Chapter 31 Branding Packaging and Labeling Branding Elements

Chapter 31 Branding, Packaging, and Labeling

Branding Elements and Strategies 31. 1 Ø After finishing this section you will know: l l Define the nature, scope, and importance of branding in product planning List the various branding elements Identify the different types of brands Explain how to classify branding strategies

Branding Brand- name, term, design, or symbol that identifies a business or organization and its products Ø Divided into two categories: 1. Corporate brand- used to identify the business and refer to quality and reliability Ø l Examples: Coca-Cola, Mc. Donald’s, and Citibank

Branding 2. Product brands- used to relate quality and reliability 1. Examples: Pepsi, Coke, Barbie, and Whopper

Branding Ø Brand name- the word, group of words, letters, or numbers representing a brand that can be spoken Ø Examples: PT Cruiser and Mountain Dew

Branding Ø Brand mark- part of the brand that is a symbol or design Ø Can include distinct coloring or lettering which is usually not spoken Ø Examples: Apple Computer’s Apple or Greyhound Bus Company’s Greyhound

Branding Ø Trade name- identifies the company or a division of a particular corporation Ø The legal name the business uses when it does business Ø Examples: Dell, Kellogg’s, or Xerox

Branding Ø Trade character- brand mark with human form or characteristics Ø Examples: Jolly Green Giant, Pillsbury Doughboy, or Keebler Elves

Branding Ø Trademark- brand name, brand mark, trade name, trade character, or a combination of these that is given legal protection by the federal government Ø Followed by a registered trademark symbol “®” Ø Trademarks last 10 years after which they need to be renewed to be valid

Importance of Brands in Product Planning Ø Helps build customer loyalty Ø Assures customers that products carrying the same brand are of a consistent quality Ø Addresses new target markets Ø Establishes an image for a product or company

Generating Brands 75% of all companies introduce a new product name on an annual basis Ø Procter and Gamble has reduced its number of brand names from 600 to 400 Ø Often generated internally by employees Ø Computer software programs specialize in generating brand names Ø l Some of these programs can automatically check to see if the names are already trademarked by another company

Generating Brands Ø Branding agencies, name consultants, or public relations firms can be hired Ø Names may change when new products are added, image is modified, or when entering new markets Ø 50% of name changes take place because of mergers

Manufacturer Brands Ø Manufacturer Brands-aka producer brands, are owned and initiated by manufacturers Ø Examples: General Electric, Heinz, Motorola Ø Generate the majority of sales Ø Identify and indicate a standard quality and price for products

Private Distributor Brands Private distributor brands- aka private brands, store brands, or dealer brands, owned and initiated by wholesalers and retailers Ø The manufacturers name does not appear on the product Ø Appeal to customers who want the quality and performance of manufacturer brands at a lower price Ø Popular with retailers because they are more profitable Ø Examples: Kmart, Radio Shack Ø

Generic Brands Generic brands- represent a general product category and do not carry a company or brand name Ø Package carries only a description of the product such as “pancake mix” Ø Sold in supermarkets and discount stores Ø 30 -50% lower priced than- manufacturer brands Ø 10 -15% lower priced than- private distributor brands Ø

Brand Extension Brand extension- uses an existing brand name for an improved or new product in the product line Ø Example: Ocean Spray Cranberry juice extended its product line by adding Cran ® Apple and other various fruit blends. Ø Potential problem- causes brand dilution when the original product loses its strength in brand identity because it has been stretched to include too many products Ø

Brand Licensing Ø Brand licensing- legal authorization by trademarked brand owners to allow another company to use its brand, brand mark, or trade character for a fee Ø Fees are known as royalty fees

Mixed Brands Ø Mixed-brand strategy- involves simultaneously offering a combination of manufacturer, private distributor, and generic brands Ø Markets products under its own name and that of a reseller because the market segment attracted to the reseller is different from their own market

Co-Branding Ø Co-branding strategy- combines one or more brands to increase customer loyalty and sales for each individual brand Ø Example: Ford Motor Company wanted to increase brand loyalty among Harley. Davidson riders so they created a Limited Edition 2000 F-150 Harley-Davidson pickup truck.

