Part Five Product Decisions 13 Branding and Packaging.

Part FivePart FiveProduct Decisions

1313Branding and Packaging

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 2

Objectives

1. To explain the value of branding

2. To understand brand loyalty

3. To analyze the major components of brand equity

4. To recognize the types of brands and their benefits

5. To understand how to select and protect brands

6. To examine three types of branding policies


Objectives (cont’d)

7. To understand co-branding and brand licensing

8. To describe the major packaging functions and design considerations and how packaging is used in marketing strategies

9. To examine the functions of labeling and describe some legal issues pertaining to labeling


Chapter Outline

• Branding

• Packaging

• Labeling


Branding: Key Terms

• Brand– An identifying name, term, design, or symbol– One item, family of items, or all items of a seller

• Corvette, Chevrolet, General Motors

• Brand Name– The part of a brand that can be spoken– Words, letters, numbers

• Union 76, NBA, 49’ers

• Brand Mark– The part of a brand not made up of words– Symbols or designs

• Nike swoosh, Mercedes star, McDonald’s arches


Branding: Key Terms (cont’d)

• Trademark– A legal designation of exclusive use of a

brand• Coca-Cola®, Hewlett-Packard®

• Trade Name– Full legal name of

an organization• American Telephone

and Telegraph Corporation (AT&T)


Value of Branding

• For Consumers– Helps speed consumer purchases by

identifying specific preferred products– Provides a form of self-expression and

status– Evaluates product quality to reduce the

risk of purchase


Value of Branding (cont’d)

• For Marketers– Identifies and differentiates a firm’s

products from competing products– Helps in the introduction of new products– Facilitates the promotion of all same-brand

products– Fosters the development of brand loyalty– Can create valuable intangible assets


Brand Loyalty: Key Terms

• Brand Loyalty– A customer’s favorable attitude toward a

specific brand

• Brand Recognition– A customer’s awareness that a brand

exists and is an alternative purchase


Brand Loyalty: Key Terms (cont’d)

• Brand Preference– The degree of brand loyalty in which a

customer prefers one brand over competitive offerings

• Brand Insistence– The degree of brand loyalty in which a

customer strongly prefers a specific brand and will accept no substitute


Major Elements of Brand Equity

FIGURE 13.1

Source: Adapted with the permission of The Free Press, a division of Simon & Schuster Adult Publishing Group, from Managing Brand Equity: Capitalizing on the Value of a Brand Name by David A. Aaker. Copyright © 1991 by David A. Aaker.


Types of Brands

• Manufacturer Brands– Brands initiated by producers

• Private Distributor Brands– Brands initiated and owned by resellers

• Dealer brands, private brands, store brands

• Generic Brands– Brands indicating only

the product category


Consumers’ Perceptions of Store and Manufacturers’ Brands for Selected Product Groups

FIGURE 13.2Source: “Store Brands at the Turning Point,” Consumer Research Network, 3624 Market Street, Philadelphia, PA.


Selecting a Brand Name

• The name should– be easy to say, spell, and recall.– indicate the product’s major benefits.– suggest the product’s major uses and special

characteristics.– be distinctive, setting it apart

from competing brands.– be compatible with all products

in line.– be designed for use and recognition

in all types of media.


Protecting a Brand

• Degree of brand protection through registration

–Fanciful

–Arbitrary

–Suggestive

–Descriptive

–Generic

• Surnames and descriptive, geographic, or functional names are also difficult to protect.

• Registration with the U.S. Patent and Trademark Office protects a brand for ten years with indefinite renewals.

MostMost

LeastLeast


Branding Policies

• Individual Branding– A policy of naming each product differently– Avoids stigmatizing all products due to a

failed product

• Family Branding– Branding all of a firm’s products with the

same name– Promotion of one item also promotes all

other products


Branding Policies (cont’d)

• Brand-Extension Branding– Using an existing brand name for an

improved or new product– Provides support for new products through

established brand name and image


Co-Branding

• Using two or more brands on one product to capitalize on the brand equity (customer confidence and trust) of multiple brands

• Brands involved must represent a complementary fit in the minds of consumers.

• Helps differentiate a firm’s product from those of its competitors

• Helps take advantage of distribution capabilities of co-branding partners


Brand Licensing

• An agreement whereby a company permits another organization to use its brand on other products for a licensing fee

• Advantages– Low-cost and/or free publicity– Revenues from royalty fees

• Disadvantages– Lack of manufacturing control– Creating too many unrelated products– Licensing arrangements can fail


Packaging

• Involves the development of a container and a graphic design for a product

• Packaging Functions– Protect the product from

damage– Offer convenience to

consumers– Prevent waste and make

storage easier– Promote the product by

communicating its features, uses, benefits, and image


Major Packaging Considerations

• Cost of Packaging– Limited consumer willingness to pay for better

packaging

• Tamper-Resistant Packaging– FDA regulations and consumer

safety concerns

• Family Packaging– Similar packaging for all of a

firm’s products or packaging that has one common design element

AA


Major Packaging Considerations (cont’d)

• Promotional Role (Informing the Consumer)– Verbal and nonverbal

symbols– Size, shape, texture, color,

and graphics

• Reseller Needs– Transportation, storage,

and handling

• Environmentally Responsible– Biodegradable and recyclable


Packaging and Marketing Strategy

• Altering the Package– To update style and to meet increased

competition– To highlight new features– To take advantage of new packaging materials– To make the product safer or easier to use– To reduce packaging costs

• Secondary-Use Packaging– Reusable packaging adds customer value

• Category-Consistent Packaging– Packaging reflects customer expectations for the

expected appearance of products in a category


Packaging and Marketing Strategy (cont’d)

• Innovative Packaging– Unique features or ways of packaging that make a

product more distinct from its competitors

• Multiple Packaging– Bundling multiple units of a product together to

encourage usage and to increase demand

• Handling-Improved Packaging– Packaging that has been changed

to facilitate product handling in the distribution channel


Criticisms of Packaging

• Lack of functionality– Leak, difficult to open/close/seal, hard-to-

use designs

• Safety– Sharp edges, broken glass, health hazards

• Deceptive– Shape, size, colors mask true nature of

product

• Cost of packaging– What customers prefer is costly


Labeling

• Labeling– Providing identifying, promotional, legal, or

other information on package labels

• Universal Product Code (UPC)– A series of electronically

readable lines identifying a product and containing inventory and pricing information


Labeling (cont’d)

• Purposes of Labels– Help identify the product

• Display brand name and unique graphics

– Support promotional efforts for the product• Coupons, discounts, product features

– Provide legally required labeling information• Fair Packaging and Labeling Act of 1966• Nutrition Labeling Act of 1990


Labeling (cont’d)

• Purposes of Labels (cont’d)– “Green Labeling” issues

• Labeling packaging as made of recyclable materials

– Provide information on product origin• “Made in the USA”

1st


After reviewing this chapter you should:

• Be able to explain the value of branding• Understand brand loyalty• Be able to analyze the major components of

brand equity• Recognize the types of brands and their

benefits• Understand how to select and protect brands• Know about three types of branding policies


After reviewing this chapter you should:

• Understand co-branding and brand licensing

• Be able to describe the major packaging functions and design considerations and how packaging is used in marketing strategies

• Understand the functions of labeling and its legal issues

Part Five Product Decisions 13 Branding and Packaging.

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Transcript of Part Five Product Decisions 13 Branding and Packaging.