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Basics of Marketing - Kotler Philip

Decisions on vintage designations

The first decision to be made is a decision on whether the firm will assign its brand name. In the past, most of the goods did without such names. Manufacturers and intermediaries sold goods directly from barrels, chests or boxes without any reference to the supplier. The first promoters of trademarks in the United States were manufacturers of proprietary medicines. Really vintage names have spread after the Civil War, when there were nationwide firms and nationwide means of advertising. Some of the brands of those ancient times survived to the present day. Among them, condensed milk "Borden", oat flakes "Quaker Oats", ointment "Vaseline", soap "Ivory."

The practice of assigning brand names has become so widespread that today almost any commodity has them. Salt producers pack in original containers, put on oranges a stamp with the name of the one who raised them, the usual nuts and bolts are placed in cellophane bags with the distributor's label, and spare parts for cars - candles, tires and filters - bear brand names that distinguish Them from similar products of other automobile companies. The brand name was successfully awarded even to chickens.

Frank Pardew, the head of the firm Purdue Pharms in Salisbury, Maryland, has turned into a branded product one of the main agricultural products for which price support has been established by law. And many consumers of the East coast of the country are already asking the "Pardew" chickens. Every year, Purdue spends about $ 1 million on television and radio spots, in which he extols the dignity of his chickens. The main theme of the advertisement: "Only a strong person can grow a tender chicken." To unsatisfied consumers, Purdue guarantees a refund.

Recently, there has been a trend towards the rejection of trademarks for a number of basic consumer goods and medicines. These goods are sold under their generic names in plain, one-color packaging, on which there is no manufacturer's designation (see box 16). The sense of supply of goods without branded designations is to reduce their price for the consumer by saving on packaging and advertising. So the problem of the presence or absence of brand designations on the product is on the agenda today.

Box 16. The supermarket chain offers products without branded designations

In late 1978, the firm "Dominix Fireworks", headquartered in Chicago, owning a large network of supermarkets, offered customers 40 products under their generic names. These were cheaper variants of the most common goods from the range of supermarkets, such as spaghetti, paper napkins and peaches, but without any vintage designations and in an artless one-color package. The firm offered products standard or slightly below standard quality at prices up to 30% below brands advertised nationwide, and up to 15% lower than products sold under private labels. Price reduction was made possible through the use of lower quality components, cheaper labeling and packaging, and minimizing advertising costs.

A year earlier, 40 unmarked goods were offered by another chain of Chicago stores owned by Jewel Food Stores. Now this company offers 140 products under their generic names, which account for about 4% of its total turnover. It was the success of the firm "Jewel" that forced the "Dominix" supermarkets to follow its example.

Saving on the prices of generic non-brand goods was a strong attractive factor from the point of view of the purses of American consumers in our century of high inflation. According to the survey of the research firm "A. K. Nielsen, 59% of buyers are aware of non-branded goods sold under generic names. At the same time, 44% of the knowledgeable already bought goods without brand designations, and 70% of them are going to make repeated purchases. The demographic profile of consumers of non-branded goods shows that they are people with large families, high incomes and higher education. Their average age is from 35 to 45 years.

Four out of every five buyers believe that lower prices are the result of a reduction in advertising and packaging costs. And only one out of every five believes that the low price is due to reduced quality. But the decrease in quality in this case is one of the main factors. For example, paper napkins can be less hygroscopic, and in a detergent powder - there are no flavors. But despite this, consumers are strongly impressed by the economy, and they especially liked such unmarketed products as paper products, nut paste, jam, canned vegetables and tomato products. The most insignificant impression was made by non-brand household goods such as detergents, softeners for fabrics, liquid bleaches.

Unmanned goods pose the greatest threat to firms distributing branded goods on a national scale that are not of high quality. In fact, why pay 30% for a branded product, if its quality is almost the same as the quality of its careless relative?