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METHODOLOGICAL APPROACHES AND PRINCIPLES OF LOCAL
BRAND FORMATION
Zinora Boltaeva
Researcher at Tashkent state university of economics,
Tashkent, Republic of Uzbekistan
E-mail:
Abstract.
In this paper was investigated methodological approaches and principles of local brand
formation.
Keywords:
brand, marketing, brain, goods and services, market, consumer.
Introduction
In order to accelerate the transition to a digital economy in Uzbekistan, to form a competitive
economy, to accelerate reforms to bring our products to world markets and to bring them to a new
modern level, the year 2020 will be called the Year of Science, Enlightenment and Digital Economy.
Literature review
In the countries of the Commonwealth of Independent States in this regard Bagiev G.L.[1],
Tarsevich VM, Bulanov A., Veselova A.O.[2], Godin AM, Golubkov EP, Grechin E.Yu.[3], Makashyov M.O.
[4], Pravda P. [5], Rozhkov I.Ya., Kismerishkin V.G. such as scientists who have conducted scientific
research. Although these studies cover brand theories, scientific and theoretical aspects of consumer
product branding and branding strategies, the issue of developing marketing strategies for milk and
dairy product branding has not been explored.
One of the economists of the republic S.S. Gulyamov[6], A.Sh. Bekmurodov[7], M.R. Boltaboev,
M.A. Ikramov[8], A.A. Fattakhov[9], Sh.J.Ergashxodjaeva [11], M.S. Qosimova, A.N. Samadov,
L.Abdukhalilova, B.Mamaev [12] and others made a great contribution to the development of
marketing. These authors have mainly enriched modern marketing theory with new data and managed
to solve a number of problems related to the scientific analysis of marketing research problems.
However, the issue of developing a marketing strategy for the formation of a local brand of food
products, especially milk and dairy products, has not been studied. These aspects are studied in this
dissertation research.
A brand is a strategic tool for the effective use of goods and services in a competitive
environment, tailored to the needs and desires of consumers. There are different approaches to the
economic term "brand" in the scientific literature. For example, Philip Kotler, "A good brand is a
consumer's propensity for it." described as. David Aaker said that "the existence of a brand is perceived
as a promise made to the consumer by the manufacturer." [13] he pointed out. The descriptions of the
brand given by the remaining authors are summarized in Table 1.
In the scientific literature, especially in the scientific literature of Uzbek scientists, the concept
of trade mark has been used more and more. In our opinion, such approaches do not fully reveal the
content and essence of the brand. A brand is
a brand created by a manufacturer or a manufacturer’s
brand. In many cases, it is advisable to use the intermediary or vendor brand (retailer brand, stare brand
or private label) only in the sales process as it is used in the sales process. However, in certain
circumstances, "brand", "trademark" or "reputation" should be used as a synonym only when the
content is appropriate.
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The term local brand is derived from the fact that there are different regions of the region,
especially the characteristics of production, storage and consumption of milk and dairy products, the
requirements of state standards for these products and their need to take into account their
characteristics when entering the world market.
Table 1
Systematization of definitions of the concept of "brand"
№
Authors
Brand definition
1.
American
Marketing
Association
A name, slogan, logo, project, or a combination thereof is used to distinguish a
product or service from a competitor
2.
Aaker D.
The existence of a brand is understood as a promise made to the consumer by the
manufacturer
3.
Braun P.
The sum of the mental relationships that are formed between customers and brand
owners represents the brand
4.
Bernet Dj.
A name, designation, design, or combination thereof used to distinguish goods and
services from other competitors
5.
Brand Aid is a
brand
consulting
company
A set of promises that are unique to the target consumer, difficult to repeat,
powerful, functional, emotional and defined represent the brand
6.
Vlasova E.
A brand is a system of features that distinguishes it from competitors' products,
consisting of interrelated, rational and irrational descriptions of the product, which
play an important role for the target audience.
7.
Bojuk S.G.
It is not only the ideological significance of the enterprise, but also the management
philosophy that forms the practical guide
8.
Kotler F.
A brand is a name, term, symbol, image, or a combination of them that identifies the
products of a single supplier or group of sellers and distinguishes them from
competitors' goods and services.
9.
Krylov I.
Perception of the brand in the individual consciousness to increase consumer choice
in the competitive range
10.
Ikramov M.A.
A brand is a criterion that reflects the level of recognition of an enterprise or
product (service)
11.
Ogilvi D.
The set of intangible features of the product: name, packaging, price, date, position,
advertising style
12.
Matantsev A.N. Individuality of the product, features of the enterprise or product that attract the
attention of customers, serve to create the image of the enterprise
13.
