Part 5

chapter 10
Product, Branding, and Packaging Concepts
What is a Product?
A Product is anything that can be offered to a
market for attention, acquisition, use, or
consumption and that might satisfy a want or
need.
 Includes:
 Physical Objects
 Services
 Events
 Persons
 Places
 Organizations
 Ideas
 Combinations of the above 2
What is a Service?

A Service is a form of product that consist

of activities, benefits, or satisfactions
offered for sale that are essentially
intangible and do not result in the
ownership of anything.
 Examples include:
 Banking
 Hotels
 TaxPreparation
3
 Home Repair Services

What is an idea?
 An idea is a concept, philosophy, image, or
issue. Ideas provide the psychological
stimulation that aids in solving problems or
adjusting the environment.
 Example :

 Mothers Against Drunk Driving (MADD)

The total product
 Product Classifications
Consumer Products
Convenience Products Shopping Products

ØBuy frequently & immediately ØBuy less frequently
ØLow priced ØHigher price
ØMass advertising ØFewer purchase locations
ØMany retail outlets ØComparison shop (prices, qualities, 
ØSelf service basis (packaging is important) warranties, features)
i.e Candy, newspapers i.e Clothing, cars, appliances, 
cameras, shoes.
Specialty Products Unsought Products

ØSpecial purchase efforts ØNew innovations
ØHigh price ØProducts consumers don’t 
ØUnique characteristics want to think about 
ØBrand identification ØRequire much advertising &
ØFew purchase locations personal selling
i.e Lamborghini, Rolex i.e Life insurance, blood donation, natural 
catastrophe 6
Business products
 Purchased on the basis of the an organization’s goals
and objectives
 Functional aspects are more important than
psychological rewards
 There are seven classifications:
1. Installations (expensive, time consuming, involve
investment of capital)
2. Accessory equipment (cheaper, treated as expense
item)
3. Raw materials(are bought and sold according
4. Component parts (identified)
5. Process materials (not identifiable)
6. MRO supplies (not part of the finished product, facilitate
production)
7. Business services (financial services, legal, marketing
research)
8.
Product line and product mix
 Product item; A specific product of an
organization’s overall products. I.e., Chunky
White Kit-Kat.
 Product line; A group of similar products in a
certain product category. I.e., shampoo
product line, product line, etc..
 Product mix; Total or group of products
available in an organization, consisting of
width and depth.
1.Width; Is the number of product lines a
company offer.
2.Depth; Is the average number of product
items that exist in a product line.
Product Life Cycle

Sales and
Sales
Profits ($)

Profits

Time
Product Introduction Growth Maturity Decline
Develop­
ment
Losses/
Investments ($)
9
Sales and Profits Over the Product’s Life From Inception to Demise
Introduction Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

Sale
Saless Lo
Low sale
w sales    
s    
Co
Costs
sts Hig
High c
h coost pe
st per c
r custo
ustome
merr
Pro
Profits
fits Ne
Neggative
ative o
 or lo
r loww
Marke
Marketing 
ting  Cre
Create
ate pro
 produc
duct aware
t awareneness and 
ss and 
Obje
Objecctive
tivess trial
trial
Pro
Produc
ductt Offe
Offer a basic
r a basic pro
 produc
ductt
Pric
Pricee Usually is high; use
Usually is high; use c
 coost­plus 
st­plus 
fo
formula
rmula
Distributio
Distributionn High distributio
High distribution expe
n expense
nsess
10
Adve
Advertising
rtising Build pro
Build produc
duct aware
t awarene
ness amo
ss among ng 
eearly ado
arly adopte
pters and de
rs and deale
alers
rs
Growth Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

