Chapter 9:
Product, Branding,
and Packaging
Concepts
Pride/Ferrell
Foundations of Marketing
Fourth Edition
Prepared by Milton Pressley
University of New Orleans
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Objectives
6. Recognize the types of brands and how they are
selected and protected.
7. Identify two types of branding policies, and explain
brand extensions, 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 o labeling and selected
legal issues.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Decisions
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What Is a Product?
• A Product Defined
– A good, a service, or
an idea received in an
exchange
– Tangible or intangible
or a combination
• products vs services
– Functional, social, and
psychological utilities
or benefit
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What Is a Product?
What is a Product?
A product can be a service, and
idea, goods, or a combination
of these. The Houston Museum
of Natural Science provides a
service.
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Consumer Products
• Product purchased to satisfy personal and
family needs
- Consumer product categories:
Convenience products: inexpensive and frequently purchased
Shopping products: buyers willing to expend considerable effort
in planning and making the purchase
Specialty products: possess one or more unique characteristics
and buyers are willing to expend considerable effort to obtain them
Unsought products: purchased when a sudden problem must be
solved, customers are unaware of them and do not usually think of
purchasing them
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Classifying Products
Convenience Product and Shopping Product
An ice cream bar is a convenience product. Hotels are shopping
products.
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Business Products
• Products bought to use in an organization’s
operations, to resell, or to make other
products
–
–
–
–
Installations - facilities & non-portable equipment
Accessory equipment - not part of final product
Raw materials - natural materials part of product
Component parts - finished items ready for assembly or
need little processing
– Process materials -used in production but not identifiable
– MRO supplies -maintenance, repair, and
operating items not part of final product
– Services - intangible products in operations
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Product Line and Product Mix
• Product item
- a specific version of a product that can be designated as a
distinct offering among a firm’s products
• Product line
- a group of closely related product items viewed as a unit
because of marketing, technical or end-use considerations
• Product mix
- the total group of products that an organization makes
available to customers
• Width of product mix
- the number of product lines a company has
• Depth of product mix
- the average number of different product items offered in each
product line
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Concepts of Product Mix,
Width and Depth
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Product Line
Product Line and Product Mix
This Hilton ad shows a number
of Burberry’s product lines.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Four Stages of the Product Life Cycle
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Product Life Cycle: Introduction
• The initial stage of a product’s life cycle—its first
appearance in the marketplace—when sales start at zero
and profits are negative
• Risk of failure high
• Buyers must be made aware of:
– Features
– Uses
– Advantages
• Sellers lack
– Resources
– Technological knowledge
– Marketing know-how
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Life Cycle: Growth
• The stage of a product’s life cycle when
sales rise rapidly and profits reach a peak
and then start to decline
– More competitors enter the market
– Product pricing is aggressive
– Brand loyalty becomes important
– Gaps in market coverage are filled
– Promotion expenditures moderate
– Production efficiencies lower costs
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Life Cycle: Maturity
• The stage of a product’s life cycle
when the sales curve peaks and starts
to decline and profits continue to fall
– Intense competition
– Emphasis on improvements and differences in competitors’
products
– Weaker competitors lose interest and exit the market
– Advertising and dealer-oriented promotions predominate
– Distribution sometimes expands to the global market
• Strategic objectives for maturity stage
– Generate cash flow
– Maintain market share
– Increase share of customer
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Life Cycle: Decline
• The stage of a product’s life cycle when
sales fall rapidly
– Pruning items from the product line
– Cutting promotion expenditures
– Eliminating marginal distributors
– Planning to phase out the product
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Adoption Process
•
The five stages of the product adoption
process:
1. Awareness: buyer becomes aware of the product
2. Interest: the buyer seeks information and is
receptive to learning about the product
3. Evaluation: the buyer considers the product’s
benefits and decides whether to try it
4. Trial: the buyer examines, tests, or tries the product
to determine if it meets his or her needs
5. Adoption: the buyer purchases the product and can
be expected to use it again whenever the need for
this general type of product arises
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Adopter Categories
Consumers fall into one of five major categories:
• Innovators
- first adopters of new products
• Early adopters
- careful choosers of new products
• Early majority
- those adopting new products just before the average person
• Late majority
- skeptics who adopt new products when they feel it is necessary
• Laggards
- the last adopters who distrust new products
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution of Product Adopter
Categories
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Branding
• Brand–A name, term, design, symbol, or
other feature that identifies a seller’s
products and differentiates them from
competitors’ products.
– Corvette, Chevrolet, General Motors
• Brand Name–The part of a brand that
can be spoken, including letters, words,
and numbers
– Union 76, NBA, 49’ers
• Brand Mark–Part not made up of
words, such as a symbol or design
– Nike swoosh, Mercedes star,
McDonald’s arches
• Trademark–legal designation of
exclusive use of a brand
• Trade name–full legal name of
organization
Brand Mark
The red and white target is the brand mark
for Target stores.
