ppt chapter 11

Principles of MarketingMKT3010

Chapter 11Product, Branding, and Packaging Decisions

Patricia Knowles, Ph.D.

Associate ProfessorClemson University 1

2Principles of MarketingMKT3010 2

Product, Branding, and Packaging DecisionsThese are the learning objectives guiding the chapter and will be explored in more detail in the following slides.

Describe the components of a product.Identify the types of consumer products.Explain the difference between a product mix’s breath and a product line’s depth,Identify the advantages that brands provide firms and consumers.Explain the various components of brand equity. Determine the various types of branding strategies used by firms.Distinguish between brand extension and line extension. Indicate the advantages of a product’s packaging and labeling strategy.

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Types of ProductsConsumer products are products and services used by people for their personal use. Marketers further classify these products by the way they are used and purchased.


Specialty Shopping

Convenience Unsought

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Check Yourself


1. Explain the three components of a product.

2. What are the four types of consumer products?

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Product Mix and Product Line Decisions


Each item is called a Stock Keeping Unit (SKU) and the category depth is the number of SKUs within a category.

Breadth

• Number of product lines

Depth

• Number of categories within a product line

Courtesy Pepsi Cola Company

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Check Yourself


1. What is the difference between product line breadth versus depth?

2. Why change product line breadth?

3. Why change product line depth?

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What Makes a Brand?


Identify a brand that you recognize primarily by each of these elements.

BrandingBrand name

URLs

www.eBay.com

Logos and symbols

Characters

Slogans

Jingles/Sounds“Law & Order”

McG

raw

-Hill

Co

mpa

nies

, Inc

.

©M. Hruby.

http://www.ebay.com/

http://www.youtube.com/watch?v=-8lDYrvTILc

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Value of Branding for the Customer


Facilitate Purchasing

Establish Loyalty

Protect from Competition

Reduce Marketing Costs

Are Assets

Impact Market Value

99Principles of MarketingMKT3010

Brand Equity: Brand AwarenessBrand equity cuts both ways; customers dislike some brands because of the firm’s actions or their negative perceptions. Nike has been the target of many labor activists, which causes some consumers to refuse to purchase or wear Nike products. Remember what you have learned about consumer behavior. When consumers recognize a need, they begin with an internal search, during which they consider any brand they already know. If consumers are not aware of the brand, they simply will not purchase it.

Source: http://www.interbrand.com/best_global_brands.aspx

http://www.interbrand.com/best_global_brands.aspx


Brand Equity: Perceived ValueThese retailers offer designer products at reduced prices. In some cases, they use well known designers for their lines of clothing.

• How do discount retailers like Target, T.J. Maxx, and H&M create value for customers?

Photo by Peter Kramer/Getty Images

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Brand Equity: Brand Associations


In this billboard ad Kristen Davis, Charlotte from “Sex in the City”, offers her classical good looks to reflect the brand personality of Weatherproof outerwear. Firms sometimes develop a personality for the brand – as if it were human.

©McGraw-Hill Companies Inc/Gary He, photographer

What brands have personalities – they might mention McDonald’s and Pepsi (young).

Consumers develop links between brands and their own identity. Some brands are just “not for them.”

Did you ever proudly wear Abercrombie & Fitch clothing?

How many choose never to wear this brand?

How do you perceive this brand’s message?

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Brand Equity: Brand Loyalty


Brand loyalty provides the firm with high value. State Farm has built their brand equity by having loyal customers. Once you have chosen an insurance company or a bank, how likely is it that you will switch? How likely is it that you will switch due to an increase in price? Is it important for the firm to spend a lot of money marketing to you, a loyal customer? Do you pay much attention to ads or direct mail pieces from competition? To further illustrate brand loyalty, think - would you leave a store if your particular brand were not in stock? When you order a Sprite in a restaurant and the server asks, “Is 7-Up okay?” do you say no?

• Consumers are often less sensitive to price• Marketing costs are much lower• Firm insulated from the competition

Copyright State Farm Mutual Automobile Insurance Company 2005 Used by permission


Check Yourself

1. How do brands create value for the customer and the firm?

2. What are the components of brand equity?

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Brand Ownership


Unlike Europe, where store brands such as Tesco (U.K. grocery chain) were extremely popular, in the United States, few store brands had achieved such status and were often considered inferior to manufacturer or national brands. Today, many store brands are well established, such as Kenmore, Charter Club, and Presidents’ Choice.