Pettis Ch.
A culturally-agreed emotional image of a product or enterprise;
14.
Pechorskiy A.
Quality assurance that facilitates consumer choice.
15.
F.le Pla and
L.Parker
- Competitive advantage and the main source of future income;
16.
Stas A.K.
- Promise the necessary consumer features;
17.
Rice L.
- Subjective perception of the value of the product or increased satisfaction.
18.
Xotamov I.S.
A brand that calls for a sustainable image of the majority of the target market
19.
The Chartered
Institute of
Marketing
It is the intersection of the company’s strengths and the sides that are valued by
customers
20.
Leslide
Sharnotoni
Represents the essence of operating on the basis of a brand-elegant trust system
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The legislation of the Republic of Uzbekistan does not use the terms "trademark" and "brand",
but uses the trademark for the legal protection of intellectual property. A trademark is understood to
be expressed in words, pictures, sizes, their mixtures, and other types. This mark is registered by legal
entities or individuals in the Intellectual Property Agency under the Ministry of Justice of the Republic
of Uzbekistan.
Analysis and results
In order for a brand or brand to become a brand, one can come to a conclusion based on the
definitions discussed above - when the team has a place in the consumer mind and differences from
competing goods at the expense of effective communications become value added. The difficulty of
drawing a line between a brand and a brand is demonstrated by the literature studied, the marketing
research conducted, and the analysis of practice. In some literatures, the minimum level of recognition
in the minds of the target audience is 20 percent, some 30 percent, others 50 percent. For a local brand,
in our opinion, such a level of recognition should be at least 70 percent. Studies show that for an
enterprise or product to be a brand, it must have been in the market for at least 5 years. For this reason,
the terms mentioned in Table 1.2 are systematized and divided into a number of groups depending on
the functions they perform.
Table 2
Brand related terms
Term
The task you are doing
Brand
Added benefit for the consumer (value)
Trademark
Differentiation from competitors' products
Trademark
Legal protection
Local brand
Value added to consumers living in a particular area
In other words, every brand can be accepted as a trademark, but not every brand can be a brand.
Legal registration of a trademark does not ensure its competitiveness.
Brands go through the same life cycle as a commodity: market entry, growth, maturity, decline
processes are observed. Of course, effective use and management of the brand, if organized, will ensure
their longevity and sustainability. For example, Lipton, Coca-
Cola, Levi’s and other brands can be cited
as sustainable brands.
According to a broader approach to the term brand, it is important for branding theories to clarify
the local brand concept. National brands represent the Republic of Uzbekistan in the international
market. So far, efforts have been made to see the company (entrepreneurs) or the brand of their
products on a domestic market scale. For this reason, the use of the term "local brand" is scientifically
and methodologically expedient. Of course, in the market of milk and dairy products, it becomes a
"national brand" only when it is as export-oriented as fruits and vegetables. These circumstances
require the creation of scientific, methodological, practical and theoretical aspects, methodological
bases for the formation of local brands in the market of milk and dairy products.
The results of the analysis of the economic literature are divided into several groups according to
the content and essence of the brand term:
1.
A brand term is defined as a group of features of a product to distinguish it from the goods or
services of competitors. Such an expression leads to a focus on the elements that make up the brand,
i.e. name, logo, history, packaging, etc. [Table 1,1,6,4,8,11,12,18].
2.
Consideration of the brand by consumers as a source of formation of a stable image. Such
expression expresses a more stable perception of the product in consumers, with more emphasis on
the psychological perception of the product [9,10,14].
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3. Directions as a consumer-oriented activity for its suppliers as a brand. Such expression focuses
on the relationship between the brand and the consumer, with particular emphasis on the mental
relationship between them [2,3,5,13,16,20].
4. Representation of the brand as a means of value creation. Such an expression draws attention
to the fact that each brand has a specific value in relation to the brand and the trademark [17].
Summarizing the approaches to the term brand mentioned above, the author's approach to the
definition of the concept of "brand" is proposed:
A brand is a combination of stable perceptions in the minds of consumers, which form a personal
approach to the product, guarantee high quality, non-refundable, competitive advantage, reflect
independence from the value of the product or service.
It is expedient to look at the local brand as a combination of stable perceptions that ensure the
recognition of the product in the minds of consumers in a specific regional market.
In the foreign economic literature, the brand is perceived as a strategic resource that ensures the
sustainable competitive advantage of the enterprise. A sustainable competitive advantage is "a set of
actions taken to achieve a long-term advantage using a specific strategy." The term sustainable
advantage in competition was first used in 1985 in Porter's work. [15]
Of course, during the formation of the digital economy, the appearance and content of a stable
advantage in competition is changing.