Assignment Ø Reviewing Key Terms/Thinking Critically Ø Page 573 Ø #1 -5

Packaging and Labeling 31. 2 Ø After finishing this section you will know: l l The principal functions of product packaging The main functions of labels

Packaging Ø Package- the physical container or wrapping for a product Ø Represents the size, shape, and final appearance of a product at the time of sale

Functions of Packaging A selling tool The Functions of Packaging: 1. Promoting and selling the product- more sales focus on self-service layouts Ø Attractive, colorful, and artistic packages have promotional value Ø Brand name on a package reminds the customer of the product’s manufacturer Ø A better container can even create new sales or minimize sales lost to competitors Ø

Functions of Packaging Defining product identity- packages are used to invoke prestige, convenience, or status 3. Providing information- packages give directions for using the product, information about its contents, product guarantees, nutritional value, and potential hazards 2.

Functions of Packaging Meeting customer needs- product packages come in various sizes to meet the needs of different market segments Examples: Family packs for larger families, or smaller packages for individuals 5. Ensuring safe use- package can improve product safety for the customer Example: Many products formerly packaged in glass now come in plastic. Many products are packaged in child proof containers. 4.

Functions of Packaging Protecting the product- must protect a product during shipping, storage, and display Ø Should prevent tampering while on display Ø Must protect product from breakage or spoilage 6.

Contemporary Packaging Issues Ø Packaging offers companies unique opportunities to address lifestyle changes and social and political concerns

Environmental Packaging Ø Most Americans support less wasteful packaging Ø Willing to pay more for products that reduce waste

Cause Packaging Can be used to promote non-product issues Ø Printing messages on packages, bags, and bills encourages consumers to participate in politics Ø Example: Ben & Jerry’s Ice Cream promotes saving the rain forests and opposes the use of bovine growth hormone to stimulate milk production in cows. Ø

Labeling Ø Label- an information tag, wrapper, seal, or imprinted message that is attached to a product or its package Ø Information on labels helps customers to decide if the product is right for them Ø Main functions of a label is to inform customers about a product’s contents and give directions for use

Three Kinds of Labels Brand label- gives brand name, trademark, or logo 2. Descriptive label- gives information about the product’s use, construction, care, performance, and other features 3. Grade label- states the quality of the product 1.

Labeling Laws Ø Past- public criticized product labeling for failing to offer complete and truthful information Ø Now- many package labels must meet local, state, and federal standards Ø Federal mandates require: l l Name and address of manufacturer Quantity of the contents

Labeling Laws Ø Fair Packaging and Labeling Act (FPLA) 1966 - requires mandatory labeling requirements and provides the authority to the U. S. Food and Drug Administration and the Federal Trade Commission to establish packaging regulations

Labeling Laws Ø 1992 Amendment to FPLA- packaging of selected products to include metric measurements as well as standard

The Federal Food and Drug Administration The Federal Nutrition Labeling and Education Act 1990 - requires labels to give nutritional information on how a food fits into an overall daily diet Ø Must clearly state the amount of- calories, fat, carbohydrates, sodium, cholesterol, and protein in each serving, as well as the percentage of a daily intake of 2000 calories Ø Health warnings must also be placed on certain packages Ø

Federal Trade Commission Ø Responsible for monitoring for deceptive advertising that is false or misleading Ø Care Labeling Rule- passed by the FTC in 1972 - requires that care labels be placed in textile clothing

Federal Trade Commission Ø Guidelines in 1992 - environmental terms previously had loose definitions and could be used freely on labels and in advertisements Ø Recycled content- proof must be given about the amount of material in a product or package that has been kept form landfill or retrieved as manufacturing scraps

Federal Trade Commission Recyclable- can only be used if the product or package can be reused as raw material for a new product or package Ø Ozone friendly or ozone safe- can only be used if the product does not contain ozone-depleting chemicals Ø Degradable, biodegradable, and photodegradable- can only be used if the product will decompose into elements found in nature within a reasonable short period of time Ø

Assignment Ø Reviewing Key Terms/Thinking Critically Ø Page 580 Ø #1 -5