Recalling the discussion in the previous section

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Web Design: Introductory
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Chapter 3 / Exercise 4
Web Design: Introductory
Campbell/Shelly
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Recalling the discussion in the previous section about brand Names acting as a means of short-circuiting the search for information consumers appreciate manufacturers brands since they make shopping less time -consuming exponent. As already noted, manufactures bands are recognized as providing a consistent guide to quality consistency. They reduce perceived risk and make consumers confident and in some product fields (e.g. clothing, cars) they also satisfy strong status needs. Why , then, do so many manufacturers also supply distributors brand? First, it is important to understand why distributors are so keen on introducing their own brands. Research has shown that they are particularly keen on distributor brands because they enable them more control over their product mix. With a strong distribution brand range, retailers average rationalized their product range to advantage of the resulting cost savings LESSON 14: VALUE OF BRANDS
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Web Design: Introductory
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Chapter 3 / Exercise 4
Web Design: Introductory
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91 BRAND MANAGMENT and many stock a manufacturers brand leader, their own distributor’s brand and possibly and manufacturer’s brand. Trade interviews have also shown that distributor brands offered better margins than the equivalent manufacturers brand, with estimates indicating the extra profit margin to ‘be about 5 per cent more than the equivalent manufacturer’s brand. Some of the reasons why manufacturers become suppliers of distributors’ brands are: economies of scale through raw material purchasing, distribution and production; any excess capacity can be utilized; it can provide a base for expansion; substantial sales may accrue with minimal promotional or selling costs; it may be the only way of dealing with some important distributors (e.g. Marks & Spencer); if an organization does not supply distributor brands, their competitors will, possibly strengthening the competitors’ cost structure and trade goodwill. Consumers benefit from distributors’ brands through the lower prices being charged, but it is interesting to note that our own research found that consumers are becoming increasingly confident about distributors’ brands and no longer perceive them as ‘cheap and nasty’ weak alternatives to manufacturers’ brands, but rather as realistic alternatives. Brand and its Distributors Brand-Customer Relationship Brands should establish a relationship based on ‘love’ to collect a large number of loyal customers. The relationship based on ‘respect’ for superior performance is difficult to sustain. In this millennium, brands are promoted on customer experience. People today are not buying products, but experience. Even acquisition experience matters and so the distribution channel must live upto expectorants. A brand gains a lot by favourable post-purchase experience.

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