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The Value of Branding
• To Buyers
– Helps speed consumer purchases by identifying
specific preferred products
– Provides a form of self-expression and status
– Evaluates product quality to reduce the risk of
purchase
• To Sellers
– Identifies and differentiates a firm’s products from
competing products
– Helps in the introduction of new products
– Facilitates the promotion of all same-brand
products
– Fosters the development of brand loyalty
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Brand Loyalty
• A customer’s favorable attitude toward a
specific brand.
– Recognition: aware brand exists and is
alternative if preferred brand unavailable
– Preference: preferred over competitive
offerings
– Insistence: strongly preferred, no
substitute
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Top Ten Most Valuable Brands
in the World
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Most Valuable Non-Profit Brands
Organization
Brand Value $
Million
YMCA of the USA
6,394
Salvation Army
4,703
United Way of America
4,517
American Red Cross
3.146
Goodwill Industries International
2,535
Catholic Charities USA
2.361
Habitat for Humanity International
1,768
American Cancer Society
1,360
The Arc of the United States
1,224
Boys & Girls Clubs of America
1,168
Source: http://www.coneinc.com/stuff/contentmgr/files/0/b2b4cb81b5be7de19ddfd5bb1c5e9711/files/cone_top_100_chart.pdf
(Accessed 9/14/2009)
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Types of Brands
• Manufacturer
– Brands initiated by producers
– Green Giant, IBM, Levis
• Private Distributor
– Brands initiated and owned by
resellers
– Sears’ Kenmore
• Generic
– Do not include the company name or
other identifying terms
– Aspirin
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Protecting a Brand
• Brands should be designed to that it can be
protected easily through registration
Protecting a Brand: Companies try to protect their brands by using
certain phrases and symbols in their advertisements. Note the term
“brand” after Ziploc, and the use of the ® symbol
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Selecting a Brand Name
• The 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 products in line.
– be designed for use and recognition in all
types of media.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Branding Policies, Extensions
and Co-Branding
• 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 Extensions
- using an existing brand to brand a new
product
• Co-Branding
- using two or more brands on one
product
Co-Branding
Lunchables is a co-branded item consisting of
Oscar Mayer and Kraft products.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Packaging
• Involves the development of a container and a graphic
design for a product
• Packaging Functions
–
–
–
–
Protect the product from damage
Offer convenience to consumers
Prevent waste and make storage easier
Promote the product by communicating its features, uses,
Convenience
Packaging
Some companies
compete by
designing
packages that are
convenient to use.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Packaging and Marketing
Strategy
•
•
•
•
•
•
Altering the Package
Secondary-Use Packaging
Category-Consistent Packaging
Innovative Packaging
Multiple Packaging
Handling-Improved Packaging
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Major Packaging Considerations
• Cost
• Tamper-resistant
• Design consistency
– Family Packaging
• Promotional Role
– Verbal and nonverbal symbols
– Size, shape, texture, color, and graphics
• Reseller Needs
• Environmentally responsible
• RFID
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Labeling
• Providing identifying, promotional, legal, or
other information on package labels
– Help identify the product
– Support promotional efforts for the
product
– Provide legally required labeling
information
– Provide information on
product origin
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Perceived Quality and Value of
Products Based on Country of Origin
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
After Reviewing This Chapter
You Should:
1. Understand the concept of a product and how
products are classified.
2. Be able to 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. Know how to describe the product adoption process.
5. Be able to explain the value of branding and the
major components of brand equity.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
After Reviewing This Chapter
You Should:
6. Recognize the types of brands and how they are
selected and protected.
7. Be able to identify two types of branding policies,
and to explain brand extensions, co-branding, and
brand licensing.
8. Know the major packaging functions and design
considerations and how packaging is used in
marketing strategies.
9. Understand the functions o labeling and selected
legal issues.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Key Concepts
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Good
Service
Idea
Consumer products
Business products
Convenience products
Shopping products
Specialty products
Unsought products
Installations
Accessory equipment
Raw materials
Component parts
Process materials
MRO supplies
Business services
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Product item
Product line
Product mix
Width of product mix
Depth of product mix
Product life cycle
Introduction stage
Growth stage
Maturity stage
Decline stage
Product adoption process
Innovators
Early adopters
Early majority
Late majority
Laggards
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Key Concepts (cont’d)
•
•
•
•
•
•
•
•
•
•
Brand
Brand name
Brand mark
Trademark
Trade name
Brand equity
Brand loyalty
Brand recognition
Brand preference
Brand insistence
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.