Marketing Essentials n Chapter 31 Branding Packaging and

Marketing Essentials n Chapter 31 Branding, Packaging, and Labeling Section 31. 1 Branding Elements and Strategies Chapter 31 n Branding, Packaging, and Labeling 1

SECTION 31. 1 Branding Elements and Strategies What You'll Learn = The nature, scope, and importance of branding in product planning = The various branding elements = The different types of brands = How to classify branding strategies Chapter 31 n Branding, Packaging, and Labeling 2

SECTION 31. 1 Branding Elements and Strategies Why It's Important The right name is an important part of every successful business. The name and symbols of a business or a product project the personality of the company, product, or service. Chapter 31 n Branding, Packaging, and Labeling 3

SECTION 31. 1 Branding Elements and Strategies Key Terms = brand = private distributor brand = brand name = generic brand = brand mark = brand extension = trade name = brand licensing = trade character = mixed-brand strategy = trademark = co-branding strategy = manufacturer brand Chapter 31 n Branding, Packaging, and Labeling 4

SECTION 31. 1 Branding Elements and Strategies A brand is a name, term, design, or symbol (or combinations of them) that identifies a business or organization and the products that they offer. Brands are divided into two categories: = corporate brands = product brands Slide 1 of 6 Chapter 31 n Branding, Packaging, and Labeling 5

SECTION 31. 1 Branding Elements and Strategies Corporate brands identify the business and reflect quality, value, and reliability. = Example: Coca-Cola, Disney, Mc. Donald's, and Citibank Product brands connote quality and reliability for a particular product. = Example: Pepsi, Coke, Barbie, Whopper, and Big Mac Slide 2 of 6 Chapter 31 n Branding, Packaging, and Labeling 6

SECTION 31. 1 Branding Elements and Strategies A brand name is the word, group of words, letters, or numbers of a brand that can be spoken. = Example: PT Cruiser, Mountain Dew, Snack. Wells, and K 2 A brand mark is a symbol, design, or distinctive coloring or lettering that identifies a brand. = Example: U. S. Postal Service's eagle, Apple Computer's apple Slide 3 of 6 Chapter 31 n Branding, Packaging, and Labeling 7

SECTION 31. 1 Branding Elements and Strategies A trade name is the legal name under which a company or division of a corporation does business. = Example: Amex, Dell, Kellogg's, and Xerox A trade character is a brand mark with human form or characteristics. = Example: The Jolly Green Giant, the Pillsbury Doughboy Slide 4 of 6 Chapter 31 n Branding, Packaging, and Labeling 8

SECTION 31. 1 Branding Elements and Strategies A trademark is a brand name, brand mark, trade name, trade character, or a combination of these given legal protection by the federal government and noted by the trademark symbol ( ). Slide 5 of 6 Chapter 31 n Branding, Packaging, and Labeling 9

SECTION 31. 1 Branding Elements and Strategies Brand names, brand marks, trade names, trade characters, and trademarks are often combined to form a firm's corporate symbol or name. Slide 6 of 6 Chapter 31 n Branding, Packaging, and Labeling 10

SECTION 31. 1 Branding Elements and Strategies Top Ten Brands Rank Brand Company 1999 Advertising (in millions of dollars) 1 Chevrolet vehicles General Motors Corp. 762. 4 2 AT&T telephone services Dodge vehicles AT&T Corp. 711. 4 Daimler. Chrysler 651. 7 4 Ford vehicles Ford Motor Company 629. 5 5 Mc. Donald's restaurants Toyota vehicles Sears department stores Mc. Donald's Corp. Toyota Motor Corp. Sears, Roebuck & Co. 627. 2 Sprint telephone services Chrysler vehicles Sprint Corp. 470. 1 Daimler. Chrysler 426. 5 Nissan vehicles Nissan Motor Co. 416. 9 3 6 7 8 9 10 569. 4 556. 1 Brands are often a company’s most valuable asset. What is the total 1999 advertising spending for these top ten brands? Do you think these brands would continue to be valuable if the companies reduced or eliminated their advertising? Chapter 31 n Branding, Packaging, and Labeling 11

SECTION 31. 1 Branding Elements and Strategies Importance of Brands in Product Planning The use of brands is important in product planning for several reasons. Branding: = builds customer loyalty = assures customers that products carrying the same brand are of a consistent quality = addresses new target markets = establishes an image for a product or company Chapter 31 n Branding, Packaging, and Labeling 12

