Copyright John Wiley & Sons 2007 Presentation prepared by Robin Roberts, Griffith University and...

Copyright John Wiley & Sons 2007

Presentation prepared by Robin Roberts, Griffith University and Mike Spark, Swinburne University of Technology

Copyright John Wiley & Sons 2007

Chapter 8 Product branding and

packaging concepts

Chapter 8 Copyright John Wiley & Sons 2007

Chapter Objectives

1. Understand the concept of a product and how products are classified

2. Explain the concepts of product item, product line and product mix, and understand how they are connected

3. Understand the product life cycle and its impact on marketing strategies

4. Describe the product adoption process

5. Explain the value of branding and the major components of brand equity


Chapter Objectives

6. Recognise the types of brands and how they are selected and protected

7. Identify three types of branding policies and explain co-branding and brand licensing

8. Describe the major packaging functions and design considerations and how packaging is used in marketing strategies

9. Understand the functions of labelling and selected legal issues


What is a product?A product is a good, a service, or an idea

received in an exchange• It can be tangible (a good) or intangible (a

service or an idea) or a combination of both

• It can include functional, social, and psychological utilities or benefits

• It also includes supporting services, such as installation, guarantees, product information and repairs and maintenance


Product augmentation

Products consist of many elements thatprovide buyers with value:

– Core (or generic) product – the content that is the basis for the purchase

– Expected product – the buyer’s most basic expectations

– Augmented product – a bundle of benefits that the buyer may not expect, and which differentiates the market offering from its competitors

The potential product may also be considered.


What are the three product layers for Lexus GS?

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Classifying products

Products fall into one of 2 categories:

Consumer Products– Products purchased to satisfy personal

and family needs

Business Products– Products bought to use in an

organisation’s operations, to resell, or to make other products (raw materials and components)


Consumer products

There are 4 traditional categories of

Consumer Products:

1. Convenience products

2. Shopping products

3. Specialty products

4. Unsought products


Consumer products (cont’d)

Convenience ProductsRelatively inexpensive, frequently purchaseditems for which buyers exert minimalpurchasing effort

– Characteristics:• Marketed through many retail outlets• Relatively low per-unit gross margins• Packaging has a major role



Shopping ProductsItems for which buyers are willing to expendconsiderable effort in planning and makingpurchases

– Characteristics:• Expected to last a long time; less

frequently purchased• Require fewer retail outlets• Inventory turnover is lower, and gross

margins are higher


Consumer products (cont’d)Specialty ProductsItems with unique characteristics that buyersare willing to expend considerable effort toobtain

– Characteristics:• Pre-selected by the consumer, and no

close substitutes or alternatives• Available in a limited number of outlets• Purchased infrequently • Have high gross margins, low turnover



Unsought ProductsProducts purchased to solve a suddenproblem, products of which the customers areunaware, and products that people do notnecessarily think about buying

– Characteristics:• Speed and problem resolution are far

more important than price • Generally no consideration of

substitutes or alternatives


Business products

Business products can be classified into 7 categories according to theircharacteristics and intended uses —

1. Installations2. Accessory equipment3. Raw materials4. Component parts5. Process materials6. MRO supplies7. Business services


Product line and product mixFollowing concepts help describe the

relationships among an organisation’s products:

Product Item– A specific version of a product that can be

designated as a distinct offering among an organisation’s products

Product Line– A group of closely related product items

viewed as a unit because of marketing, technical, or end-use considerations


Product line and product mix (cont’d)

Product Mix– The composite or total group of products

that an organisation makes available to customers

Width of Product Mix– The number of product lines a company

offers

Depth of Product Mix– The average number of different products

offered in each product line


Product life cycle


The product life cycle (cont’d)

Introduction — the initial stage of a product’s

life cycle = its first appearance in the

marketplace

Growth — the second stage of a product’s life

cycle where sales rise rapidly and profits

reach a peak and then start to decline


The introduction and growth phases of the product life cycle

New Water

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The product life cycle (cont’d)

