basic chap011
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11-1© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
C H A P T E R
Product, Branding,
and Packaging Decisions
11
McGraw-Hill/Irwin Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved.
11-2
L E A R N I N G O B J E C T I V E S
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Describe the components of a product.
Identify the types of consumer products.
Explain the difference between a product mix’s breath and a product line’s depth,
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.
Product, Branding, and Packaging Decisions
LO1
LO2
LO3
LO4
LO5
LO6
LO7
LO8
11-3© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Types of Products
Specialty Shopping
Convenience Unsought
11-4© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
CHECK YOURSELF
1. Explain the three components of a product.
2. What are the four types of consumer products?
11-5© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Product Mix and Product Line Decisions
Breadth
• Number of product lines
Depth
• Number of categories within a product line
Courtesy Pepsi Cola Company
11-6© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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?
11-7© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
What Makes a Brand?
BrandingBrand name
URLs
www.eBay.com
Logos and symbols
Characters
Slogans
Jingles/Sounds
“Law & Order”
McG
raw
-Hill
C
ompa
nies
, In
c.
©M. Hruby.
11-8© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Value of Branding for the Customer
Facilitate Purchasing
Establish Loyalty
Protect from Competition
Reduce Marketing Costs
Are Assets
Impact Market Value
11-9© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand Equity: Brand Awareness
Source: http://www.interbrand.com/best_global_brands.aspx
11-10© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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
11-11© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand Equity: Brand Associations
©McGraw-Hill Companies Inc/Gary He, photographer
11-12© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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
11-13© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
1. How do brands create value for the customer and the firm?
2. What are the components of brand equity?
CHECK YOURSELF
11-14© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand Ownership
Manufacturer brands or national brands
Private-label brands or Store Brands• Premium• Generic• Copycat• Exclusive co-branded
11-15© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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.
11-16© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand Extension
State Farm Website
©M Hruby
11-17© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand Dilution
Evaluate the fit betweenthe product classof the core brand
and the extension.
Evaluate consumer perceptions of the
attributes of the core brand and 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?
11-18© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Zite: Personalized Magazine
Co-branding
©M Hruby
11-19© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand Licensing
Photo by D. larke Evans/NBAE via Getty Images.
11-20© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand Repositioning
How is this repositioning?
Courtesy The Procter & Gamble Company
11-21© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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?
11-22© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Packaging
What other packaging do you as a consumer find useful?
©M. Hruby.
11-23© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Product Labeling
©The McGraw-Hill Companies, Inc/Elite Images
C Sherburne/PhotoLink/Getty Images
11-24
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A brand association reflects the mental links that consumers make between a brand and its key product attributes, such as a logo, slogan, or famous personality.
Glossary
11-25
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold.
Glossary
11-26
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.
Glossary
11-27
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A brand extension refers to the use of the same brand name for new products being introduced to the same or new markets.
Glossary
11-28
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand licensing is a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee.
Glossary
11-29
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand loyalty occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buy from multiple suppliers within the same category.
Glossary
11-30
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Brand repositioning or rebranding refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences.
Glossary
11-31
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Co-branding is the practice of marketing two or more brands together, on the same package or promotion.
Glossary
11-32
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Perceived value of a brand is the relationship between a product or service’s benefits and its cost.
Glossary
11-33
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Product assortment or product mix is the complete set of all products offered by a firm.
Glossary
11-34
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Product lines are groups of associated items, such as items that consumers use together or think of as part of a group of similar products.
Glossary
11-35
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Product mix or product assortment is the complete set of all products offered by a firm.
Glossary