Manufacturer brands or national brands

Private-label brands or Store Brands• Premium• Generic• Copycat• Exclusive co-branded

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Naming Brands and Product Lines


• Corporate or family brand– The Gap

• Corporate and product line brands– Kellogg’s Corn Flakes

• Individual lines– Mr. Clean (Proctor & Gamble)

©M. Hruby.

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Brand Extension


What are the advantages of a brand extension? The firm can spend less on brand awareness. That the positive consumer acceptance will spread to the new product and a synergy exists between the two products. In the picture above one might use the crest toothpaste and floss together. This web link is to the State Farm Website. You can see from the Website that State Farm has extended their brand past insurance to include mutual funds and banking products.

©M Hruby

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Brand Dilution


A brand is only as good as its last extension. Many firms try to take their brands just one more step, only to find the extension hurts rather than helps the parent brand. For example, McDonald’s agreed to license a McKids line of clothing, but the line was not as successful as it had hoped it would be. In terms of this slide, what do you think McDonald’s did wrong? They should comment that this was not a great fit. That the perceptions might not have been of the highest quality.

Evaluate the fit betweenthe product classof the core brand

and the extension.

Evaluate consumer perceptions of the

attributes of the core brand and seek out extensions

with similar attributes.

Refrain from extending the brand name to too many

products.

Is the brand extension distanced

enough from the core brand?

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Co-Branding


Co-branding benefits the participating brands by attracting the consumers of one brand to the others. Remind students of the FedEx/Kinko’s example. The synergy between these two brands helped ensure a successful co-branding effort.

©M Hruby

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Brand Licensing


The NBA licenses products like these bobblehead figures of Dallas Mavericks and San Antonio Spurs players to a manufacturer in exchange for a negotiated fee.

Photo by D. larke Evans/NBAE via Getty Images.

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Brand Repositioning


The product is now positioned as a detergent and an air freshener.

Courtesy The Procter & Gamble Company

• How is this repositioning?

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Check Yourself


1. What are the differences among manufacturer and private-label brands?

2. What is co-branding?

3. What is the difference between brand extension and line extension?

4. What is brand repositioning?

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Packaging


Although often overlooked as a marketing tool, packaging helps determine the success of a product. The chapter covers many new packaging innovations including FlexCan, Daily Gloss, smart lids, Labatt blue, aseptic drink bottles, and snack and seal as seen in the ad above. In some instances, such as Coca-Cola or Aunt Jemima Maple Syrup, the package has become synonymous with the brand. What packages are so distinct that it helps make the brand successful? Possible answers are: Perrier, Altoids, and Tiffany’s turquoise box. See if you can bring in examples of other bottled water in unusual bottles such as Fuji and Fred.

• What other packaging do you as a consumer find useful?

©M. Hruby.

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Product Labeling


Label information is determined by regulations, and labeling rules vary from country to country. Certain terms convey specific meanings, such as “natural,” “organic,” “made in the USA,” and products must meet specific tests before placing such terms on their label. Look at the label of a snack or drink you may have brought to class. What information does it provide? How does it support the marketing of this item?

©The McGraw-Hill Companies, Inc/Elite Images

C Sherburne/PhotoLink/Getty Images

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Glossary


Brand association reflects the mental links that consumers make between a brand and its key product attributes, such as a logo, slogan, or famous personality.

Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold.

Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

Brand extension refers to the use of the same brand name for new products being introduced to the same or new markets.

Brand licensing is a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee.

Brand loyalty occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buy from multiple suppliers within the same category.

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Glossary


Brand repositioning or rebranding refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences.

Co-branding is the practice of marketing two or more brands together, on the same package or promotion.

Perceived value of a brand is the relationship between a product or service’s benefits and its cost.

Product assortment or product mix is the complete set of all products offered by a firm.

Product lines are groups of associated items, such as items that consumers use together or think of as part of a group of similar products.

Product mix or product assortment is the complete set of all products offered by a firm.

ppt chapter 11

Marketing

brand extension

particular brand

price marketing costs

change product line

lot of money marketing

change product line

products packaging

store brands