Sale
Saless Rapidly rising sale
Rapidly rising sales    
s    
Co
Costs
sts Lo
Lowe
wer c
r coosts due
sts due to
 to e
 eccoono
nomie
mies o
s of f 
sc
scale
ale
Pro
Profits
fits Rising pro
Rising profits, the
fits, then de
n deccline
line
Marke
Marketing
ting   Maximize
Maximize marke
 market share
t share
Obje
Objecctive
tivess
Pro
Produc
ductt Offe
Offer ne
r new pro
w produc
duct fe
t feature
atures, 
s, 
exte
extensio
nsions, se
ns, servic
rvicee, and warranty
, and warranty
Pric
Pricee Pric
Pricee re
 reduc
ductio
tions to
ns to pe pene
netrate
trate  
marke
markett
Distributio
Distributionn Inc
Incre
rease
ase numbe
 number o r of distributio
f distribution  n  11
ooutle
utlets
ts
Adve
Advertising
rtising Build aware
Build aware ne ss and intere
ne ss and inte rest in 
st in 
the
the mass marke
 mass markett
Maturity Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

Sale
Saless Pe
Peak sale
ak saless
Co
Costs
sts Lo
Low c
w coost pe
st per c
r custo
ustome
merr
Pro
Profits
fits
Co
Continue
ntinue to
 to fall
 fall
Marke
Marketing 
ting  De
De fe nd marke t share thro
fe nd marke t share  through 
ugh 
Obje
Objecctive
tivess pro
produc
duct impro
t improveveme
ments 
nts 
Pro
Produc
ductt Dive
Diversify brand and mo
rsify brand and mode dels
ls
Pric
Pricee Pric
Pricee to
 to matc
 match with be
h with best 
st 
ccoompe
mpetitotitors
rs
Distributio
Distributionn Build mo
Build mo re  intensive
re  inte nsive(glo
(global) 
bal)  12
distributio
distributionn
Adve
Advertising
rtising Stre
Stress brand diffe
ss brand differe renc
ncees and 
s and 
be
bene
nefits
fits
Maturity Stage of the PLC

Modifiying the Market

                                                                 
Co mpany trie s to  inc re ase  
c o nsumptio n o f the  c urre nt pro duc t. 
Maintaining share  o f marke t
Modifying the Product

Changing c harac te ristic s suc h as 

quality, fe ature s, o r style s to  attrac t 
ne w use rs.
Modifying the Mar keting Mix
 
Co mpany trie s to  impro ve  sale s by 
c hanging o ne  o r mo re  marke ting mix  13

e le me nts. Mainly pric e  and pro mo tio n

Decline Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

Sale
Saless De
Decclining sale
lining saless
Co
Costs
sts Lo
Low c
w coost pe
st per c
r custo
ustome
merr
Pro
Profits
fits De
Decclining pro
lining profits
fits
Marke
Marketing
ting   Reduce expenditure and maintain, 
Reduce expenditure and maintain, 
Obje
Objecctive
tivess reposition, harvest or drop the product
reposition, harvest or drop the product
Pro
Produc
ductt Phase out weak items
Phase out weak items
Pric
Pricee Cut price
Cut price
Distribution
Distribution Go selective: phase out unprofitable 
Go selective: phase out unprofitable 
14
outlets
outlets
Advertising
Advertising Reduce to level needed to retain 
Reduce to level needed to retain 
hard­core loyal customers 
hard­core loyal customers 
Product adoption process
Customers who eventually accept a new


product do so through an adoption process,

which are:
1.Awareness
2.Interest
3.Evaluation
4.Trial
5.Adoption
Figure 7.2 Innovation Diffusion Theory
(Luftman, 2004, p182)
Branding
 Brand; The whole lot of benefits given by a
product.
Example: P&G

 Brand name; Used to differentiate product

items.
Example: Tide

 Brand mark.
Example: Nike sign

 Trademark.

 Trade name. Patency rights

Example: Ford Motor Company


VALUE OF BRANDING
Value is to both buyers and sellers.
 Buyers benefits are as follows:
1. Brand names tell the buyer something about

product quality. Buyers who always buy the same

brand know that they will get the same quality
each time they buy.
2. Brand names also increase the shopper's

efficiency. Imagine a buyer going into a

supermarket and finding thousands of generic
products.
3. Brand names help call consumers' attention to

new products that might benefit them. The brand

name becomes the basis upon which a whole story
can be built about the new product's special
qualities
VALUE OF BRANDING
 Sellers benefits are as follows:
1. The brand name makes it easier for the supplier

to process orders and track down problems.

