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Branding and Packaging

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1 Branding and Packaging
13 Branding and Packaging

2 Objectives To explain the value of branding
To understand brand loyalty To analyze the major components of brand equity To recognize the types of brands and their benefits To understand how to select and protect brands To examine three types of branding policies Copyright © Houghton Mifflin Company. All rights reserved.

3 Objectives (cont’d) To understand co-branding and brand licensing
To describe the major packaging functions and design considerations and how packaging is used in marketing strategies To examine the functions of labeling and describe some legal issues pertaining to labeling Copyright © Houghton Mifflin Company. All rights reserved.

4 Chapter Outline Branding Packaging Labeling
Copyright © Houghton Mifflin Company. All rights reserved.

5 Branding: Key Terms Brand Brand Name Brand Mark
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 Copyright © Houghton Mifflin Company. All rights reserved.

6 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) Copyright © Houghton Mifflin Company. All rights reserved.

7 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 Copyright © Houghton Mifflin Company. All rights reserved.

8 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 Copyright © Houghton Mifflin Company. All rights reserved.

9 Has the Silk Brand Name Helped This Brand Achieve an 80% Market Share?
Soy Milk Market Share (conventional grocery-store sales) White Wave’s Silk 80% General Mills’ 8th Continent 12% All others (including Eden Soy and Imagine Foods’ Soy Dream) 8% Source: General Mills; Information Resources; White Wave; as reported in Business 2.0, April 2004, p.74. Copyright © Houghton Mifflin Company. All rights reserved.

10 Brand Loyalty: Key Terms
A customer’s favorable attitude toward a specific brand Brand Recognition A customer’s awareness that a brand exists and is an alternative purchase Copyright © Houghton Mifflin Company. All rights reserved.

11 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 Copyright © Houghton Mifflin Company. All rights reserved.

12 Persons Who Try to Stick With Well-Known Brand Names
How has loyalty toward well-known brands changed over the last quarter of the twentieth century? Source: “Like Glue,” American Demographics, The Marketing Tools Directory, 2002, p. D46. Adapted with permission. Copyright © Houghton Mifflin Company. All rights reserved.

13 Major Elements of Brand Equity
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. FIGURE 13.1 Copyright © Houghton Mifflin Company. All rights reserved.

14 Source: “The Ones That Whiffed,” Buiness 2.0, April 2004, p. 83.
Putting Your Brand Name on a Stadium: What Are the Benefits and the Costs? Naming Company Field and Location Amount Paid (in millions) Filed for Bankruptcy New Name Adelphia Communications Adelphia Coliseum Nashville, TN $30 (over 15 years) 2002 The Coliseum ANC Rental National Car Rental Center Sunrise, FL $25 (over 10 years) 2001 Office Depot Center Enron Enron Field Houston, TX $100 (over 30 years) Minute Maid Park PSINet PSINet Stadium Baltimore, MD $105.5 (over 20 years) M&T Bank Stadium TWA Trans World Dome St. Louis, MO $26 Edward Jones Dome Source: “The Ones That Whiffed,” Buiness 2.0, April 2004, p. 83. Copyright © Houghton Mifflin Company. All rights reserved.

15 Copyright © Houghton Mifflin Company. All rights reserved.

16 Copyright © Houghton Mifflin Company. All rights reserved.

17 Can You Name the Brands Associated With These Trade Characters?
Charlie the Tuna- © Heinz North America.; Trump the Monster- Courtesy of Monster.com; Used with permission. Courtesy of PILLSBURY and the Pillsbury Company. TONY THE TIGER® and SNAP CRACKLE & POP® are registered trademarks of Kellogg Company. All rights reserved. © 2002 Kellogg Company. Copyright © Houghton Mifflin Company. All rights reserved.

18 Reprinted with permission of Morton Salt.
Why Is Morton Salt Using Its Trade Character on the Package and in This Ad? Reprinted with permission of Morton Salt. Copyright © Houghton Mifflin Company. All rights reserved.

19 Private Distributor Brands
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 Copyright © Houghton Mifflin Company. All rights reserved.

20 Consumers’ Perceptions of Store and Manufacturers’ Brands for Selected Product Groups
Source: “Store Brands at the Turning Point,” Consumer Research Network, 3624 Market Street, Philadelphia, PA. FIGURE 13.2 Copyright © Houghton Mifflin Company. All rights reserved.

21 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. Copyright © Houghton Mifflin Company. All rights reserved.

22 Class Exercise In developing a brand name, it is important to consider the requirements of an effective choice. For each of the following requirements, give several examples of brand names that satisfy that requirement. Easy to say, spell, and recall Communicates major product benefits Suggests product uses or special features Distinctive enough to set the product apart from competing brands The purpose of this exercise is to have students consider the importance of the major requirements of an effective brand name. Easy to say, spell, and recall: Tide detergent; Biz detergent; Zee paper towels; Tone soap; Jif peanut butter; Pert shampoo Communicates major product benefits: No-Yolks pasta; Clean & Clear (skin care products); Dustbuster (hand-held vacuum); Quick-Lash mascara; Reach toothbrush; Carpet-Fresh (rug and room deodorizer) Suggests product uses or special features: Glass Works (glass cleaner); Mop & Glo (floor cleaner); Soft Scrub (cleanser)  Distinctive enough to set it apart from competitors: Orville Redenbacher (popcorn); Reebok (athletic shoes); Häagen-Dazs (ice cream); Molly McButter (butter substitute); Yoplait (yogurt) Copyright © Houghton Mifflin Company. All rights reserved.

23 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 Copyright © Houghton Mifflin Company. All rights reserved.

24 Branding Policies Individual Branding Family 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 Copyright © Houghton Mifflin Company. All rights reserved.

