Branding Packaging and Labeling Topics Branding Importance Types

Branding, Packaging and Labeling

Topics • Branding – Importance – Types – Strategies • Packaging – Function – Issues • Labeling

Branding • Brand – Name, term, design, or symbol that identifies a business and its products • Corporate brands – Identify the business and reflect image across all products – Coca-Cola, Daimler-Chrysler • Product brands – Among most important assets and powerful selling elements – Coke, Dodge

Brands • Brand Name – Words, letter numbers the represent brand – Corvette, Airwalk, Fed. Ex • Brand Mark – Logo or symbol • Trade Name – Legal name a company uses to conduct business – Dell, Xerox

Brands • Trade Character – Brand mark as a character with human qualities – Keebler, Doughboy • Trademark – Any combination of these that is legally protected – Have been expanding to include sound, color, smell • Harley trademarked its engine sound

Importance of Branding • Builds customer loyalty – Customers pay more for recognized names • Assures customer of quality & reduces risk of dissatisfaction • Assists in extending lines – Customers more willing to try familiar names

Generating Brands • Estimated that 75% of companies introduce a new product brand annually • In 1999, 79, 000 trademarks were registered • Global brands often consolidate names – Confusion can result from multiple names for the same product • In UK, 3 Musketeers is known as Mars Bar

Types of Brands • Manufacturer Brands – Producer brands, owned by manufacturer – Gives impression of standard quality, performance & status – Most brands are manufacturer brands • • 65% of appliances 70% of food 80% of gas 100% of cars

Types of Brands • Private distributor brands – Store or dealer brands, owned by retail stores – Item is purchased to be sold exclusively at certain stores, i. e. Radio Shack brand – Manufacturer name is not displayed – Higher returns for store – Builds retailer loyalty • Craftsman, Kenmore sold only at Sears

Types of Brands • Generic Brands – Carry no company name, just product description – Sold much cheaper, 30 – 50% lower than manufacturer brands, and 10 – 15% lower than store brands – Jewel supermarkets in Chicago were the first to offer

Branding Strategies • Brand extension – Uses existing brand name to promote new products – Dilution may become a problem • Brand Licensing – Allow other companies to use trademarks for a fee, plus royalties on sales – Enhances image & helps sales of core products

Branding Strategies • Mixed branding – Offer combination of manufacturer, store & generic brands – Manufacturer will sell under a national brand, then sell extra to a store to be repackaged under a store brand, then make a generic – Maximizes profit by appealing to all segments

Branding Strategies • Co-Branding – Uses two or more brands to increase loyalty and sales for individual brands – Builds recognition for each, work best if product complement each other • Starbucks in Barnes & Nobles • Smuckers jelly in Pop-Tarts

Packaging • Physical container or wrapping – Approximately 10% of retail price is spent on package – In some cases, package is most expensive part of production

Function of Packaging • Key selling tool • Promoting & selling – Reaction to packaging is important to overall success or failure – New designs may not replace old, but complement it • Pump soap containers • Defining product identity – Invoke prestige, convenience, status, etc.

Function of Packaging • Provide information – Directions on how to use, warnings, ingredients • Meet customer needs – Various sizes for different market segments – Must adapt to meet changing lifestyles

Function of Packaging • Ensure safe use – Tamper resistance, child proofing – Blisterpacks, molded plastic with foil or cardboard backing • Gums and some medicine • Protection – Shipping, storage, display – Prevent shoplifting, breakage & spills

Contemporary Issues • Changing social and political atmosphere leads to changes in product & package – Environmental packaging • Surveys indicate consumers will pay more for these packages – Cause packaging • Promoting unrelated issues on package, usually socially or politically motivated – Ben & Jerry’s, Body Shop

Labeling • Informational tag, wrapper, seal or imprinted message • Main function is to inform about contents and give directions • Protects company from liability & lawsuits

Labels • Brand label – Gives name, logo & trademark • Descriptive label – Gives information about use, construction, care, performance, etc. • Does not contain all the information that a consumer might want • Grade label – Give product quality

Labels • Food labels must contain weight, dating and storage information, UPC, etc. – Net weight is entire product minus the weight of package and packing materials – Dating options are • • Date packed Sell by date – last day it should be sold Best if – last day for best quality Expiration – should not be used after

Labeling Laws • Public outcry has lead to regulations on what needs to be incorporated on labels • Fair Packaging & Labeling Act (FPLA) gives the FDA and FTC authority over labeling • Not all countries have the same label laws – Coke was pulled off Italian shelves because they would not list the “secret ingredient”

Labeling Laws • FDA – Enacted a law to require labels to give information on how the product fits into a daily diet – Developed definitions for light, free, low, reduced and good source – Warning labels on cigarettes and alcohol – Developing regulations for genetically modified foods

Labeling Laws • FTC – Responsible for ensuring labels are not deceptive – Released guidelines for environmental claims • Requires proof for all claims