PRODUCT, BRANDING, AND PACKAGING DECISIONS 11 PRODUCT, BRANDING, AND PACKAGING DECISIONS

Product, Branding, and Packaging Decisions 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. LO1 LO2 LO3 LO4 LO5 LO6 LO7 LO8

Types of Products Specialty Shopping Convenience Unsought

CHECK YOURSELF Explain the three components of a product. What are the four types of consumer products?

Product Mix and Product Line Decisions Abbreviated List of BMW Product Mix Product Lines BMW MINI Rolls-Royce Motorrad 2 Series 3 Series 4 Series 5 Series 6 Series 7 Series X Series Z4 Series M Series BMW i Hybrid Clubman Convertible Countryman Coupe Hardtop John Cooper Works Paceman Roadster Ghost Phantom Wraith C Series F Series G Series K Series R Series S Series Source: Kellogg’s 2010 annual report, http://annualreport2010.kelloggcompany.com/innovation.htm.

Product Mix and Product Line Decisions Breadth Number of product lines Depth Number of categories within a product line Courtesy Pepsi Cola Company

CHECK YOURSELF What is the difference between product line breadth versus depth? Why change product line breadth? Why change product line depth?

McGraw-Hill Companies, Inc. What Makes a Brand? McGraw-Hill Companies, Inc. Logos and symbols Characters URLs www.eBay.com Slogans ©M. Hruby. Branding Brand name Jingles/Sounds “Law & Order”

Value of Branding for the Customer Facilitate Purchasing Establish Loyalty Protect from Competition Are Assets Impact Market Value Apple wins in the Apple vs Samsung patent lawsuit

Brand Equity: Brand Awareness Source: Interbrand’s Best Global Brands 2013 report is a look at financial performance of the brand, role of brand in the purchase decision process, and the brand strength. Go to http://www.bestglobalbrands.com for more information. Reprinted with permission.

Brand Equity: Perceived Value How do discount retailers like Target, T.J. Maxx, and H&M create value for customers? Photo by Peter Kramer/Getty Images

Brand Equity: Brand Associations Vince Talotta/Toronto Star/Getty Images

Brand Equity: Brand Loyalty 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 How do brands create value for the customer and the firm? What are the components of brand equity?

Manufacturer brands or national brands Brand Ownership Manufacturer brands or national brands Private-label brands or Store Brands Premium Generic Copycat Exclusive co-branded

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.

Brand Extension ©M Hruby State Farm

Brand Dilution Evaluate the fit between the product class of 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?

Zite Personalized Magazine Co-branding ©M Hruby Zite Personalized Magazine

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

Brand Repositioning How is this repositioning? Courtesy The Procter & Gamble Company

CHECK YOURSELF What are the differences among manufacturer and private-label brands? What is co-branding? What is the difference between brand extension and line extension? What is brand repositioning?

Packaging What other packaging do you as a consumer find useful? ©M. Hruby.

Product Labeling C Sherburne/PhotoLink/Getty Images ©The McGraw-Hill Companies, Inc/Elite Images

Glossary A 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.

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

Glossary 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.

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

Glossary 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.

Glossary 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.

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.

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

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

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

Glossary 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.

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