Are brand names being pushed off the shelf?

Definitions

brand -n. a particular make of goods, b (also brand name) trade name used to identify a specific product, manufacturer, or distributor. The sale of most branded products began in the UK at the turn of the century (some, e.g. Bovril (trade mark) and Horlicks (trade mark), were mid-Victorian) when manufacturers wanted to distinguish their goods from those of their competitors. As consumers became more sophisticated, manufacturers placed more emphasis upon promoting their brands directly to con­sumers (rather than to distributors), spending consider­ able sums on advertising the high quality of their products. Manufacturers believe that if they invest in the quality of their brands, consumers will respond by asking for their goods by their brand names and by being willing to pay a premium for them; manufacturers also believe they will be less susceptible to demands from distributors for extra discounts to stock their brands. For some products (e.g. perfumes and alcoholic drinks), considerable effort has gone into promoting brands to reflect the personality of their likely purchasers, market research has shown that for these products consumers can be persuaded to buy brands that enhance the image they have of themselves.]

own brandn. (also own label, private brand, house brand; (often attrib.) product sold under a distributor’s own name or trade mark through its own outlets. These items are either made specially for the distributor or are versions of the manufacturer's equivalent brand. Own brand goods are promoted by the distributor rather than the manufacturer and are typically 10-20% cheaper to the distributor than an equivalent brand. Own brands are sold principally by chain stores.

trade mark n. symbol secured by law or custom as representing a company, product, etc. It may consist of a device, words, or a combination of these. A trader who registers a trade mark at the Register of Trade Marks, which is at the Patent Office, enjoys the exclusive right to use the trade mark in connection with the goods for which it was registered. Any manufacturer, dealer, importer, or retailer may register a trade mark. Registration is initially for seven years and is then renewable. The right to remain on the register may be lost if the trade mark is not used or is misused. The owner of a trade mark may assign it or, subject to the Registrar's approval, allow others to use it. If anyone uses a registered trade mark without the owner's permission, or uses a mark that is likely to be confused with a registered trade mark, the owner can sue for an injunction and damages or an account of profits. The owner of a trade mark that is not registered in the Register of Trade Marks but is identified with particular goods through established use may bring an action for passing off in the case of infringement.

trade namen. 1 name by which a thing is called in a trade. 2 name given to a product. 3 name under which a business trades.

trade price n. price paid for goods to a wholesaler or manufacturer by a retailer, usually the recommended retail price less the trade discount.

( from the Oxford Dictionary for the Business World)

 

TRADEMARK "any mark, word, letter, number, design, picture or combination thereof in any form or arrangement, which (a) is adopted and used by a per­son to denominate goods which he marks and; (b) is affixed to the goods and (c) is not ... a common or generic name for the goods or a picture of them, or a geographical, personal or corporate or other association name, or a design descriptive of the goods or their quality, ingredients, properties or functions and; (d) the use of which is prohibited neither by legislative enact­ment nor an otherwise denned public policy." Restatement, Torts §715.

Protection from an infringement up­on a trademark is afforded by the com­mon law action for "unfair competi­tion" once the trademark in question has been sufficiently identified with the goods, see 175 F. 2d 795, and by an action under state law in those states which permit one to register trademarks and which impose civil and criminal penalties for their unlawful infringe­ment, see, e.g., 267 N.Y.S. 2d 269, or by an action under federal law which standardizes the common law action and registers trademarks for persons engaged in interstate commerce. See 15 TJ.S.C. §1051.

( from Law Dictionary by Steven H. Gifis)

 

Key Vocabulary (Marketing, branding)

 

For the consumer-in-the-street, brands,along with advertising,are the most visible parts of marketing. For the sceptical small business, marketing is sales with a college education and, of course, marketing is an important part of the business school curriculum.

Marketing courses usually begin with the credo of the marketing orientation,the idea that success and profitability are attained through identification and satisfaction of customer needs.The market orientation implies that marketing is not just a set of activities, but an attitude that should permeate the entire company. In this view, marketing is not just about a company selling what it makes, but about knowing what it should make in the first place.

However, even in large companies that describe themselves as customer-oriented,most employees probably regard marketing as the preserve of the marketing department. Here, the head of marketing may be in charge of a team of brand managersor product managers,each responsible for promoting the company's products in one country or group of countries. The actual activity of getting sales outletsto order products may be dealt with by the sales department and its sales force.

But this way of organising things is changing. Some companies are now organising product teamsaround individual products, carrying out all activities, from research and developmentright through to selling, with information from the team's direct contact with the marketplace feeding back into research and development. This corresponds more closely to the integrated market orientation preached in business schools.

Marketing can be approached in terms of the classic four Ps - product, price, place, promotion:selling the right product, at the right price, through the right channels, with the right support and communication. These are the components of the marketing mix.

What is the company's product range?What are its top-endor upmarket{AmE upscale), mid-rangeand bottom-endor downmarket(AmE downscale)products? Does it have an entry-levelproduct for people buying the type of product for the first time? Are new products often launched?What are some of the features of buying behaviour?

What are the different customer groups or segments?How are products positionedin relation to competitors' products? Who are the important competitors in the market, the key players?

What is the company's policy on pricing:how does it set its prices? What is the mark-upfor distributors? What sort of profit marginsare there for the company? Are there discounts to distributors and consumers? Are there price warsbetween competitors?

How are products distributed to reach the outlets?Who is involved in the distribution channels?What is the relationship between wholesalers, distributors, resellersand/or retailers?What are the relationships between them? Who has the upper hand?

How are products promoted? Is there a sales force?If so, how is it organised? Is there advertisingand/or direct mail?Who carries it out? Is packagingimportant? Who designs it?

