Branding poses several challenges to the marketer (see Figure 4-3). The first is whether or not to brand, the second is how to handle brand sponsorship, the third is choosing a brand name, the fourth is deciding on brand strategy, and the fifth is whether to reposition a brand later on.
To Brand or Not to Brand?
The ﬁrst decision is whether the company should develop a brand name for its product. Branding is such a strong force today that hardly anything goes unbranded,
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7. Maintain price and reduce perceived quality. Cut marketing expense to combat rising.
Smaller market share.
Maintained margin. Reduced long-term proﬁtability.
8. Introduce an economy model. Give the market what it wants. Some cannibalization but higher total volume.
Another factor leading to price increases is overdemand. When a company cannot supply all of its customers, it can use one of the following pricing techniques:
With delayed quotation pricing, the company does not set a ﬁnal price until the product is ﬁnished or delivered. This is prevalent in industries with long production lead times.
With escalator clauses, the company requires the customer to pay today’s price and all or part of any inﬂation increase that occurs before delivery, based on some speciﬁed price index. Such clauses are found in many contracts involving industrial projects of long duration.
With unbundling, the company maintains its price but removes or prices separately one or more elements that were part of the former offer, such as free delivery or installation. ➤
With reduction of discounts, the company no longer offers its normal cash and