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Product Policy and Planning 65

5.10 BRANDING

Brandingdecisions

Generic (Brandless) product

In International marketing, the product/service manufacturer has to take animportant decision about branding or not branding the product. There arefour levels of decisions possible with respect to branding:

1. No brand vs. brand2. Private brand vs. manufacturer's brand3. Single brand vs. multiple brand4. Local brands vs. global brands

Figure 5.4 gives the outline for decision-making process when branding isconsidered.

Private lable

Bjanded product

Manufacturer'sown brand

Fig. 5.4 Branding decisions.

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Singlebrand

Singlemarket

Multiplebrand

Globalbrand

Multiplemarket

Localbrand

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Manufacturers want their products to be branded, e.g., most of the USexport products are branded. But branding involves costs. These costs arewith respect to marketing, labelling, packing, and legal procedures. Theybecome very relevant in the case of commodities like salt, cement, diamonds,and agricultural and chemical products.

Commodities, when unbranded, are sold by grade and not by brand, i.e.,there is no uniqueness other than grade differential to distinguish theproducts of one supplier from the other if brandless product is vulnerable toprice swings or price-cuttings. However, the brandless product also allowsthe flexibility in quality and quantity control, which can result in lowerproduction, marketing and legal costs.

When a product is branded, it becomes a 'value added commodity', andthis includes the product attributes-physical, psychological (real orimaginary), and thebrand itself, e.g. IBM developed a distinct product

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66 International Marketing

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identity for Scotch Video Tapes in order to prevent them becoming justanother commodity in the worldwide price sensitive market.

Branding helps take advantage of previous price strategies because ofbetter identification, awareness, promotion, differentiation, consumerconfidence and brand loyalty. A good example of this would be Nike'sunique designs with respect to shoes, e.g. Waffel Sole. The productdifferentiation has helped Nike to become the top rated brand among seriousjoggers.

A manufacturer has also to take a decision whether he would promotehis product using a distributor's brand. Such brands are called private brands.The private brand guarantees a distributor because he cannot bypass thesupplier. However, a good distributor can create a unique product bybundling or unbundling product attributes and then adjusting the price.

If a company decides to market with a single brand, the brand is assuredof receiving full attention with maximum impact. However, the company maychoose to market several brands within a single market based on theirresearch studies that the market is heterogeneous and must be segmented. Forexample, Citizen, a well-known [apenese watch company, uses multiplebrands for different market segments. When a manufacturer uses his ownbrand name, he has to consider whether to use one brand name worldwideor different brands for different markets or countries. A single worldwidebrand is also referred to as international or universal or global brand. Theuse of multiple brands is referred to as local or individual approach. If maybe useful in aless developed country, since it can help. in the R & D efforts,benefiting local economy without the consumer having to pay high prices foradvertising and goodwill. Figure 5.5 gives a branding model for decision-making. which can be used in the international market scenario.

9 Brands are protected by trade ,market registration. High costs areinvolved in registering the trademark in a county, and hence themanufacturer has to use discretion with respect to which countries toregister. Obviously, in places where the demand is very weak, it may not befeasible. The Trade Registration Treaty (TRT) enables a company to protectthem with the international bureau of World Intellectual PropertyOrganisation (WIPO).

Packaging is another integral part of a product. It can be for bothfunctional and promotional purposes. A final package protects the productat minimum cost. However, in international marketing, there may bemandatory packaging protection, which may be required for promotionalpurposes.

5.11 WORLD PRODUCT

A product designed for international markets is termed as a world product.Zenith and RCA television sets could be cited as an example. ITT's world