Soft drinks, such as Pepsi and Coca-Cola, are examples of well-known national brands.
A national brand is a brand-name product that's circulated throughout the country. Examples of national brand food products include Hershey's, Butternut, Kraft and Oscar Mayer. Manufacturing, distribution and the type of branding a product has plays a key role in pricing and its success.
Definition
A national brand is a type of product brand that is nationally distributed and marketed. More often than not, national brands are owned and advertised by a manufacturer. A national brand differs from a local or regional brand.
National Brand Popularity
Because they are typically considered to be of better quality, national brands can often demand higher prices versus regional or "off" brands from consumers. For example: Jiffy peanut butter, a national brand food product, can demand a higher price than Kroger brand peanut butter, which is a regional brand, because consumers are familiar with it. Consumers associate Jiffy with being a quality product because of its advertisement.
Marketing National Brands
Products are marketed under an assortment of brand names or private labels. Each of these labels is distinctive to each retailer. Marketing national brands, such as Crest toothpaste and Whirlpool appliances, calls for extensive advertising, which assists the manufacturer in competing with private label brands that cost less and are sometimes of a lower quality. When the national brand item is popular among consumers and in high demand, product pricing can maintain the costs of advertising and sustain an ideal profit margin.
Pricing Behavior
The pricing behavior of national brands versus their competitors is affected by several factors. Author William P. Putsis Jr. of the Yale School of Management, applies the theories of supply and demand to the pricing behavior of national brands, determining that national brand pricing is determined more by market saturation than local market conditions.
According to Putsis, "First, an increase in the effectiveness of a brand proliferation strategy depends upon the distribution of market share. The more concentrated the brand structure, the lower the market price of national brands...Finally, local market conditions play only a small role ... ."
Misconceptions
The term "major brand" is often directly linked to national brand. However, a major brand can also refer to an international brand, such as Chiquita. Major brands, such as Tommy Hilfiger clothing, Minute Maid, Maxwell House and Betty Crocker, are distributors or producers that are highly successful, popular among consumers and dominate a specific market. A national brand can also be a major brand, though a major brand, such as Kroger food products, might not be a national brand.
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