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11-1
CHAPTER
PRODUCT, BRANDING, AND PACKAGING DECISIONS
11
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
11-2
L E A R N I N G O B J E C T I V E S
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
Red Bull
Jay Nemeth/ZUMA Press/Newscom
11-4
Complexity of Products
Michael Blann/Digital Vision/Getty Images
11-5
Types of Products
Specialty Shopping
Convenience Unsought
11-6
CHECK YOURSELF
1. Explain the three components of a product.
2. What are the four types of consumer products?
11-7
Product Mix and Product Line Decisions
Source: Kellogg’s 2010 annual report, http://annualreport2010.kelloggcompany.com/innovation.htm.
Abbreviated List of BMW Product Mix
Product Lines
BMW MINI Rolls-Royce Motorrad
2 Series3 Series4 Series5 Series6 Series7 SeriesX SeriesZ4 SeriesM SeriesBMW iHybrid
ClubmanConvertibleCountrymanCoupeHardtopJohn Cooper WorksPacemanRoadster
GhostPhantomWraith
C SeriesF SeriesG SeriesK SeriesR SeriesS Series
11-8
Product Mix and Product Line Decisions
Breadth
• Number of product lines
Depth
• Number of categories within a product line
Courtesy Pepsi Cola Company
11-9
Change Product Mix Depth
Increase Depth Band-Aid now has
over 40 products to heal cuts.
Decrease Depth McCormick spices
eliminates dozens of products each year.
©M Hruby
11-10
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
11-11
Product Line Decisions
How is this changing the product mix?
Does it increase breadth or depth?
Is this research or advertising?
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11-12
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?
11-13
A brand can use: Name, logo symbols, characters, slogans, jingles and even distinctive packages.
Branding
http://www.youtube.com/watch?v=aNddW2xmZp8
11-14
What Makes a Brand?
BrandingBrand name
URLs
www.eBay.com
Logos and symbols
Characters
Slogans
Jingles/Sounds
“Law & Order”
McG
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©M. Hruby.
11-15
Value of Branding for the Customer
Facilitate Purchasing
Establish Loyalty
Protect from Competition
Are Assets
Impact Market Value
Apple wins in the Apple vs Samsung patent lawsuit
11-16
Brand History in Advertising
11-17
Brand Equity: Brand Awareness
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.
11-18
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
11-19
Brand Equity: Brand Associations
Vince Talotta/Toronto Star/Getty Images
11-20
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
11-21
CHECK YOURSELF
1. How do brands create value for the customer and the firm?
2. What are the components of brand equity?
11-22
Brand Ownership
Manufacturer brands or
national brands
Private-label brands or Store Brands•Premium•Generic•Copycat•Exclusive co-branded
11-23
Brand Ownership
Private Label
McGraw-Hill Companies
11-24
Brand Ownership
Who Owns the Brand?
Manufacturer/National Brand Retailer/Store Brand
Common Nameor Not?
Family Brands
Kellogg’s family line Kroger’s line
Individual Brands
Kellogg’s individual brand Kroger’s individual brand
All photos: ©M. Hruby.
11-25
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.
11-27
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?
11-28ZitePersonalized
Magazine
Co-branding
©M Hruby
11-29
Brand Licensing
Photo by D. larke Evans/NBAE via Getty Images.
11-30
Brand Repositioning
How is this repositioning?
Courtesy The Procter & Gamble Company
11-31
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?
11-32
Packaging
What other packaging do you as a consumer find useful?
©M. Hruby.
11-33
Product Labeling
©The McGraw-Hill Companies, Inc/Elite Images
C Sherburne/PhotoLink/Getty Images