Product, Branding, and Packaging Conceptsstephanielarkin.com/marketing/Ch09.pdfIdentify two types of...

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Chapter 9:Product, Branding, and Packaging Concepts

Pride/FerrellFoundations of MarketingFourth Edition

Prepared by Milton PressleyUniversity of New Orleans


Objectives1. Understand the concept of a product and how

products are classified.2. Explain the concepts of product item, product line,

and product mix, and understand how they are connected.

3. Understand the product life cycle and its impact on marketing strategies.

4. Describe the product adoption process.5. Explain the value of branding and the major

components of brand equity.


Objectives6. Recognize the types of brands and how they are

selected and protected.7. Identify two types of branding policies, and explain

brand extensions, co-branding and brand licensing.8. Describe the major packaging functions and design

considerations and how packaging is used in marketing strategies.

9. Understand the functions o labeling and selected legal issues.


Product Decisions


What Is a Product?• A Product Defined

– A good, a service, or an idea received in an exchange

– Tangible or intangible or a combination• products vs services

– Functional, social, and psychological utilities or benefit


What Is a Product?

What is a Product?

A product can be a service, and idea, goods, or a combination of these. The Houston Museum of Natural Science provides a service.


Discussion Question• The Houston

Museum of Natural Science provides a service. Does it also provide products and/or ideas?


Consumer Products• Product purchased to satisfy personal and

family needs - Consumer product categories: Convenience products: inexpensive and frequently purchased

Shopping products: buyers willing to expend considerable effort in planning and making the purchase

Specialty products: possess one or more unique characteristics and buyers are willing to expend considerable effort to obtain them

Unsought products: purchased when a sudden problem must be solved, customers are unaware of them and do not usually think of purchasing them


Classifying Products

Convenience Product and Shopping Product

An ice cream bar is a convenience product. Hotels are shopping products.


Discussion Question• Click on the Television below, watch the

commercial, and then discuss whether dining at Ruth’s Chris Steakhouse is a convenience, shopping, specialty, or unsought product.

http://www.youtube.com/watch?v=uaVY8NA6KJo











Business Products• Products bought to use in an organization’s

operations, to resell, or to make other products – Installations - facilities & non-portable equipment– Accessory equipment - not part of final product– Raw materials - natural materials part of product– Component parts - finished items ready for assembly or

need little processing– Process materials -used in production but not identifiable– MRO supplies -maintenance, repair, and

operating items not part of final product– Services - intangible products in operations


Classifying Products

Business Product

New Holland equipment is a business product designed for use by business customers.


Product Line and Product Mix• Product item - a specific version of a product that can be designated as a

distinct offering among a firm’s products• Product line - a group of closely related product items viewed as a unit

because of marketing, technical or end-use considerations• Product mix - the total group of products that an organization makes available

to customers• Width of product mix - the number of product lines a company has• Depth of product mix - the average number of different product items offered in each

product line


The Concepts of Product Mix,


Product Line

Product Line and Product Mix

This Hilton ad shows a number of Burberry’s product lines.


Discussion Question

Which of these ads shows the company’s product mix? Which shows a product line?


Product Life Cycle: Introduction• The initial stage of a product’s life cycle—its first

appearance in the marketplace—when sales start at zero and profits are negative

• Risk of failure high• Buyers must be made aware of:

– Features– Uses– Advantages

• Sellers lack– Resources– Technological knowledge– Marketing know-how


Product Life Cycle: Growth• The stage of a product’s life cycle when sales

rise rapidly and profits reach a peak and then start to decline– More competitors enter the market– Product pricing is aggressive– Brand loyalty becomes important– Gaps in market coverage are filled– Promotion expenditures moderate– Production efficiencies lower costs


Product Life Cycle: Maturity• The stage of a product’s life cycle

when the sales curve peaks and starts to decline and profits continue to fall– Intense competition– Emphasis on improvements and differences in competitors’

products– Weaker competitors lose interest and exit the market– Advertising and dealer-oriented promotions predominate– Distribution sometimes expands to the global market

• Strategic objectives for maturity stage– Generate cash flow– Maintain market share– Increase share of customer


Product Life Cycle: Decline• The stage of a product’s life cycle when sales

fall rapidly– Pruning items from the product line– Cutting promotion expenditures– Eliminating marginal distributors– Planning to phase out the product


Product Life Cycle

Product Life CycleNotebook computers are in the maturity stage of the product life cycle.


Most New Products Have Their Skeptics


Product Adoption Process• The five stages of the product adoption

process:1. Awareness: buyer becomes aware of the product2. Interest: the buyer seeks information and is

receptive to learning about the product3. Evaluation: the buyer considers the product’s

benefits and decides whether to try it4. Trial: the buyer examines, tests, or tries the product

to determine if it meets his or her needs5. Adoption: the buyer purchases the product and can

be expected to use it again whenever the need for this general type of product arises


Adopter Categories• Innovators - first adopters of new products• Early adopters - careful choosers of new products• Early majority - those adopting new products just before the average person• Late majority - skeptics who adopt new products when they feel it is necessary• Laggards - the last adopters who distrust new products

Consumers fall into one of five major categories:


Distribution of Product Adopter


Branding• Brand–A name, term, design, symbol,

or other feature that identifies a seller’s products and differentiates them from competitors’ products.– Corvette, Chevrolet, General Motors

• Brand Name–The part of a brand that can be spoken, including letters, words, and numbers– Union 76, NBA, 49’ers

• Brand Mark–Part not made up of words, such as a symbol or design– Nike swoosh, Mercedes star,

McDonald’s arches• Trademark–legal designation of

exclusive use of a brand• Trade name–full legal name of

organizationBrand Mark The red and white target is the brand mark for Target stores.


