There are several Brand Types that include manufacturer brand (also called national brand), private brand (also called distributor, reseller, store, or house brand), or a licensed brand.
Manufacturer brands are initiated by manufacturers and identify the producer. This brand Types generally requires the initiator involvement in its distribution, promotion, and pricing decisions. The brand quality is assured and guaranteed, and the aim of promotion mix is to build company and brand image and encourage brand loyalty.
The major feature of private brands is that they are resellers initiated brands. Manufacturers are not identified on the products. Wholesalers and retailers use private brands to develop more efficient promotions to build store image and generate higher gross margins. Shoppers’ Stop is a private brand. Wholesalers or retailers have the freedom and advantage of buying specified quality at an agreed upon cost from the manufacturer without disclosing manufacturer identity. In most markets around the world, manufacturer brands dominate. In developed countries such as U.S., supermarkets average more than 19 per cent private brand sales. The trend of private brands is slowly catching on in India. This is likely to speed up, with increasing numbers of large retail stores appearing in major cities of the country. Mukesh Ambani’s Reliance Retail is planning to invest Rs. 25,000 crores into its forthcoming retail operations. [ Brand Types ]
Paul S. Richardson, Alan S. Dick, and Arun K. Jain found that formerly, consumers viewed brands in a category in a ladder-like manner. The top rung was occupied by the most preferred brand and the remaining brands were arranged in descending order of preference. There are now indications that consumer perceptions of brand parity are replacing the brand ladder.
Licensed brand is a relatively new trend and involves licensing of trademarks. Entering into a licensing agreement, a company allows approved manufacturers to use its trademark for a mutually agreed fee. The royalties may range anywhere between 2 per cent to 10 per cent or more of wholesale revenues. The company obtaining the license would be responsible for all production and promotional activities, and would bear the costs in case the licensed product fails. The benefits of this arrangement can bring extra revenues, free publicity, new images, and protection of trademark. For example, P&G licensed its Camay brand of soap in India to Godrej for a few years. The disadvantage is that the licensing company loses its control on manufacturing and at times this may hurt the company’s name and lead to overstretching the brand.
Some manufacturers prefer to have branded products as well as their generic brands. Generic brands indicate only the product category, such as aluminium foil. Another form of generic brands is that the generic name of the product is mentioned and the manufacturing company’s name is written just to conform to legal requirements, such as paracetamol, or tetracycline. They do not include any other identifying marks. Generic brands are usually sold at lower prices than their branded versions. Generic brands are fairly common in the drug industry.