Summary Branding products and services

UNIT 5 BRANDING PRODUCTS AND SERVICES
Learning Aim A: Investigate the role of branding in a selected organisation
A3 Benefits and limitations of branding (M1)

Benefits of strong branding

 differentiates the product or service from the competition
 increases customer engagement
 increases customer loyalty and customer advocates
 can command premium prices/higher prices than non-branded products or services
 reduces price sensitivity
 increases value of the organisation
 makes consumer choice and recognition of products or services easier
 strong brand awareness leads to high sales and high market share
 retailers and service sellers are more likely to stock top-selling brands than less well-known
brands
 brand portfolios allow organisations to compete in many different marketplaces with a range
of product lines or services.

Limitations of branding

 may take years to build a brand
 high cost of promotion, keeping brand in the customers’ eyes
 loss of brand value for one product or service can affect a range of similar products or
services
 brands invite competition and copycats
 high cost of research and development in ensuring brand continues to develop and lead the
market.