For example, M. Porter in his works pointed out that there are 5 threats to competitiveness in the
market segment:
In the five strengths of competition, a brand can perform a unique function and have a different
impact on an enterprise’s competitiveness. The main task of the brand is to be expressed in the attitude
to the impact of consumers. A strong brand allows the company to reduce the impact it has on
customers. The demand for branded goods is more stable than for non-
branded products (“Generics”)
and the price elasticity is lower. Consumer propensity leads to an increase in the amount of
repurchases. In practice, a 5% increase in consumer preference leads to a 100% increase in profits from
that buyer [34]. A premium price for a branded product allows you to make a higher profit. In other
words, the attractiveness of the brand clearly serves to bring in additional revenue.
Brands are second only to human assets in terms of substance and weight in terms of assets. In
the UK, Hong Kong and Australia, when they are accounted for in the balance sheet as intangible assets,
they enter the company’s reputation in the US (“Good will”) and serve to increase their market value.
Fig.1. P.S.X. Level of goods on Liflang [16]
Sum of physical properties
(brand attributes)
-dimensions
-configuration
-weight
-organoleptic indicators, etc.
A set of additional features to a
physical product:
-Size, capacity, usage qualities;
-content, structure
-quality
-design
-packing
-physical brand
-services and warranty
- Added emotional qualities
Physical qualities and
additional qualities that give
the product a special
prestige (image):
-practical value
- be user friendly
- The proposed longevity
-state
Physical brand
Extended brand
Cumulative product
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Fig.2. Level of goods according to F. Kotler [13]
The local brand also helps the manufacturer to enter other markets with new products. For
example, the Nestle brand in the Uzbek market has the opportunity to expand its position in the water,
confectionery and other food markets, in addition to the milk and dairy products market. The success
of this company can be determined by the confidence in it. This situation shows that it is possible to
achieve the transition from one market to another without spending too much on advertising and other
promotional activities.
Studies have shown that the role of the local brand in improving the efficiency of a product or
service is high. The more marketing approach is used, the easier it will be to promote the local brand.
In modern marketing, it is seen as a commodity as a means of satisfying human needs. The stronger the
local brand, the more opportunities their owners have over competitors. Especially as the number of
producers of milk and dairy products increases, it will be difficult for consumers to switch from well-
known brands to other products. The manufacturer wants the consumer to choose its product among
the competitors. In this regard, the division of goods into groups also plays an important role in
marketing. Commodity description groups are used by P.S.X.Liflang and F.Kotler (see Figures 1 and 2).
The cumulative product offered by P.S.X.Liflang or F.Kotler’s expanded product plays an
important role in positioning the product or determining its position in the market and facilitates
shopping in different markets. For this reason, marketing uses the t
erm “brand” to describe the need
for a variety of goods to meet consumer needs. The local brand, on the other hand, requires that the
characteristics of local markets (values, traditions, etc.) be taken into account. The brand also provides
an opportunity to influence the external factors of the competitiveness of the firm or entrepreneur. It
is possible to summarize this situation in Table 3.
The process of brand creation and management is called branding, which includes the creation,
strengthening, reassignment, brand development, expansion and deepening of the brand. For this
reason, the main emphasis in the study is on the concepts that represent the content of the brand
shown in Figure 3 for the formation and effective use of the local brand.
Thoughtful brand
The "basic benefit" is
that the consumer
tries to satisfy his
needs when buying
goods
Extended brand
High quality and
other features
compared to the
expected brand and
competitors
Expected brand
The minimum level of
goods expected by
the consumer
Goods
Basic appearance of
the product
Potential goods
An expanded brand
of the future
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Table 3
The role of the brand in providing a competitive advantage
№
Competitive forces
The impact of the brand on the position of the enterprise in the
network
1.
Consumers
Forms a tendency. Reduces dependence on customers
2.
Goods-news
Helps bring a new product to market based on a well-known brand
3.
Brands
It helps to save time when there is a risk in the market
4.
Suppliers
Allows you to control distribution outlets
5.
Intra-network competition
Prevents access to the network. Strengthens its market position
In the process of using brand strategies in Uzbekistan, although the concept of "brand" marketing
is present in the minds of consumers, there are no clear directions for its consideration as a key concept
of modern marketing. There is almost no understanding that the process of valuing the brand of goods
perceived by the consumer by enterprises, the process of shaping the value of consumers to brands will
provide maximum market opportunities. These circumstances, in turn, make it necessary to define
brand concepts in an interrelated way.
The main goal of the research is also to transform the local brand into a strong national brand.
On this basis, it is necessary to radically change the existing legal framework, standards, criteria and
norms of Uzbekistan.