SECTION 31. 1 Branding Elements and Strategies Generating Brands Seventy-five percent of companies introduce a new product name each year. Brand names are generated by: = company employees = specialized computer software programs = branding agencies, naming consultants, and public relations agencies Half of all corporate name changes occur because of company mergers and acquisitions. Chapter 31 n Branding, Packaging, and Labeling 13

SECTION 31. 1 Branding Elements and Strategies Types of Brands Three classifications of brands are: = manufacturer brands = private distributor brands = generic brands Slide 1 of 3 Chapter 31 n Branding, Packaging, and Labeling 14

SECTION 31. 1 Branding Elements and Strategies Types of Brands Manufacturer brands, also called producer brands, are owned and initiated by manufacturers. = Example: General Electric, Heinz, Motorola Private distributor brands, also called private brands, store brands, or dealer brands, are owned and initiated by wholesalers and retailers. = Example: Radio Shack, Kmart Slide 2 of 3 Chapter 31 n Branding, Packaging, and Labeling 15

SECTION 31. 1 Branding Elements and Strategies Types of Brands Generic brands represent a general product category and do not carry a company or brand name. The packaging carries only a description of the product, such as “pancake mix” or “paper towels. ” They are usually much cheaper than brand-name products. Slide 3 of 3 Chapter 31 n Branding, Packaging, and Labeling 16

SECTION 31. 1 Branding Elements and Strategies Branding strategies are the ways companies use brands to meet sales and company objectives. Strategies include: = brand extensions = brand licensing = mixed branding = co-branding Chapter 31 n Branding, Packaging, and Labeling 17

SECTION 31. 1 Branding Elements and Strategies Brand Extension Brand extension is a branding strategy that uses an existing brand name for an improved or new product in the product line. = Example: Ocean Spray Cranberry Juice extended to Cran-Apple, Cran-Raspberry, etc. Advantages: Reduces risk of new product failure Disadvantages: Over-extending a product line can cause brand dilution Chapter 31 n Branding, Packaging, and Labeling 18

SECTION 31. 1 Branding Elements and Strategies Brand Licensing Brand licensing is the legal authorization by a trademarked brand owner to allow another company (the licensee) to use its brand, brand mark, or trade character for a fee. Advantages: Enhance company image, sell more products Chapter 31 n Branding, Packaging, and Labeling 19

SECTION 31. 1 Branding Elements and Strategies Mixed Brands A mixed-brand strategy involves simultaneously offering a combination of manufacturer, private distributor, and generic brands. = Example: Union Carbide sells Glad brand garbage bags and generic brand garbage bags. Chapter 31 n Branding, Packaging, and Labeling 20

SECTION 31. 1 Co-Branding Elements and Strategies A co-branding strategy combines one or more brands to increase customer loyalty and sales for each individual brand. = Example: Kellogg’s Pop-Tarts are made only with Smucker’s fruit filling. Starbucks Coffee Co. opens coffee shops inside Barnes & Noble bookstores. Chapter 31 n Branding, Packaging, and Labeling 21

31. 1 ASSESSMENT Reviewing Key Terms and Concepts 1. What is the difference between a brand name and a brand mark? 2. Why is branding important to product planning? 3. Name three types of brands. 4. List four different branding strategies. Chapter 31 n Branding, Packaging, and Labeling 22

31. 1 ASSESSMENT Thinking Critically Internet service providers are teaming with airlines, financial institutions, media outlets, celebrities, and non-profit groups to offer private-label Web access. Do you think that individuals want to receive their Internet access from the New York Yankees, David Bowie, Pepsi, or their local bank? Why or why not? Chapter 31 n Branding, Packaging, and Labeling 23

31. 1 Graphic Organizer Types of Brands TYPES OF BRANDS Manufacturer Brands Private Distributor Brands Generic Brands Chapter 31 n Branding, Packaging, and Labeling 24

Marketing Essentials End of Section 31. 1 Chapter 31 n Branding, Packaging, and Labeling 25

Marketing Essentials n Chapter 31 Branding, Packaging, and Labeling Section 31. 2 Packaging and Labeling Chapter 31 n Branding, Packaging, and Labeling 26

SECTION 31. 2 Packaging and Labeling What You'll Learn = The principal functions of product packaging = The main functions of labels Chapter 31 n Branding, Packaging, and Labeling 27