25 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 Copyright © Houghton Mifflin Company. All rights reserved.

26 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 Copyright © Houghton Mifflin Company. All rights reserved.

27 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 Copyright © Houghton Mifflin Company. All rights reserved.

28 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 Copyright © Houghton Mifflin Company. All rights reserved.

29 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 A A Copyright © Houghton Mifflin Company. All rights reserved.

30 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 Copyright © Houghton Mifflin Company. All rights reserved.

31 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 Copyright © Houghton Mifflin Company. All rights reserved.

32 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 Copyright © Houghton Mifflin Company. All rights reserved.

33 Net Sights The Institute of Packaging Professionals is a resource for information about packaging and the packaging industry. The organization’s website ( includes discussions about packaging issues, news and press releases, contact information for packaging organizations around the world, and winners of Worldstar, an international award in packaging. Copyright © Houghton Mifflin Company. All rights reserved.

34 Class Exercise Look at the nearest snack food wrapper or soft drink container and identify the brand name. brand mark. trademark. trade name. Using the wrapper or container, explain how packaging performs three functions: protection, convenience, and communication. The purpose of this exercise is to reinforce an understanding of brand components and policies and the functions of packaging. Students often get these components mixed up, particularly the first two. Coke cans offer a good chance to explain the difference between the brand name Coca-Cola and the script design that makes up the brand mark. The students will usually note the trademark registration ®. The trade name—the official name of the company—is marked on the back of the can. The fact that “Coke” is referred to generically may also bring up the point that firms spend a great deal of resources to retain brand name rights. Replaceable caps (on 16-oz. drinks) help preserve taste; airtight containers and expiration dates help ensure freshness. Package sizes are generally produced in amounts that meet individual consumer needs (e.g., 2-oz. candy bars; 12-oz. drinks, five sticks of gum) for appropriate prices. A production orientation might only produce one size, for instance. Most students are so accustomed to the packages of these items that they rarely recognize the role of communication. Effective packaging rein-forces successful promotional campaigns by reminding consumers of the benefits and image produced by advertisements at the point of purchase. Copyright © Houghton Mifflin Company. All rights reserved.

35 Class Exercise (cont’d)
Is the manufacturer of the product using individual, family, or brand-extension branding? You work for a firm that is introducing a new chocolate candy bar that contains an extra amount of caffeine. Develop a brand name that is easy for customers to say, spell, and recall. positively suggests uses and special characteristics. indicates major product benefits. can be protected easily through registration. Coca-Cola products are good examples of individual and brand-extension branding, although students may be unaware that besides Coke, many bottlers also produce other soft drinks that do not carry the Coke brand name. Examples are Fresca and Barq’s Root Beer. Some candy bars may provide examples of family branding (Nestlé or Hershey’s). Usually, students will violate one of these guidelines, which points to why some consulting firms now specialize in developing new company or brand names. Copyright © Houghton Mifflin Company. All rights reserved.

36 Copyright © Houghton Mifflin Company. All rights reserved.

37 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 Copyright © Houghton Mifflin Company. All rights reserved.

38 Debate Issue Should fast-food restaurants use environmentally responsible packaging even when such packaging is less effective in preserving product quality? YES Traditionally, fast-food marketers have used too much packaging, which creates unnecessary amounts of garbage going into landfills. Traditionally, the type of materials used were not biodegradable. Fast-food marketers must focus on the long-term impact on the environment rather than on product packaging that provides the greatest amount of customer satisfaction when the product is consumed. NO A fast-food marketer should use a package that allows the customer to receive the highest-quality food product at the point of purchase. Proper disposal of a package, after the customer no longer needs it, is not the responsibility of the fast-food organization. Most fast-food customers prefer to have the highest-quality food product, even if the package is not environmentally responsible. Copyright © Houghton Mifflin Company. All rights reserved.

39 Universal Product Code (UPC)
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 Copyright © Houghton Mifflin Company. All rights reserved.

40 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 Copyright © Houghton Mifflin Company. All rights reserved.

41 Purposes of Labels (cont’d)
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 Copyright © Houghton Mifflin Company. All rights reserved.

42 Why Is This Organization Concerned About Fraudulent Labeling?
Reprinted with permission of Organic Consumers Association. Copyright © Houghton Mifflin Company. All rights reserved.

43 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 Copyright © Houghton Mifflin Company. All rights reserved.

44 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 Copyright © Houghton Mifflin Company. All rights reserved.

45 Chapter Quiz Compared to creating and developing a brand from scratch, a firm sometimes buys a brand from another company at a premium price because outright purchase is more challenging strategically. less time consuming. less risky. less expensive. less expensive and less risky. E D C Copyright © Houghton Mifflin Company. All rights reserved.

46 Chapter Quiz (cont’d) Which of the following laws was enacted by Congress in 1988 to strengthen trademark protection? Brand Protection Act Lanham Act Trademark Infringement Act Trademark Law Revision Act U.S. Patent and Trademark Act Copyright © Houghton Mifflin Company. All rights reserved.

47 Chapter Quiz (cont’d) To use co-branding effectively, which one of the following is probably least important? The brands involved should represent a complementary fit in a customer’s mind. The brands that are teamed together should not lose their individual identities. The brands involved should be owned by two or more organizations. To avoid confusion on the part of customers, co-branding should be done in a way so that it is obvious which brand is the main brand or key brand. The co-branded product should be able to benefit from the distribution system of both brands involved. Copyright © Houghton Mifflin Company. All rights reserved.

48 Chapter Quiz (cont’d) To promote an overall company image, packages of Pillsbury cake and cookie mixes have similar designs and colors. This approach is known as family branding. brand managing. line consistency. family packaging. product grouping. Copyright © Houghton Mifflin Company. All rights reserved.


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