Fighting Brand in Business (Essay Sample)

FIGHTING BRAND IN BUSINESS
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Pricing is the monetary value charged on a product or service. The pricing strategies are based on the product themselves, customer demand, or the competitive environment (Gittelsohn, Trude and Kim, 2017). Pricing plays a critical role in the sale of a product. The price is paramount in the business; after the product, since it can be changed easily and shows the product's value. Setting the right price is a robust marketing tool pricing strategies are. Pricing of the product can be done using the markup strategy where the price equals the product's cost plus the profit that the organization intends to make. Competitive pricing involves setting prices similar to the prices in the market. For value-based pricing, the consumer buys the product based on the value placed on the product at hand; skimming the prices entails setting high prices for the products and services and later lowering the prices as one gets used to the market. Penetration pricing strategy entails the setting lowers prices by the new entrants to attract customers and later raisin the products.
A fighting brand is a new product or brand of the existing brand where the new product is lowered. The products are made present in the market for a short while to reduce competition then withdrawn. The fighting brand is entitled by the original brand to avoid minimizing the price of the initial product(stats.oecd.org, n.d.). The original brand prefers to establish the fighting brand as it is less expensive than lowering the price of the original brand. This strategy is commonly used in an area that has to differentiate products. The fighting strategy is mainly used to discourage new entrants into the market. The existing products introduces new products at lower prices. This strategy's disadvantage is cannibalism, a consumer who could have bought a product at a higher price switch to the low price product. Fighting brand strategy leads to less product differentiation, thus proliferation. This study attempts to explain to the fighting band the advantages of using this strategy and its implication
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The organization uses fighting brand strategy to increase their bargaining power with the suppliers and increase their shelf space, thus making the product better known in the market to reduce the number of new entrants by producing cheaper than those of the competitors. For some organizations, the fighting brand allows the company to try to produce new products while maintaining the old product's quality. Fighting brand grows due to the consumers' desire to consume new products due to lack of brand loyalty..
After the success of Virginia Blue’s airline launch, Qanta, a popular airline in Australia, established Jetstar as its fighting brand (Turner, 1960). The aim behind the establishment of Jebstar was to increase the market presence of Qantas and reducing the number of people who used Virginia Blue airlines. Jester used pricing strategies, such as market penetration and price reduction strategies. This resulted in the overall competitiveness of the company making the targeted branding a successful case for Qantas.
Targeting brand does not always work out positively for the business. An organization such a Wesfarm, an Australian company. The company deals with office supplies, manufacturing of fertilizers and Chemicals, clothes and hardware. Wesfarmers developed Kmart as its retail branch in 1969. The store's purpose was to help in price reduction, deterring competition, and keep Wesfarm better than her competitor. However, the fight between Wesfarm and Kmart as the two fights for the same marketing space. Kmart has a better position in the market due to its consistent price reduction. Kmart has also come up with better branding of their products.
The fighting brand produces excellent results when the purpose of the company is defined. The purpose range from capturing increasing the market share, testing a new product in the market, and changing the economic condition (Harvard Business Review, 2000). Lack of well-defined guidelines on the purpose of the fighting brand strategy makes the company incur more costs. The new products initiated by the company looks similar to the existing brand.
Differentiation is, therefore, crucial in tracking the customer reaction to the new product and the measures to be taken to improve the original product. Lack of differentiation of the product makes it hard for the company to identify the impact f the new product on the market. The company is in danger of losing its clients to the fighting brand if there is no exact differential between the products.
Other than the product, the values that the company stands for are some of the things that boost the sale of the products and services offered (Cambra-Fierro, Polo-Redondo, and Wilson, 2007). The brand is mainly driven by the staff due to the attitude and motivation to work towards the organization's specific goal. In launching the fighting brand, the company should ensure that the products are consistent with the organizational values. The company's mission, vision, and objective are implemented by the organizations that wish to be successful. This is to motivate the worker and other stakeholders with a complementary view of the product being produced, which goes a long way in determining its overall reaction market reaction.
Most organizations focus on dealing with the clients and forget to set a direction for their products. The organization should formulate the long term and the shorties while coming up with the flankers. Customer preferences should determine the direction of the product. The trends influenced by external market forces such as technology, politics, economic forces, and social factors influence the market. After the establishment of Virginia blue airline, Jester is introduced by Qantas. This strategy works well for the business in the long run leading to its success, which shows the importance of a well-defined goal.
The fighting brand brings about cannibalism for the existing product (Mason and Milne, 1994). Cannibalism happens when the new products introduced takes up the initial market share initially held by the company's original products. In the original product versus the flanks introduced, cannibalism is caused by a lack of proper product differentiation. The customer who is not brand loyal is mainly affected by cannibalism due to the flankers' reduced cost. Wesfarmers clients switched to Kmart, leading to a reduction of sales in Westfarrm, beating the firm's purpose.
The legal issue related to target branding is; wrongful presentation of information. The branding of the product should inform the client about the product. By producing goods and services that look similar to that of the existing product, the customer may confuse one product for the other, thus buying product s which they never intended to. How similar the brands are similar to those of the competitors is a legal concern. Competing firms should have distinctive features that enable their clients to differentiate the product quickly. Though competing, the rivals have no right to tarnish the other c company's name. The businesses should be protected from the unfair business competition; the company should set the price floor an