Chapter 13 Branding And Packaging

13 | 3Copyright © Houghton Mifflin Company. All rights reserved. Objectives Explain value of branding Understand brand loyalty Analyze components of brand equity Recognize types of brands and benefits Understand how to select and protect brand Examine branding policies Understand co-branding/brand licensing Describe packaging functions/design considerations and how packaging is used Examine functions of labeling and describe legal issues pertaining to labeling

13 | 4Copyright © Houghton Mifflin Company. All rights reserved. Branding Brand – a name, term, design, symbol, or other feature that identifies a seller’s products and differentiates them from competitors’ products. Brand name – part spoken, including letters, words, and numbers Brand mark – part not made up of words, such as a symbol or design Trademark – legal designation of exclusive use of a brand Trade name – full legal name of organization

13 | 5Copyright © Houghton Mifflin Company. All rights reserved. Value of Branding – Buyer Identify specific products Form of self-expression Evaluate product Reduce perceived risk of purchase Status

13 | 6Copyright © Houghton Mifflin Company. All rights reserved. Value Of Branding – Seller Identify product Aids in new product introduction Facilitates promotion Fosters brand loyalty Cultural branding

13 | 7Copyright © Houghton Mifflin Company. All rights reserved. Brand Loyalty A customer’s favorable attitude toward a specific brand.

13 | 8Copyright © Houghton Mifflin Company. All rights reserved. Brand Loyalty (cont’d) Recognition – aware brand exists and is alternative if preferred brand unavailable Preference – preferred over competitive offerings Insistence – strongly preferred, no substitute

13 | 9Copyright © Houghton Mifflin Company. All rights reserved. Brand Equity The marketing and financial value associated with a brand’s strength in a market.

13 | 10Copyright © Houghton Mifflin Company. All rights reserved. Major Elements Of Brand Equity 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. All rights reserved.

13 | 11Copyright © Houghton Mifflin Company. All rights reserved. Types Of Brands Manufacturer- initiated by its producer Private distributor- initiated and owned by a reseller Generic- indicating only a product category

13 | 12Copyright © Houghton Mifflin Company. All rights reserved. The World’s Most Valuable Brands From “The Top 100 Global Brands Scoreboard,” Business Week, (accessed May 1, 2006). Reprinted by permission of Business Week. The brand valuations draw on publicly available information, which has not been independently investigated by Interbrand. Data: Interbrand Corp., J. P. Morgan Chase & Co., Citigroup, Morgan Stanley, Business Week.

13 | 13Copyright © Houghton Mifflin Company. All rights reserved. Consumer Perceptions Of Brands “Store Brands at the Turning Point,” Consumer Research Network, 3624 Market Street, Philadelphia, PA.

13 | 14Copyright © Houghton Mifflin Company. All rights reserved. Selecting A Brand Name Easy to say, spell, recall Indicate major benefits- suggest in positive way products’ uses and special characteristics Recognizable in all types of media

13 | 15Copyright © Houghton Mifflin Company. All rights reserved. Sources For Brand Names Individual Committee Department Consultant

13 | 16Copyright © Houghton Mifflin Company. All rights reserved. Protecting A Brand Brand types –Fanciful = most protected –Arbitrary –Suggestive –Descriptive –Generic = least protected 10 year protection but renewed indefinitely USPTO ®USPTO ®

13 | 17Copyright © Houghton Mifflin Company. All rights reserved. Branding Policies Individual- each product given a different name Family- all of a firm’s products with the same name or part of the name Extension- organization uses one of its existing brands to brand a new product in a different category

13 | 18Copyright © Houghton Mifflin Company. All rights reserved. Co-Branding Using two or more brands on one product. Co-BrandingSample Agreement NASDAQ And Street.com Announcement

13 | 19Copyright © Houghton Mifflin Company. All rights reserved. Brand Licensing An agreement whereby a company permits another organization to use its brand on other products for a licensing fee. HP’s Brand Licensing Program

13 | 20Copyright © Houghton Mifflin Company. All rights reserved. Packaging Functions 1.Protect product and maintain functional form 2.Offer convenience 3.Promote product 4.Communicate quality or premium nature of product

13 | 21Copyright © Houghton Mifflin Company. All rights reserved. Packaging Considerations Cost Tamper-resistant Design consistency Promotional role- color Needs of resellers Environmentally responsible RFID

13 | 22Copyright © Houghton Mifflin Company. All rights reserved. Companies That Spend The Most On Packaging

13 | 23Copyright © Houghton Mifflin Company. All rights reserved. Packaging And Marketing Strategies Altering Secondary-Use Category-Consistent Innovative Multiple Packs Handling -Improved

13 | 24Copyright © Houghton Mifflin Company. All rights reserved. Criticisms Of Packaging Not functional Safety Deceptive Cost Types Of Packaging

13 | 25Copyright © Houghton Mifflin Company. All rights reserved. Labeling Labeling- identifying, promotional, or other information on package Universal Product Code (UPC)- electronically readable lines identifying product and inventory/pricing information Universal Product Code and EAN Article Numbering Code Page

13 | 26Copyright © Houghton Mifflin Company. All rights reserved. Labeling Laws Fair Packaging and Labeling Act (1966) Nutrition Labeling Act (1990) Nutrition Labeling Analysis

13 | 27Copyright © Houghton Mifflin Company. All rights reserved. Perceived Quality And Value Of Products Based On Country Of Origin “American Demographics 2006 Consumer Perception Survey,” Advertising Age, Jan. 2, 2006, p. 9. Data by Synovate.