Chapter 9: Product, Branding, and Packaging Concepts

1. Chapter 9:Product, Branding, and Packaging Concepts Pride/Ferrell Foundations of Marketing Fourth Edition Prepared by Milton Pressley University of New Orleans

2. Objectives • Understand the concept of a product and how products are classified. • Explain the concepts of product item, product line, and product mix, and understand how they are connected. • Understand the product life cycle and its impact on marketing strategies. • Describe the product adoption process. • Explain the value of branding and the major components of brand equity.

3. Objectives • Recognize the types of brands and how they are selected and protected. • Identify two types of branding policies, and explain brand extensions, co-branding and brand licensing. • Describe the major packaging functions and design considerations and how packaging is used in marketing strategies. • Understand the functions o labeling and selected legal issues.

4. Product Decisions

5. What Is a Product? • A Product Defined • A good, a service, or an idea received in an exchange • Tangible or intangible or a combination • products vs services • Functional, social, and psychological utilities or benefit

6. What Is a Product? What is a Product? A product can be a service, and idea, goods, or a combination of these. The Houston Museum of Natural Science provides a service.

7. Consumer Products • Product purchased to satisfy personal and family needs - Consumer product categories: Convenience products: inexpensive and frequently purchased Shopping products: buyers willing to expend considerable effort in planning and making the purchase Specialty products: possess one or more unique characteristics and buyers are willing to expend considerable effort to obtain them Unsought products: purchased when a sudden problem must be solved, customers are unaware of them and do not usually think of purchasing them

8. Classifying Products Convenience Product and Shopping Product An ice cream bar is a convenience product. Hotels are shopping products.

9. Business Products • Products bought to use in an organization’s operations, to resell, or to make other products • Installations - facilities & non-portable equipment • Accessory equipment - not part of final product • Raw materials - natural materials part of product • Component parts - finished items ready for assembly or need little processing • Process materials -used in production but not identifiable • MRO supplies -maintenance, repair, and operating items not part of final product • Services - intangible products in operations

10. Product Line and Product Mix • Product item - a specific version of a product that can be designated as a distinct offering among a firm’s products • Product line - a group of closely related product items viewed as a unit because of marketing, technical or end-use considerations • Product mix - the total group of products that an organization makes available to customers • Width of product mix - the number of product lines a company has • Depth of product mix - the average number of different product items offered in each product line

11. The Concepts of Product Mix, Width and Depth

12. Product Line Product Line and Product Mix This Hilton ad shows a number of Burberry’s product lines.

13. The Four Stages of the Product Life Cycle

14. Product Life Cycle: Introduction • The initial stage of a product’s life cycle—its first appearance in the marketplace—when sales start at zero and profits are negative • Risk of failure high • Buyers must be made aware of: • Features • Uses • Advantages • Sellers lack • Resources • Technological knowledge • Marketing know-how

15. Product Life Cycle: Growth • The stage of a product’s life cycle when sales rise rapidly and profits reach a peak and then start to decline • More competitors enter the market • Product pricing is aggressive • Brand loyalty becomes important • Gaps in market coverage are filled • Promotion expenditures moderate • Production efficiencies lower costs

16. Product Life Cycle: Maturity • The stage of a product’s life cycle when the sales curve peaks and starts to decline and profits continue to fall • Intense competition • Emphasis on improvements and differences in competitors’ products • Weaker competitors lose interest and exit the market • Advertising and dealer-oriented promotions predominate • Distribution sometimes expands to the global market • Strategic objectives for maturity stage • Generate cash flow • Maintain market share • Increase share of customer

17. Product Life Cycle: Decline • The stage of a product’s life cycle when sales fall rapidly • Pruning items from the product line • Cutting promotion expenditures • Eliminating marginal distributors • Planning to phase out the product

18. Product Adoption Process • The five stages of the product adoption process: • Awareness: buyer becomes aware of the product • Interest: the buyer seeks information and is receptive to learning about the product • Evaluation: the buyer considers the product’s benefits and decides whether to try it • Trial: the buyer examines, tests, or tries the product to determine if it meets his or her needs • Adoption: the buyer purchases the product and can be expected to use it again whenever the need for this general type of product arises

19. Adopter Categories Consumers fall into one of five major categories: • Innovators - first adopters of new products • Early adopters - careful choosers of new products • Early majority - those adopting new products just before the average person • Late majority - skeptics who adopt new products when they feel it is necessary • Laggards - the last adopters who distrust new products

20. Distribution of Product Adopter Categories

21. Branding • Brand–A name, term, design, symbol, or other feature that identifies a seller’s products and differentiates them from competitors’ products. • Corvette, Chevrolet, General Motors • Brand Name–The part of a brand that can be spoken, including letters, words, and numbers • Union 76, NBA, 49’ers • Brand Mark–Part not made up of words, such as a symbol or design • Nike swoosh, Mercedes star, McDonald’s arches • Trademark–legal designation of exclusive use of a brand • Trade name–full legal name of organization Brand Mark The red and white target is the brand mark for Target stores.

