, all marketing deliberations are based on knowledge and assumptions of consumer behavior. Studying consumer behavior is known to be a complex process, although understanding consumer behavior is vital to marketers as they can use the obtained information to provide value and customer satisfaction. They also use it to target customers effectively, create competitive advantage, expand the knowledge base in the marketing field, and apply marketing strategies toward a positive societal effect. Q5 – Explain brand architecture and apply context using relevant examples Brand architecture simply means the structure of different brands within a firm. It is basically the manner in which different brands within the portfolio of an organization are related to one another, and differentiated from each other. There are three levels of branding. The first category includes corporate branding, family branding, and umbrella branding. Examples of these brands include; Heinz and virgin group. According to branding specialists, these are consumer-facing brands employed across all the activities of the organization. These brands may as well be utilized in collaboration with product descriptions or sub-brands. A good example is Virgin Trains or Tomato soup associated with Heinz (Ferrell, Fraedrich, and Ferrell, 2005). The second category of brand architecture is composed of endorsed brands and their sub-brands. Examples in this case include; Sony PlayStation and Nestle. These brands entail a parent brand, which may be associated with an umbrella brand, a family brand or corporate brand as an endorsement to an individual, product brand or sub-brand. Generally, the endorsement should inject some credibility to the sub-brand that is being endorsed in the eyes of consumers. The other category of brand architecture is made of individual product brands. Examples in this case comprise Pampers of P&G. In most cases, the individual product brands are offered to end users, and the identity of the parent corporation is given little recognition or positioning. In general, the architecture of brand should be able to define the diverse leagues of branding within a firm. As it has been seen, it should be able to show the way corporate brands and sub-brands connect; and how sub-brands are used to support the core intention of the corporate brand or the parent company. Often, deliberations about brand architecture are actually concerned with the approaches used to manage parent brands, as well as a family of sub-brands. This helps in maximizing the value of shareholders; it can also include using model techniques of brand valuation. For instance, under Boston matrix, brands that are well-positioned, and are performing well can be identified easily using performance indexes. The bottom line is that it is important to document and guide the strategy of brand architecture outside of changing times. This can help in maintaining long-term brand consistency, uniting stakeholders, and successfully expanding the firm’s market share. All these aspects play a key role in determining how to successfully inject new products and services, maintain the customer loyalty, identification of relevant brand messaging, positioning, and voice opportunities. The brand architecture also helps in re-invigorating or transitioning lower impact brands in the firm’s portfolio, and uncovering new target audience groups. Therefore, brand architecture helps in defining the different types of brands and sub-brands with the target market in mind. In discriminating between different brands, pricing strategies also play an important role. That is, some brands or parent brands might be offered on premium front, but when it comes to sub-brands, some of them are offered to meet the middle and lower-end category. This again brings the idea of geography or market segmentation. When companies diversify into sub-brands, they are definitely introducing new products that cater to segments they did not serve previously. For instance, Pampers of Procter and Gamble is sub-brand, and it specifically caters to mothers of young children. Procter and Gamble, as a parent brand, offers soaps and other related materials to the general family segment. Q6 – Critique ethical behaviour in marketing practice Ethics is considered as the philosophical study of human conduct, with the emphasis on determining of right and wrong. However, for marketers, workplace ethics refers to rules governing the behaviors of organizational members, as well as the outcomes of marketing decisions. Therefore, from a normative perspective, ethical behavior in the marketing practice is defined as “business practices that emphasize trustworthy, transparency, and responsible organizational and personal marketing actions, and policies that demonstrate integrity as well as objectivity to consumers”. Ethical behaviors, in marketing, do not only require an endeavor to make ethical deliberations, but as well as avoidance of the unintended outcomes of marketing activities. In fact, this aspect requires consideration of major stakeholders as well as their relevant interests (Ferrell, Fraedrich, and Ferrell, 2005). Market orientation is considered a key variable for implementing of marketing strategies successfully. Some of the marketing strategies include; pricing policies, promotion and advertisements. However, it must be understood that a successful marketing strategy is not always associated with fulfilling the demands and needs of all stakeholders. For instance, whilst the customers of Wal-Mart get low prices, the company is highly criticized from all quarters for violating human rights and even environmental issues. The criticisms have resulted in an increasing negative consumer perception of the company’s corporate citizenship. At times, in countries such as China, Wal-Mart has been blamed for engaging in false adverts. For instance, the company, on its website, claims to be a people-centered organization yet it has been battling in court over employee discrimination claims. In addition, most approaches selected to enhance market orientation elevate the interests of customers over those of other stakeholders. For instance, Wal-Mart has majorly focused on customers and returns, a new direction should encompass all company stakeholders, especially those that have a direct interest in the conduct and operations of the firm. High standards of ethics require both individuals and organizations to adhere to sound moral principles. In recent years, Fair Trade has actually surfaced to link consumers, who are ethically minded, with marketers concerned with producers who are disadvantaged in developing countries. For instance, Starbucks works hard to treat coffee farmers with fairness in their business dealings by paying high prices for their produce, engaging with them in long-term contracts, extending them affordable credit, purchasing their produce directly, and investing heavily in social projects in communities. This undertaking prevents and protects farmers from being exploited by other companies. However, general special aspects must be put into consideration when applying ethical behaviors to marketing. To begin with, to continue being in business, marketers must significantly contribute to profits as well as other objectives of the organization. Second, marketers must as well be able to balance their passion for success against the desires and needs of the general society. In most cases, maintaining this balance calls for trade-offs and compromises. In order to address these distinctive aspects, society has, to some extent, developed rules and standards to guide marketers in their endeavor to reach their objectives and goals in a manner that does not cause harmful effects to the society in general. Reference List Ferrell, O. C., Fraedrich, J. and Ferrell, L., 2005. Business Ethics: Ethical Decision Making and Cases. Boston: Houghton Mifflin. Read More