SS3 Commerce Lesson Note on Product Differentiation and Branding

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PRODUCT DIFFERENTIATION AND BRANDING

Product differentiation can be defined as all means by which a producer attempts to distinguish his product from similar products made by rival producers.

BRANDING: This is the act of giving a distinctive label or name to a product e.g. coke, fanta, Pepsi etc.

REASONS FOR BRANDING

1. It encourages standardize pricing
2. It facilitates self – selection
3. It ensures easy recognition of product
4. Branding is useful in introducing new product
5. Brand loyalty may give a producer a greater control over the market
6. It prevents the adulteration of the branded product.
7. It leads to a more readily acceptance of a product by middlemen
8. It allows a producer to enjoy a sense of monopoly
9. To differentiate product
10. It informs the consumers about the existence of a new product

ARGUMENT AGAINST BRANDING

1. The cost of branding may be prohibitive
2. It is disadvantageous to the retailer in that he will have to stock many varieties of the same product in order to please all his customers
3. Too many brands may confuse customers
4. He creates false buying on the part of the customers

PACKAGING

This involves the development of a container and a graphic design for a product. It is a way of presenting a firm’s product in a safe and secured form to the consumers.

REASONS WHY MANUFACTURER PRE-PACKAGE THEIR GOODS

1. The middlemen are relieves of the burden of having to pre-package the goods.
2. False measuring and weighing by unscrupulous retailers are minimized.
3. Branding and labeling are possible with the packaging of goods.
4. It protects the goods as they move from the producers to their final users.
5. It makes advertising easy.
6. There is possibility of recycling.
7. It makes for easy handling.
8. It protects both buyers and sellers from any harm from corrosive products.

DISADVANTAGES OF PRE-PACKAGING.

1. It makes products to be more expensive and the cost is borne by the consumers.
2. Information on pre-packaged goods may be deceitful to buyers.
3. Buyers are compelled to rely on the information stated on the package.
4. Actual inspection of goods is not possible unless the package is to be destroyed.
5. End users often litter the environment with wrapper and empty cans.

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