22. The Value of Branding • To Buyers • Helps speed consumer purchases by identifying specific preferred products • Provides a form of self-expression and status • Evaluates product quality to reduce the risk of purchase • To Sellers • Identifies and differentiates a firm’s products from competing products • Helps in the introduction of new products • Facilitates the promotion of all same-brand products • Fosters the development of brand loyalty

23. Brand Loyalty • A customer’s favorable attitude toward a specific brand. • Recognition: aware brand exists and is alternative if preferred brand unavailable • Preference: preferred over competitive offerings • Insistence: strongly preferred, no substitute

24. Top Ten Most Valuable Brands in the World

25. Most Valuable Non-Profit Brands Source: http://www.coneinc.com/stuff/contentmgr/files/0/b2b4cb81b5be7de19ddfd5bb1c5e9711/files/cone_top_100_chart.pdf (Accessed 9/14/2009)

26. Types of Brands • Manufacturer • Brands initiated by producers • Green Giant, IBM, Levis • Private Distributor • Brands initiated and owned by resellers • Sears’ Kenmore • Generic • Do not include the company name or other identifying terms • Aspirin

27. Protecting a Brand • Brands should be designed to that it can be protected easily through registration Protecting a Brand: Companies try to protect their brands by using certain phrases and symbols in their advertisements. Note the term “brand” after Ziploc, and the use of the ® symbol

28. Selecting a Brand Name • The name should • be easy to say, spell, and recall. • indicate the product’s major benefits. • suggest the product’s major uses and special characteristics. • be distinctive, setting it apart from competing brands. • be compatible with all products in line. • be designed for use and recognition in all types of media.

29. Branding Policies, Extensions and Co-Branding • Branding Policies - Individual branding: a policy of naming each product differently - Family branding: branding all of a firm’s products with the same name • Brand Extensions - using an existing brand to brand a new product • Co-Branding - using two or more brands on one product Co-Branding Lunchables is a co-branded item consisting of Oscar Mayer and Kraft products.

30. Packaging • Involves the development of a container and a graphic design for a product • Packaging Functions • Protect the product from damage • Offer convenience to consumers • Prevent waste and make storage easier • Promote the product by communicating its features, uses, Convenience Packaging Some companies compete by designing packages that are convenient to use.

31. Packaging and Marketing Strategy • Altering the Package • Secondary-Use Packaging • Category-Consistent Packaging • Innovative Packaging • Multiple Packaging • Handling-Improved Packaging

32. Major Packaging Considerations • Cost • Tamper-resistant • Design consistency • Family Packaging • Promotional Role • Verbal and nonverbal symbols • Size, shape, texture, color, and graphics • Reseller Needs • Environmentally responsible • RFID

33. Labeling • Providing identifying, promotional, legal, or other information on package labels • Help identify the product • Support promotional efforts for the product • Provide legally required labeling information • Provide information on product origin

34. Perceived Quality and Value of Products Based on Country of Origin

35. After Reviewing This Chapter You Should: • Understand the concept of a product and how products are classified. • Be able to explain the concepts of product item, product line, and product mix, and understand how they are connected. • Understand the product life cycle and its impact on marketing strategies. • Know how to describe the product adoption process. • Be able to explain the value of branding and the major components of brand equity.

36. After Reviewing This Chapter You Should: • Recognize the types of brands and how they are selected and protected. • Be able to identify two types of branding policies, and to explain brand extensions, co-branding, and brand licensing. • Know the major packaging functions and design considerations and how packaging is used in marketing strategies. • Understand the functions o labeling and selected legal issues.

37. Key Concepts • Good • Service • Idea • Consumer products • Business products • Convenience products • Shopping products • Specialty products • Unsought products • Installations • Accessory equipment • Raw materials • Component parts • Process materials • MRO supplies • Business services • Product item • Product line • Product mix • Width of product mix • Depth of product mix • Product life cycle • Introduction stage • Growth stage • Maturity stage • Decline stage • Product adoption process • Innovators • Early adopters • Early majority • Late majority • Laggards

38. Key Concepts (cont’d) • Brand • Brand name • Brand mark • Trademark • Trade name • Brand equity • Brand loyalty • Brand recognition • Brand preference • Brand insistence