CHAPTER 11 PRODUCT BRANDING AND PACKAGING DECISIONS Copyright

CHAPTER 11 PRODUCT, BRANDING, AND PACKAGING DECISIONS Copyright © 2016 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 11 -1

Product, Branding, and Packaging Decisions LEARNING OBJECTIVES LO 1 Describe the components of a product. LO 2 Identify the types of consumer products. LO 3 Explain the difference between a product mix’s breath and a product line’s depth, LO 4 LO 5 LO 6 LO 7 LO 8 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. 11 -2

Red Bull Jay Nemeth/ZUMA Press/Newscom 11 -3

Complexity of Products Michael Blann/Digital Vision/Getty Images 11 -4

Types of Products Specialty Shopping Convenience Unsought 11 -5

CHECK YOURSELF 1. Explain the three components of a product. 2. What are the four types of consumer products? 11 -6

Product Mix and Product Line Decisions Abbreviated List of BMW Product Mix Product Lines BMW 2 Series 3 Series 4 Series 5 Series 6 Series 7 Series X Series Z 4 Series M Series BMW i Hybrid MINI Clubman Convertible Countryman Coupe Hardtop John Cooper Works Paceman Roadster Rolls-Royce Ghost Phantom Wraith Motorrad C Series F Series G Series K Series R Series Source: Kellogg’s 2010 annual report, http: //annualreport 2010. kelloggcompany. com/innovation. htm. 11 -7

Product Mix and Product Line Decisions Breadth • Number of product lines Depth • Number of categories within a product line Courtesy Pepsi Cola Company 11 -8

Change Product Mix Depth § Increase Depth § Band-Aid now has over 40 products to heal cuts. § Decrease Depth § Mc. Cormick spices eliminates dozens of products each year. ©M Hruby 11 -9

Change Product Mix Breadth • Increase Breadth – • True Religion Brand Jeans now are a lifestyle brand with apparel, belts, swimwear and fragrances Decrease Breadth – Due to competitive changes, TCBY is now focusing on Yogurt. ©Procter & Gamble 11 -10

§ How is this changing the product mix? § Does it increase breadth or depth? § Is this research or advertising? CLOROX® is a registered trademark of The Clorox Company Used with permission Product Line Decisions 11 -11

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? 11 -12

Branding A brand can use: Name, logo symbols, characters, slogans, jingles and even distinctive packages. http: //www. youtube. com/watch? v=a. Ndd. W 2 xm. Zp 8 11 -13

Mc. Graw-Hill Companies, Inc. What Makes a Brand? Logos and symbols Characters URLs Slogans www. e. Bay. com ©M. Hruby. Brand name Branding Jingles/Sounds “Law & Order” 11 -14

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 11 -15

Brand History in Advertising 11 -16

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. 11 -17

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 11 -18

Brand Equity: Brand Associations Vince Talotta/Toronto Star/Getty Images 11 -19

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 11 -20

CHECK YOURSELF 1. How do brands create value for the customer and the firm? 2. What are the components of brand equity? 11 -21

Brand Ownership Manufacturer brands or national brands Private-label brands or Store Brands • • Premium Generic Copycat Exclusive co-branded 11 -22

Brand Ownership Private Label Mc. Graw-Hill Companies 11 -23

Brand Ownership Who Owns the Brand? Manufacturer/National Brand Common Name or Not? Retailer/Store Brand Family Brands Kellogg’s family line Kroger’s line Individual Brands Kellogg’s individual brand Kroger’s individual brand All photos: ©M. Hruby. 11 -24

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. 11 -25

Brand Dilution Evaluate the fit between the product class of the core brand the extension. Evaluate consumer perceptions of the attributes of the core brand 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? 11 -27

Co-branding ©M Hruby Zite Personalized Magazine 11 -28

Brand Licensing Photo by D. larke Evans/NBAE via Getty Images. 11 -29

Brand Repositioning § How is this repositioning? Courtesy The Procter & Gamble Company 11 -30

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? 11 -31