The Value of Branding• To Buyers

– 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• To Sellers

– 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


Brand Loyalty

• A customer’s favorable attitude toward a specific brand.– Recognition: aware brand exists and is

alternative if preferred brand unavailable– Preference: preferred over competitive

offerings– Insistence: strongly preferred, no

substitute


Brand Equity


Branding

Stimulating Brand Association Geiko uses the gecko as its trade character to stimulate

favorable brand associations.


Top Ten Most Valuable Brands in


Most Valuable Non-Profit Brands

OrganizationBrand Value $

Million

YMCA of the USA 6,394

Salvation Army 4,703United Way of America 4,517American Red Cross 3.146Goodwill Industries International 2,535Catholic Charities USA 2.361Habitat for Humanity International 1,768American Cancer Society 1,360The Arc of the United States 1,224Boys & Girls Clubs of America 1,168

Source: http://www.coneinc.com/stuff/contentmgr/files/0/b2b4cb81b5be7de19ddfd5bb1c5e9711/files/cone_top_100_chart.pdf (Accessed 9/14/2009)

http://www.coneinc.com/stuff/contentmgr/files/0/b2b4cb81b5be7de19ddfd5bb1c5e9711/files/cone_top_100_chart.pdf

http://www.coneinc.com/stuff/contentmgr/files/0/b2b4cb81b5be7de19ddfd5bb1c5e9711/files/cone_top_100_chart.pdf


Types of Brands• Manufacturer

– Brands initiated by producers– Green Giant, IBM, Levis

• Private Distributor– Brands initiated and owned by

resellers– Sears’ Kenmore

• Generic– Do not include the company name or

other identifying terms– Aspirin


Protecting a Brand• Brands should be designed to that it can be

protected easily through registration

Protecting a Brand: Companies try to protect their brands by using certain phrases and symbols in their advertisements. Note the term “brand” after Ziploc, and the use of the ® symbol


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.


What would you name a chocolate


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.

Most

Least


Branding Policies, Extensions • Branding Policies

- Individual branding: a policy of naming each product differently

- Family branding: branding all of a firm’s products with the same name

• Brand Extensions - using an existing brand to brand a new product• Co-Branding - using two or more brands on one product

Co-BrandingLunchables is a co-branded item consisting of

Oscar Mayer and Kraft products.


Brand Licensing

• Brand licensing - an agreement whereby a company permits

another organization to use its brand on other products for a licensing fee


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,

Convenience Packaging

Some companies compete by

designing packages that are

convenient to use.


Packaging and Marketing Strategy

• Altering the Package• Secondary-Use Packaging• Category-Consistent Packaging• Innovative Packaging• Multiple Packaging• Handling-Improved Packaging


Major Packaging Considerations• Cost• Tamper-resistant• Design consistency

– Family Packaging• Promotional Role

– Verbal and nonverbal symbols– Size, shape, texture, color, and graphics

• Reseller Needs• Environmentally responsible• RFID


Criticisms of Packaging• Not functional• Safety issues• Deceptive• Excessive cost


Labeling

• Providing identifying, promotional, or other information on package labels


Labeling• Providing identifying, promotional, legal,

or other information on package labels– Help identify the product– Support promotional efforts for the

product– Provide legally required labeling

information– Provide information on

product origin


Perceived Quality and Value of


After Reviewing This Chapter You Should:

1. Understand the concept of a product and how products are classified.

2. Be able to explain the concepts of product item, product line, and product mix, and understand how they are connected.

3. Understand the product life cycle and its impact on marketing strategies.

4. Know how to describe the product adoption process.5. Be able to explain the value of branding and the

major components of brand equity.


After Reviewing This Chapter You Should:

6. Recognize the types of brands and how they are selected and protected.

7. Be able to identify two types of branding policies, and to explain brand extensions, co-branding, and brand licensing.

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

9. Understand the functions o labeling and selected legal issues.


Key Concepts• Good• Service• Idea• Consumer products• Business products• Convenience products• Shopping products• Specialty products• Unsought products• Installations• Accessory equipment• Raw materials• Component parts• Process materials• MRO supplies

• Product item• Product line• Product mix• Width of product mix• Depth of product mix• Product life cycle• Introduction stage• Growth stage• Maturity stage• Decline stage• Product adoption process• Innovators• Early adopters• Early majority• Late majority• Laggards


Key Concepts (cont’d)• Brand• Brand name• Brand mark• Trademark• Trade name• Brand equity• Brand loyalty• Brand recognition• Brand preference• Brand insistence

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