These questions relate mainly to consumer marketing.They obviously need to be adapted for other companies, products and services. Bear in mind that most business takes place between companies: marketing in this context is industrialor business-to-business marketing.

 

Key Vocabulary (Advertising)

Whether or not you agree with Marshall McLuhan that advertising is the greatest art form of the 20th century, it is a big part of modern culture. Shared references feed into it and it in turn feeds into daily life: advertising catchphrases turn up in TV comedy sketches and everyday conversation. And we become 'ironic' about advertising, perhaps to show that we think we are able to resist it.

TV advertising is the most glamorous, but the other mediaare not to be ignored: radio, cinema, and the press, while hoardings(BrE) and billboards{AmE) are a characteristic part of the urban landscape. All these will be around for some time, despite Internet advertisingand its promises of online shopping.While there are still shops there will be point-of-sale displaysdesigned, among other things, to prevent last minute changes of mind about what brand to buy.

Advertising can be continued by other means with sponsorshipof particular events, or product placementin films, where the product's makers negotiate for their products to appear and be used by the film's characters. A related phenomenon is product endorsement,where a celebrity is used in advertising a particular product. This can be dangerous if, for whatever reason, the celebrity falls from favour.

Some very creative minds come up with seductive combinations of sound, image and words, but tests show that we often don't remember the brand being advertised. Quantifying the effect of advertising is very difficult and there has been a backlash against it in favour of other, supposedly more targeted,forms of communication. This usually means direct marketing,otherwise known as direct mail,but as those living in apartments who receive mailshotsfor gardening products know, the targeting can still be ludicrously imprecise.

Advertising agenciesmay offer to run direct mail campaigns, but what they are best at is creating traditional advertising campaigns.When a client becomes dissatisfied and the agency loses the accountthis is major news in the advertising industry and means a big loss of revenue (and self-esteem) for the agency.

Until recently, agencies took 15% of the advertiser's budget, and what they did not spend on advertising (designing ads and media buying:buying time on TV and space in the press for the ads to be run)they spent on 'free' services in pack design, corporate identity(a unified look in all of a company's communication, from its advertising to its letterhead, perhaps with the use of a logo), market research,and even strategic advice. These ancillary activities are below-the-lineactivities. Today, most of these are undertaken by specialist organisations, leaving agencies to concentrate on their core activity,-creating advertisements.

Despite all these activities and all this expenditure, the ultimate in advertising is word of mouth:friends and colleagues are often our most reliable sources of information. This form of advertising is usually free. All the advertiser can do is hope that it is positive.

 

Are brand names being pushed off the shelf?

 


According to the Wall Street Journal: "More and more shoppers are by­passing household names for the cheaper, no-name prod­ucts one shelf over. This shows that even the biggest and strongest brands in the world are vulnerable."

It has been clear for some time — principally since recession began to be felt in the major economies of the world - that the strength of brands has been under fire. During the second half of the eighties, the Japanese, for example, showed themselves willing to pay a huge pre­mium to buy goods with a smart label and image to match: they were fashion victims par excellence, be it in choosing their luggage (Louis Vuitton was much favoured) or in buying their booze, where a 20-year-old, version of a good malt whisky could fetch the equiv­alent of £60 or more. Over the past year or two, that en­thusiasm to spend big money on a classy label has waned markedly.

But we may be witnessing the death of the brand.

First, every story that now appears about the troubles being experienced by makers of luxury goods triggers wise nods and told-you-so frowns.

Two days ago, LVMH in France, which owns Moet et Chandon champagne, Louis Vuitton and the Christian Lacroix fashion house, reported lower earnings for the first half of 1993 than it did a year ago. As David Jarvis, in charge of the European operations of drinks company Hiram Walker, puts it: "A few years ago, it might have been considered smart to wear a shirt with a designer's logo embroidered on the pocket; frankly, it now seems a bit naff."

This conclusion fits with one's instincts. In the straitened nineties, with nearly 3 million out of work and 425,000 people officially classed as homeless in England alone, conspicuous consumption now seems vulgar rather than chic.

But just because flashy, up-market brands have lost some of their appeal, it does not follow that all brands have done so. Cadbury's Dairy Milk is just as much a brand as Cartier watches. Tastes may have shifted downmarket, but that does not mean that they have shifted from flash-brand to no brand.

The second strand of the brand argument is tied intimately with the effects of recession. No one yet knows to what extent the apparent lack of some brands' appeal is merely a temporary phenomenon. It may well be that, deep down, we would still love to own a Louis Vuitton suitcase rather than one from Woolworth's but while we are out of work or fearing that our job is at risk, we are not prepared to express that preference by actually spending the cash.

Third, the example of Marlboro is an extreme one. The difference in price be­tween premium brand cigarettes and budget rivals in the US had become "huge during the 1980s: a packet of Marlboro or Camel might cost 80 per cent more than a budget variety. Few brands in any area of consumer goods could hope to maintain so great a premium indefinitely.

And fourth, in looking at the brands argument globally, it is too easy to become misled by what is happening in an individual market. In the UK as a whole, about one third of groceries are under supermarkets' own labels. In the USA the proportion is only 20 per cent. But it does seem that the gradual shift from manufacturer-branded to retailer-branded goods is worldwide.

As David Jarvis of Hiram Walker says: "We believe that brands will retain their halo, but people are less inclined to pay for something just because it's a fashion accessory. They need to be reassured, that, the product is intrinsically better."

Reports of the death of the brand have been exaggerated. Reports of the death of the de luxe brand may be premature, but sound much more plausible.

(from The Guardian}

 


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