2. The supplier's brand name and trademark provide

legal protection for unique production features that

otherwise might be copied by competitors.
3. Branding enables the supplier to attract a loyal

and profitable set of customers.

4. Branding helps the supplier to segment markets.

For example, Cadbury can offer Daily Milk, Milk

Tray, Roses, Flake, Fruit and Nut and many other
brands, not just one general confectionery product
for all consumers.
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Branding
This Land-O-Lakes ad shows the depth of the brand.
Brand equity
 There are three degrees of brand loyalty;
1.Brand recognition
2.Brand preference
3.Brand insistence
 Brand awareness contribute to brand
familiarity, a familiar brand is likely to be in
a consideration set
 Brand associations are dimensions such as
lifestyle, personality type
 Perceived high brand quality helps to support
a premium price

Types of brands
 Manufacturer brands
 Private distributor brands

 Generic brands


Selecting brand names
 Characteristics of brand names:
1.Easy to say, spell, and recall
2.Should indicate product benefits. Example, Vanish
3.Brand should be distinctive
4.Designed to be recognizable in all types of media
 Who creates them?

1.Internally through brainstorming

2.Committees for brand creation and approval
3.Special department for developing brand names in
large companies
4.Outsource
5.
6.
Protecting a brand
 Types of brands are fanciful, arbitrary,
suggestive, descriptive, generic
 Most protectable are the descriptive and the
suggestive
 Least protectable or even not protectable are
the generic brand names.
 Companies should try to protect their brands
from counterfeited products. Examples, GM
parts, Cartier watches, Louis Vuitton
handbags
BRANDING POLICIES
 If the company has homogeneous products it
will be hard to brand them if not at all
 In case of the branding decision, the company
may use individual branding, family
branding
 Individual branding is a policy used for
heterogeneous products that needs to be
differentiated (facilitates market
segmentation)
 Family branding is a policy used for branding
all product items under one product line.
Example, Kelloggs



Factors that affect the branding policy
decision
 Influenced by the number of products and
product lines
 Characteristics of its target market

 The number and types of competing products

available
 The size of the company’s resources
Brand extensions
Is when a company introduces a new product


item under a product line that is existing.



What might be some advantages and



disadvantages of such a strategy?

CO-BRANDING.
 Co-branding occurs when two established
brand names of different companies are
used on the same product.
 For example, Kellogg's joined forces with
ConAgra to co-brand Kellogg's Healthy
Choice cereals
 Benefits of co-branding

1.Co-branding allows companies to enter new

markets with minimal risk or investment
2.The combined brands create broader
consumer appeal and greater brand equity
3.
Brand licensing
 An agreement in which a company permits
another organization to use its brand on other
products for a licensing fee.
 Licensor has the right to a royalty fee
 Royalty fee could be low as 2 percent or higher
than 10 percent.
 The licensee is responsible for all manufacturing,
selling, and advertising functions
 The licensee bears the cost if the product fails
 Main advantages are extra revenues, free
publicity, trademark protection
 Main disadvantages are a lack of manufacturing
control and bombarding consumers with too
many unrelated products bearing the same
name
 This business-to-business ad offers to provide
ecologically sound packaging.

Besides its impact on the

environment, what aspects
of packaging can
help/hinder product sales?

How have these products

become known by their
packaging:
•Cracker Jacks?
•Capri Sun?

Packaging
 Activityof designing and
producing the container or
wrapper for a product.
 Packaging used to just contain
and protect the product.
 Packing now has promotional
value and marketers should:
 Establish a packaging concept,
 Develop specific elements of
the package,
 Tie together elements to
support the positioning 30
and
marketing strategy.