SECTION 31. 2 Packaging and Labeling Why It's Important While branding gives a specific brand personality, packaging puts a face on a product. Effective packaging creates a good impression, helps to sell the product, and communicates benefits to customers. Chapter 31 n Branding, Packaging, and Labeling 28

SECTION 31. 2 Packaging and Labeling Key Terms = package = label Chapter 31 n Branding, Packaging, and Labeling 29

SECTION 31. 2 Packaging and Labeling Packaging A package is the physical container or wrapping for a product. 10 percent of a product's retail price is spent on package development and design and the package itself. Chapter 31 n Branding, Packaging, and Labeling 30

SECTION 31. 2 Packaging and Labeling Functions of Packaging A package is a selling tool. Its functions include: = promoting and selling the product = defining product identity = providing information = meeting customer needs = ensuring safe use = protecting the product Chapter 31 n Branding, Packaging, and Labeling 31

SECTION 31. 2 Packaging and Labeling Functions of Packaging Promoting and Selling the Product Customer reaction to a package and brand name is an important factor in determining marketplace success or failure. Defining Product Identity Packages can invoke prestige, convenience, status, or other positive attributes. Slide 1 of 3 Chapter 31 n Branding, Packaging, and Labeling 32

SECTION 31. 2 Packaging and Labeling Functions of Packaging Providing Information Packages give directions for product use, information about contents, guarantees, nutritional information, and potential hazards. Meeting Customer Needs Various sizes meet the needs of different market segments: family packs meet the needs of larger families; smaller packages are made for individuals. Slide 2 of 3 Chapter 31 n Branding, Packaging, and Labeling 33

SECTION 31. 2 Packaging and Labeling Functions of Packaging Ensuring Safe Use Plastic packaging, tamper-resistant packaging, and childproof containers protect customers. Protecting the Product Packages protect a product during shipping, storage, and display, prevent tampering, and sometimes help prevent shoplifting of the product. Slide 3 of 3 Chapter 31 n Branding, Packaging, and Labeling 34

SECTION 31. 2 Packaging and Labeling Contemporary Packaging Issues Product packaging offers companies unique opportunities to address lifestyle changes as well as social and political concerns. Companies often consider using: = environmentally friendly packaging = packaging that makes social and political statements Slide 1 of 2 Chapter 31 n Branding, Packaging, and Labeling 35

SECTION 31. 2 Packaging and Labeling Contemporary Packaging Issues Environmental Packaging Some customers are willing to pay more for products with packages that are reusable, recyclable, less wasteful, and safer for the environment. Cause Packaging Some companies use packages to promote social issues. = Example: Ben & Jerry’s Homemade ice cream cartons promote saving the rain forest. Slide 2 of 2 Chapter 31 n Branding, Packaging, and Labeling 36

SECTION 31. 2 Packaging and Labeling A label is an information tag, wrapper, seal, or imprinted message that is attached to a product or its package. A label’s purpose is to: = inform about a product’s contents and direction for use = protect companies from legal liability = contain a brand name, logo, ingredients, special promotional messages, and other useful information Chapter 31 n Branding, Packaging, and Labeling 37

SECTION 31. 2 Packaging and Labeling Laws Many package labels must meet local, state, and federal standards to prevent manufacturers from misleading consumers. Chapter 31 n Branding, Packaging, and Labeling 38

SECTION 31. 2 Packaging and Labeling The Federal Food and Drug Administration The FDA administers the Federal Nutrition Labeling and Education Act passed in 1990, which protects consumers from deceptive labeling and establishes standards for use of terms and health warnings. Chapter 31 n Branding, Packaging, and Labeling 39

SECTION 31. 2 Packaging and Labeling The Federal Trade Commission The FTC passed the Care Labeling Rule in 1972 to require that care labels be placed in clothing. The FTC also released guidelines for making environmental claims on labels, such as made from recycled materials or recyclable. Chapter 31 n Branding, Packaging, and Labeling 40

31. 2 ASSESSMENT Reviewing Key Terms and Concepts 1. What is a package? 2. List the principal functions of product packaging. 3. What is a product label? 4. What are the main functions of labels? Chapter 31 n Branding, Packaging, and Labeling 41

31. 2 ASSESSMENT Thinking Critically Many popular products have symbols on their packages telling consumers how to cook, clean, and wash the products. Why have symbols and graphic directions been placed on many packaged products? Chapter 31 n Branding, Packaging, and Labeling 42

Marketing Essentials End of Section 31. 2 Chapter 31 n Branding, Packaging, and Labeling 43