Maturity — the third stage of a product’s life

cycle where the sales curve peaks and

starts to decline and profits continue to fall

Decline — the fourth stage of a product’s life

cycle where sales fall rapidly or taper off


Product adoption process

Customers who eventually accept a

new product do so through an adoption

process which has 5 stages:

1. Awareness

2. Interest

3. Evaluation

4. Trial

5. Adoption


Product adoption process (cont’d)

Marketers should be aware that there are

5 key factors that influence the rate at

which consumers adopt new products:

1. Relative advantage

2. Compatibility

3. Complexity

4. Divisibility

5. Communicability


Product adoption process (cont’d)

Categories of Product Adopters:– Innovators — First adopters of new

products– Early adopters — Careful choosers of new

products, often opinion leaders– Early majority — Those adopting new

products just prior to the average person.– Late majority — Skeptics who adopt from

economic necessity or social pressure– Laggards — The last adopters


Branding

Marketers must make many decisions aboutproducts, especially related to brandingBrand

– A name, term, design or symbol that identifies one seller’s product from those of other sellers

– It may identify one item, a family of items, or all items of a seller

Brand Name– The part of a brand that can be spoken– Includes words, letters, numbers


Branding (cont’d)

Brand Mark– The part of a brand not made up of words– Often symbols or designs

Trademark– A legal designation indicating the owner

has exclusive use of a brand

Trade Name– Full and legal name of an organisation


The value of branding

Value of branding for consumers:– helps speed consumer purchases by

identifying specific preferred products– form of self-expression and status– denotes product quality

Value of branding for marketers:– Identifies and differentiates a firm’s products

from competing products– Helps introduce new products– Facilitates promotion of same-brand products


Major elements of brand equity


Branding (cont’d)

Brand Equity– The marketing and financial value

associated with a brand’s strength in a market

Brand Loyalty– A customer’s favourable attitude toward a

specific brandBrand Recognition

– A customer’s awareness that a brand exists and is an alternative purchase


Branding (cont’d)

Brand Preference– The stronger degree of brand loyalty in

which a customer prefers one brand over competitive offerings

Brand Insistence– The degree of brand loyalty in which a

customer strongly prefers a specific brand and will accept no substitute, and is willing to spend effort to purchase the required brand


Types of brands

Manufacturer Brands– Brands initiated by producers

Private Distributor Brands– Brands initiated and owned by resellers

(also known as dealer brands, private brands or store brands)

Generic Brands– Brands indicating only product category– Usually sold at lower prices than branded

items


Selecting a brand name

A brand 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 the products in

the product line


Protecting a brand

The brand should be designed so that it can be protected easily

• Surnames and common feature names are difficult to protect

• Check that the name is not on the Trademarks Register

• Don’t allow your name to become ‘generic’ by overuse

• Use the symbol TM on your product and all advertising


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-Extension Branding– Using an existing brand name for an

improved or new product


Co-branding

Co-branding is the use of two or more brands

on one product

• The aim is to capitalise on the brand equity (the customer’s confidence and trust) of multiple brands

• Brands involved must represent a complementary fit in the minds of consumers

• Brands should not lose their individual identities


Packaging

Packaging involves the development of a

container and a graphic design for a product

• Packaging Functions:– Protect the product from

damage– Maintain its functional form– Convenience – Prevent waste – Easy storage


Packaging and marketing strategy

Altering the Package

– update style, meet increased competition

Secondary-Use Packaging

– Reusable packaging adds customer value

Category-Consistent Packaging

– Packaging reflects customer expectations

Innovative Packaging

– Unique features

Multiple Packaging

Handling-Improved Packaging


Labeling

Providing identifying, promotional, legal orother information on package labelsPurposes of labels:

– Help identify the product, display brand name and any unique graphics

– Support promotional efforts for the product

– Provide legally required labeling information - ANZFSC

– Provide information on product origini.e. ‘Made in Australia’


Should product labelling be part of the marketing message? What are

the ethical considerations?

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Copyright John Wiley & Sons 2007 Presentation prepared by Robin Roberts, Griffith University and...

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