Different methodological approaches to branding, ie the formation, use and promotion of the
brand, are presented in the literature, especially in the works of foreign scientists.
Branding is the specific ways in which the target segment of the market influences the attitude
towards the brand and the overall reputation.
A.M. According to Yanovsky, “Branding is the science and art of promoting a brand to enhance its
long-
term superiority”.
Fig.3. Brand structure
3.
Potential brand
2.
Extended
brand
1.
Main brand
Terms of sale
Delivery and
packaging
Service
Design
Quality
Product
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David Ogilvey, one of the leading scholars in the field of advertising, suggests using a combination
of intangible features of a product to define the concept of branding: its name, packaging, price, history,
reputation, and advertising methods.
Uzbek scientist I. "Branding is a modern technology of marketing, which includes the processes
associated with the creation of a new brand, branding, marketing, and inculcation in the minds of
consumers," says Khotamov.
In our opinion, branding is the activity of creating a long-term advantage for a product, the
process of creating a brand, packaging, advertising appeal to the consumer, the distinguishing
advantages of the product over competitors.
Currently, there are basically two models of branding, the first, English-American (western), and
the second, Japanese (Asian) models.
In the English-American brand model, the name of the manufacturer is left out, depending on the
specific product. This is because if a product is not accepted by consumers, the name or reputation of
the business should not be tarnished. However, such a strategy may prevent further improvement of
well-known brands by increasing the quantity of goods of the same brand. In this case, it will be
necessary to form a new brand for each new product. This leads to the fact that the main advantage of
the brand - that is, the easier introduction of new products based on a single well-known brand - does
not work. Second, such a style leads to an overabundance of brands, which, in its own way, leads to a
decline in the brand reputation of well-known companies.
According to the brand model of the West can be divided into groups based on the following
characteristics:
a) related brands - the name of the goods that represent the name of the manufacturing
company;
b) brands of individual product systems;
c) umbrella-shaped brand.
The main feature of the Western model is that the consumer is accustomed to his brand, after a
few years this new product can begin to benefit.
Japanese (Asian) model. In the 50s and 60s of the last century, when one of the main factors in
the development of the market was the choice of goods, price was, during this period, Japanese buyers
began to pay more attention to quality. At that time, companies with more resources, most of which
were large companies, provided quality through a certain amount of research, while quality was also
accepted as a sign of a large company. In Japan, in addition to free-standing brands, subbrands are
widely developed for a specific market segment.
The goals of introducing subbrands are different: to use the company's under-supplied
equipment, to meet new needs, to resist competitors, to occupy other target segments, to be more
visible in the sales system.
For example, the well-known companies Sony, Panasonic Sony Walkman (players), Sony Trinitron
(TVs) played the role of an umbrella for subbrands. In Japan, corporate image has always been valued
higher than a particular product.
In other words, while the western branding philosophy is characterized by diversification, the
Asian model is more characterized by a policy of centralization and unification. A unique branding
model is being formed in Uzbekistan. Due to lack of experience, the practice of imitating a foreign
company or brand of goods is widespread, as well as a branding philosophy consisting of direct transfer,
often a mixture of western and eastern models. In-depth analysis in this regard is discussed in later
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chapters of the dissertation. Branding in the conditions of Uzbekistan, the formation of a local brand
combines a number of features.
First of all, the main reason for the emergence of local brands in the production and sale of food
is the lack of skills and culture of local producers in industry, the inability to compete with foreign goods
and companies in other sectors. products, fruits and vegetables, processed foods.
The modern consumer market is mainly realized as a competition between brands and advertising
images, the main focus is on forming an image of their product in the minds of consumers. The use of
branding technologies and proposed methodologies requires the constant study of consumer desires
and tendencies based on marketing research.
Depending on the characteristics of the consumer market of Uzbekistan, the specificity of
branding is explained by:
-
due to the low culture of brand awareness of consumers in Uzbekistan, the creation of a new
brand and its application in the market does not require much time and financial resources. For
example, if in European countries the promotion of one brand requires 20-50 million dollars, in the
conditions of Uzbekistan it can be limited to 3-5 million dollars;
-
due to the rapid saturation of our domestic market, consumers do not have time to form a
tendency to one or another brand, as new products tend to be updated day by day;
-
consumer confidence in foreign products, especially in the food sector, is declining. For example,
we can list dozens of local producers of dairy products, although previously Nestle's products were
almost a monopoly;
-
in the domestic market has not yet fully eroded consumer confidence in the trademark of
manufacturers;
-
when creating a local brand in the domestic market, there is a need to conduct an advertising
campaign at a high price, and consumers have high confidence in advertising;
-
consumers' perception of the local brand is mainly perceived by three factors, which are formed
in their minds: the country of origin, the attractiveness of the packaging and the brand. Therefore, these
three factors that the product is offered should be taken into account in the formation of local brands;
- taking into account national values, traditions and other local features plays an important role
in advertising. Therefore, the need to personalize the brand is especially important for the Uzbek
market. Taking into account the specific historical and cultural characteristics of each region and
province are the main features that should be taken into account in the formation of a local brand.
