Chapter eleven product branding and packaging decisions 1

Chapter eleven product, branding, and packaging decisions 1 ©Mc. Graw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of Mc. Graw-Hill Education.

Learning Objectives LO 11 -1 Describe the components of a product. LO 11 -2 Identify the types of consumer products. LO 11 -3 Explain the difference between a product mix’s breadth and a product line’s depth. LO 11 -4 Identify the advantages that brands provide firms and consumers. LO 11 -5 Explain the various components of brand equity. LO 11 -6 Determine the various types of branding strategies used by firms. LO 11 -7 Distinguish between brand extension and line extension. LO 11 -8 Indicate the advantages of a product’s packaging and labeling strategy. 2 © Mc. Graw-Hill Education

Red Bull 3 © Mc. Graw-Hill Education

Complexity of Products Actual Product Brand name Quality level Photodisc/Getty Images RF Packaging Features/Design Core Customer Value Associated Services Financing Product warranty Product support 4 © Mc. Graw-Hill Education

Types of Products Specialty Shopping Convenience Unsought 5 © Mc. Graw-Hill Education

check yourself-1 1. Explain the three components of a product. 2. What are the four types of consumer products? 6 © Mc. Graw-Hill Education

Product Mix and Product Line Decisions-1 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 S Series 7 © Mc. Graw-Hill Education

Product Mix and Product Line Decisions-2 Breadth Depth • Number of product lines • Number of categories within a product line Courtesy Pepsi Cola Company 8 © Mc. Graw-Hill Education

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

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 10 © Mc. Graw-Hill Education

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

check yourself-2 1. What is the difference between product mix breadth and product line depth? 2. Why change product mix breadth? 3. Why change product line depth? 12 © Mc. Graw-Hill Education

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” 13 © Mc. Graw-Hill Education

Value of Branding for the Customer and the Marketer Facilitate Purchasing Establish Loyalty Protect from Competition Are Assets Impact Market Value 14 © Mc. Graw-Hill Education

Brand Equity: Brand Awareness 2013 Rank 2012 Rank Brand Country Sector Brand Value (in $ Billions) 1 2 Apple United States Technology $98. 3 2 4 Google United States Technology 93. 2 3 1 Coca-Cola United States Beverages 79. 2 4 3 IBM United States Business Services 78. 8 5 5 Microsoft United States Technology 59. 5 6 6 GE United States Diversified 46. 9 7 7 Mc. Donald’s United States Restaurants 41. 9 8 9 Samsung South Korea Technology 39. 6 9 8 Intel United States Technology 37. 3 10 10 Toyota Japan Automotive 35. 3 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. 15 © Mc. Graw-Hill Education

Brand Equity: Perceived Value How do discount retailers like Target, T. J. Maxx, and H&M create value for customers? ages mer/Getty Im ter Kra Photo by Pe 16 © Mc. Graw-Hill Education

Brand Equity: Brand Associations Vince Talotta/Toronto Star/Getty Images 17 © Mc. Graw-Hill Education

Brand Equity: Brand Loyalty Consumers are often less sensitive to price Marketing costs are much lower Firm insulated from the competition surance obile In utual Autom M rm a F te ta rmission Copyright S Used by pe 5 0 0 2 y n a p Com 18 © Mc. Graw-Hill Education

check yourself-3 1. How do brands create value for the customer and the firm? 2. What are the components of brand equity? 19 © Mc. Graw-Hill Education

Brand Ownership-1 Manufacturer brands or national brands Private-label brands or Store Brands • • Premium Generic Copycat Exclusive co-branded 20 © Mc. Graw-Hill Education

Brand Ownership-2 Who Owns the Brand? Manufacturer/National Brand Common Name or Not? Family Brands Kellogg’s family line Kroger’s line Individual Brands Kellogg’s individual brand Kroger’s individual brand All photos: ©M. Hruby. © Mc. Graw-Hill Education Retailer/Store Brand 21

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. 22 © Mc. Graw-Hill Education

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? 24 © Mc. Graw-Hill Education

Co-branding ©M Hruby Zite Personalized Magazine © Mc. Graw-Hill Education 25

check yourself-4 1. What are the differences between 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? 28 © Mc. Graw-Hill Education

Packaging What other packaging do you as a consumer find useful? ©M. Hruby. 29

Product Labeling C Sherburne/Photo. Link/Getty Images ©The Mc. Graw-Hill Companies, Inc/Elite Images 30 © Mc. Graw-Hill Education