Many products are so similar to other manufacturers’ products that consumers are entirely indifferent as to which one they will buy. For example, petrol is much the same whether it is sold by Shell, Esso, BP, Statoil, Elf or Repsol: such products are called commodity products because they are homogeneous commodities rather than distinct products with different benefits from the others on offer. At first sight, water would come into the category of a commodity product. Yet any supermarket has a range of bottled waters, each with its own formulation and brand name, and each with its loyal consumers. In these cases the original commodity product (water) has been converted into a brand. Branding is a process of adding value to the product by use of its packaging, brand name, promotion and position in the minds of the consumers. DeChernatony and McDonald21 offer the following definition of brand; A successful brand is an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely. Furthermore, its success results from being able to sustain those added values in the face of competition. This definition emphasises the increased value that accrues to the consumer by buying the established brand rather than a generic or commodity product. The values that are added may be in the area of reassurance of the brand’s quality, they may be in the area of status (where the brand’s image carries over to the consumer), or they may be in the area of convenience (making search behaviour easier). Commodity products tend to be undifferentiated in price (for example, petrol tends to be much the same price in petrol stations within a given geographical area. A differential of even 10% would be very noticeable). They also tend to have a low degree of differentiation in the product characteristics and the image. Branded goods, on the other hand, score high on both factors; since they command a premium price, this is likely to lead to an increased profit, which strengthens the case for developing a strong brand.
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