In our opinion, it is worth noting that the branding process is one of the main parts of marketing
management, which allows you to develop a communication set of marketing based on their specific
principles.
By systematizing the principles of brand formation and development, it is expedient to group
them according to the four main positions, which consist of brand building, positioning, price formation,
development and management (Figure 4).
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Fig.4. Systematization of the principles of brand formation and development
The use of these principles of branding in the process of marketing management allows you to
increase the efficiency of business. Businesses that shape and promote branding can use different
methods and come to different results.
Fig.5. Brand wheel model
It is worth noting the contribution of the British company Bates Worldwide in the development
of branding methodology. Because the "Brand Wheel" developed by this company is widely used in the
branding practices of foreign countries. Among those who use this model are Kit-e-Kat, IBM, Whis Kas
and others who have established their own branding practices. It is recommended to use this "Brand
Wheel" as shown in Figure 1.5 and in the formation of a local brand in the territory of Uzbekistan.
Each circle has its own independence and is represented as a separate element of the brand.
Attributes represent the physical and functional aspects of a brand’s description and depend on the
consumer’s
perception of the product or service (color, design, taste, smell, assembly or modification
features).
The principle of creation
Leadership
Homogeneous
reception
Intensification
Positioning principle
Update location
Leadership
Internal reputation of
the enterprise
Consumer orientation
The principle of price
formation
Increase profits
Elasticity in price
reduction
Relativity of price
Expanding
opportunities for profit
Principle of
development and
management
Investment reliability
Relationships
Minimum advertising
costs
Additional opportunity
to move
Cost and benefit
coordination
The
essence of
branding
Individuality
Values
Benefits / advantages
Attributes
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The advantages in terms of nafli are said to be the result achieved after using the brand. The
advantage of a brand is a unique feature that serves to meet a specific need. Advantages are developed
based on brand attributes and preferences.
Satisfaction can take place at different levels: realized in a noticeable, imperceptible state of
imagination, on the basis of which we can see three different advantages of the brand:
- Significant advantages are formed using the physical attributes of the brand (color, design,
composition);
- imperceptible advantages are known only when using the product;
- Imagination is realized with the help of information that is formed in the mind on the basis of
human desires. The activities of manufacturers and their partners play an important role in this.
Brand values can be seen by consumers based on emotional outcomes when using a brand. In
creating the value of the brand, attention should be paid to the values of consumers, consumer
preferences, the factors that shape their propensity for the product.
Based on the above, Figure 6 offers a triad to describe the marketing essence of the brand.
Fig.6. Features of the brand that represent the essence of marketing
In other words, brand, brand and brand are very close concepts, but there are specific differences
between them. This should be taken into account when shaping the brand.
Conclusion
As a result of studying and analyzing the scientific literature, the author explored the concepts of
brand and local brand, trademark and trademark, as well as their content and essence, theories of
branding into a brand. As a result, the brand is a combination of stable perceptions in the minds of
consumers, which leads to scientific conclusions that the product reflects the individuality, high quality
assurance, irreversibility, competitive advantage, independence from the value of the product or
service.
Foreign scientists have given different definitions of branding, ie the formation, use and
promotion of the brand. Due to the lack of experience in the specific branding model in the context of
Uzbekistan, it is formed on the basis of approaches consisting of imitation of a foreign company or
brand of goods, direct transfer, a mixture of western and eastern models. These situations require the
Trademark
Brand capital
Manufacturer
Brand
Branding
Consumer
Brand-image
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use of branding technologies and modern methodologies to constantly study the purchasing desires
and tendencies of consumers on the basis of marketing research.
Depending on the characteristics of the consumer market of Uzbekistan, the lack of a culture of
branding does not require a lot of time and financial resources to create and implement a new brand,
rapid changes in the dynamics of consumer goods in the domestic market. cases of declining trust in
brands, lack of full consumer confidence in the brand in the domestic market, growing need to conduct
a large advertising campaign to create a local brand in the market, and high consumer confidence in
advertising were identified.
The results of systematization of brand formation and development principles became the basis
for understanding that branding principles for the market are related to the principles of four positions
(creation, positioning, price formation, development and management).
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