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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.

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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

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Red Bull

Jay Nemeth/ZUMA Press/Newscom

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Complexity of Products

Michael Blann/Digital Vision/Getty Images

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Types of Products

Specialty Shopping

Convenience Unsought

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CHECK YOURSELF

1. Explain the three components of a product.

2. What are the four types of consumer products?

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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

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Product Mix and Product Line Decisions

Breadth

• Number of product lines

Depth

• Number of categories within a product line

Courtesy Pepsi Cola Company

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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

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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

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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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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?

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A brand can use: Name, logo symbols, characters, slogans, jingles and even distinctive packages.

Branding

http://www.youtube.com/watch?v=aNddW2xmZp8

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What Makes a Brand?

BrandingBrand name

URLs

www.eBay.com

Logos and symbols

Characters

Slogans

Jingles/Sounds

“Law & Order”

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©M. Hruby.

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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

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Brand History in Advertising

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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.

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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

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Brand Equity: Brand Associations

Vince Talotta/Toronto Star/Getty Images

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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

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CHECK YOURSELF

1. How do brands create value for the customer and the firm?

2. What are the components of brand equity?

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Brand Ownership

Manufacturer brands or

national brands

Private-label brands or Store Brands•Premium•Generic•Copycat•Exclusive co-branded

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Brand Ownership

Private Label

McGraw-Hill Companies

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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.

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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.

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Brand Extension

State Farm

©M Hruby

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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

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Brand Licensing

Photo by D. larke Evans/NBAE via Getty Images.

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Brand Repositioning

How is this repositioning?

Courtesy The Procter & Gamble Company

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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?

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Packaging

What other packaging do you as a consumer find useful?

©M. Hruby.

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Product Labeling

©The McGraw-Hill Companies, Inc/Elite Images

C Sherburne/PhotoLink/Getty Images