Branding, Packaging and Labeling

Topics

• Branding– Importance– Types– Strategies

• Packaging– Function– Issues

• Labeling

Branding

• Brand– Name, term, design, or symbol that identifies a

business and its products

• Corporate brands– Identify the business and reflect image across all

products– Coca-Cola, Daimler-Chrysler

• Product brands– Among most important assets and powerful selling

elements– Coke, Dodge

Brands

• Brand Name– Words, letter numbers the represent brand– Corvette, Airwalk, FedEx

• Brand Mark– Logo or symbol

• Trade Name– Legal name a company uses to conduct

business– Dell, Xerox

Brands

• Trade Character– Brand mark as a character with human

qualities– Keebler, Doughboy

• Trademark– Any combination of these that is legally

protected– Have been expanding to include sound, color,

smell• Harley trademarked its engine sound

Importance of Branding

• Builds customer loyalty– Customers pay more for recognized names

• Assures customer of quality & reduces risk of dissatisfaction

• Assists in extending lines– Customers more willing to try familiar names

Generating Brands

• Estimated that 75% of companies introduce a new product brand annually

• In 1999, 79,000 trademarks were registered

• Global brands often consolidate names– Confusion can result from multiple names for

the same product• In UK, 3 Musketeers is known as Mars Bar

Types of Brands

• Manufacturer Brands– Producer brands, owned by manufacturer– Gives impression of standard quality,

performance & status– Most brands are manufacturer brands

• 65% of appliances• 70% of food• 80% of gas• 100% of cars

Types of Brands

• Private distributor brands– Store or dealer brands, owned by retail stores– Item is purchased to be sold exclusively at

certain stores, i.e. Radio Shack brand– Manufacturer name is not displayed– Higher returns for store– Builds retailer loyalty

• Craftsman, Kenmore sold only at Sears

Types of Brands

• Generic Brands– Carry no company name, just product

description– Sold much cheaper, 30 – 50% lower than

manufacturer brands, and 10 – 15% lower than store brands

– Jewel supermarkets in Chicago were the first to offer

Branding Strategies

• Brand extension– Uses existing brand name to promote new

products– Dilution may become a problem

• Brand Licensing– Allow other companies to use trademarks for

a fee, plus royalties on sales– Enhances image & helps sales of core

products

Branding Strategies

• Mixed branding– Offer combination of manufacturer, store &

generic brands– Manufacturer will sell under a national brand,

then sell extra to a store to be repackaged under a store brand, then make a generic

– Maximizes profit by appealing to all segments

Branding Strategies

• Co-Branding– Uses two or more brands to increase loyalty

and sales for individual brands– Builds recognition for each, work best if

product complement each other• Starbucks in Barnes & Nobles• Smuckers jelly in Pop-Tarts

Packaging

• Physical container or wrapping– Approximately 10% of retail price is spent on

package– In some cases, package is most expensive

part of production

Function of Packaging

• Key selling tool• Promoting & selling

– Reaction to packaging is important to overall success or failure

– New designs may not replace old, but complement it

• Pump soap containers

• Defining product identity– Invoke prestige, convenience, status, etc.

Function of Packaging

• Provide information– Directions on how to use, warnings,

ingredients

• Meet customer needs– Various sizes for different market segments– Must adapt to meet changing lifestyles

Function of Packaging

• Ensure safe use– Tamper resistance, child proofing– Blisterpacks, molded plastic with foil or

cardboard backing• Gums and some medicine

• Protection– Shipping, storage, display– Prevent shoplifting, breakage & spills

Contemporary Issues

• Changing social and political atmosphere leads to changes in product & package– Environmental packaging

• Surveys indicate consumers will pay more for these packages

– Cause packaging• Promoting unrelated issues on package, usually

socially or politically motivated– Ben & Jerry’s, Body Shop

Labeling

• Informational tag, wrapper, seal or imprinted message

• Main function is to inform about contents and give directions

• Protects company from liability & lawsuits

Labels

• Brand label– Gives name, logo & trademark

• Descriptive label– Gives information about use, construction,

care, performance, etc.• Does not contain all the information that a

consumer might want

• Grade label– Give product quality

Labels

• Food labels must contain weight, dating and storage information, UPC, etc.– Net weight is entire product minus the weight

of package and packing materials– Dating options are

• Date packed• Sell by date – last day it should be sold• Best if – last day for best quality• Expiration – should not be used after

Labeling Laws

• Public outcry has lead to regulations on what needs to be incorporated on labels

• Fair Packaging & Labeling Act (FPLA) gives the FDA and FTC authority over labeling

• Not all countries have the same label laws– Coke was pulled off Italian shelves because

they would not list the “secret ingredient”

Labeling Laws

• FDA– Enacted a law to require labels to give

information on how the product fits into a daily diet

– Developed definitions for light, free, low, reduced and good source

– Warning labels on cigarettes and alcohol– Developing regulations for genetically

modified foods

Labeling Laws

• FTC– Responsible for ensuring labels are not

deceptive– Released guidelines for environmental claims

• Requires proof for all claims