Mr Bean

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Individual Assignment – Case Study 3

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Question 1

Branding is defined as the decisions in which an organisation makes through the usage of the combination of brand name, phrase, design, and symbols to identify its products and distinguish them from those of competitors, creating a distinctive and durable perception in the minds of consumers. To a seller in a food and beverage industry, it serves as additional differentiation of product on top of taste. It helps to communicate certain areas of benefit or satisfaction that their products and services can offer to consumers. When products are associated with a set of benefits and satisfaction as portrayed by the brand, consumers can identify with the branding and develop a preference for the food or beverage product. This is particularly important in such a commodity industry where numerous brands produce a certain product that is commonly available. Branding differentiation allows consumers to develop a preference for the brand and build up brand loyalty such that the consumer returns consistently to purchase the product or visit the outlet, in turn generating higher sales volume.

Beyond that, consistent delivery of satisfaction to the consumers can help further build on the loyalty to raise the asset value of the brand in the form of brand equity. From the perspective of the seller, they would want their food and beverage product to be highly associated with the product class such as soya bean, such that cravings from the buyers for that product class will be quickly associated to their brand. With a non-durable consumer good like food and beverage, maintaining high sales frequency is important. Thus successful branding can help stimulate repeat purchases and protection against product substitution by consumers. It reduces competition and on pricing since brand equity provides a competitive advantage and...