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108
will nd sales quicker and will be accepted faster. The company must be
careful, however, since this is a two-edged sword. A poor product can bring
a bad reputation to an otherwise good and reliable brand name.
5 Some companies prefer to trade under a range of brand names. They
may well be in the same market, but they appear to be almost like competi-
tors, though often with complementary products. A good example of this is
United Biscuits, which trades under several «household name» brand names
including Maxwell House and McVities. The same product, in all but brand
name, can then be aimed at different market segments with different images,
prices and marketing strategies.
6 As we have noticed, some manufacturers have their own brand name,
while others sell under the brand name of a retailer. The manufacturers which
produce particular Marks&Spencer’s products will also produce their own
brand products. This method of production is very useful to the manufactur-
ers since it enables them to increase their own production runs and simply
change the labels. It also means that they can sell a large proportion of their
production runs without having to promote and market these themselves. In
other cases, producing own-label products for retail chains is the only way
for manufacturers to get them to stock their goods.
7 What this relationship does mean is that retailers like Sainsbury’s,
Marks&Spencer and Tesco are in a very powerful position. They control the
pricing, the distribution and the marketing. The manufacturer is very much
in their hands. The retail chain will be able to demand that pricing is in their
favour, the specications of the product meet with their approval, that par-
ticular stock levels are maintained, and that they receive priority treatment
even above the manufacturer’s own-label products.
Product names
8 The additional use of a name coupled with the brand name also helps to
identify a particular product. Ford is the company name and also the brand
name, but in addition to this all of their makes or models of car have a name
of their own. The Fiesta, Sierra, Escort and Orion are all examples of Ford’s
product names. This helps the customer to speed up the decision-making
process by recognising and selecting the product they want in a potentially
confusing situation. Ford could just call all of their cars «Ford cars» and give
them a number, or describe them as the «Ј13,000 Ford car». Each product
name establishes a specic image by which the customer can identify the
105
4. The decline stage of the product. Sooner or later something will hap-
pen that will forever kill off potential sales. It may be any of the following:
– it becomes technically obsolete;
– customer attitude changes towards it;
– a better product has appeared on the market;
– sales have peaked and are falling off;
– it is no longer protable to produce it.
Once any of the above has happened, the business is faced with having to
do something about it. Amongst the options are:
a) stop spending anything on the product in excess of paying to produce it;
b) raise the price and milk the last possible sales out of it and let it die a
natural death;
c) divert spending on to other products;
d) decide that, once demand reaches a particular level, production will
cease and wait until that happens before acting;
e) maintain production at a basic level to supply demand arising from
brand loyalty;
f) maintain the product at present levels and hope that additional mar-
keting activities can rejuvenate the product;
g) put the decline down to changes in trends and fashions and wait for
the product to become fashionable again.
Task 1. Choose the sentence that correlates with the information in the
text.
1.
a) Advertising is the usual method.
b) Nowadays, advertising is not so popular.
2.
a) Older products can be introduced into new markets.
b) Older products can’t be introduced into new markets.
3.
a) A product’s life cycle starts when a product is fully developed.
b) A product’s life cycle starts with its birth or introduction on the
market.
4.
a) The importance of looking after customers demands still plays a
prominent role.
b) Nowadays the importance of looking after customers demands
does not play an important role.
