Branding and Packaging: Part Five Product Decisions

Part Five
Product Decisions
13
Branding and Packaging
Objectives
1. To explain the value of branding

2. To understand brand loyalty
3. To analyze the major components of brand
equity
4. To recognize the types of brands and their
benefits
5. To understand how to select and protect
brands
6. To examine three types of branding policies
Copyright © Houghton Mifflin Company. All rights reserved. 13 | 2

Objectives (cont’d)
7. To understand co-branding and brand

licensing
8. To describe the major packaging functions
and design considerations and how
packaging is used in marketing strategies
9. To examine the functions of labeling and
describe some legal issues pertaining to
labeling

Chapter Outline
• Branding
• Packaging
• Labeling

Branding: Key Terms
• Brand
– An identifying name, term, design, or symbol
– One item, family of items, or all items of a seller
• Corvette, Chevrolet, General Motors
• Brand Name
– The part of a brand that can be spoken
– Words, letters, numbers
• Union 76, NBA, 49’ers
• Brand Mark
– The part of a brand not made up of words
– Symbols or designs
• Nike swoosh, Mercedes star, McDonald’s arches

Branding: Key Terms (cont’d)
• Trademark
– A legal designation of exclusive use of a
brand
• Coca-Cola®, Hewlett-Packard®
• Trade Name
– Full legal name of
an organization
• American Telephone
and Telegraph Corporation
(AT&T)

Value of Branding
• For Consumers
– 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

Value of Branding (cont’d)
• For Marketers
– 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
– Can create valuable intangible assets

Has the Silk Brand Name Helped This
Brand Achieve an 80% Market Share?
Soy Milk Market Share

(conventional grocery-store sales)
White Wave’s Silk 80%
General Mills’ 8th Continent 12%
All others (including Eden Soy

and Imagine Foods’ Soy 8%
Dream)
Source: General Mills; Information Resources; White Wave; as reported in Business 2.0, April 2004, p.74.

Brand Loyalty: Key Terms
• Brand Loyalty
– A customer’s favorable attitude toward a
specific brand
• Brand Recognition
– A customer’s awareness that a brand
exists and is an alternative purchase

Brand Loyalty: Key Terms (cont’d)
• Brand Preference
– The 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

Persons Who Try to Stick With
Well-Known Brand Names
How has
loyalty
toward well-
known
brands
changed
over the last
quarter of the
twentieth
century?
Source: “Like Glue,” American Demographics, The Marketing Tools Directory, 2002, p. D46. Adapted with permission.

Major Elements of Brand Equity
Source: Adapted with the permission of The Free Press, a division of Simon & Schuster Adult Publishing Group, from Managing Brand
Equity: Capitalizing on the Value of a Brand Name by David A. Aaker. Copyright © 1991 by David A. Aaker.
FIGURE 13.1

Putting Your Brand Name on a Stadium:
What Are the Benefits and the Costs?
Naming Company Field and Amount Paid Filed for New Name
Location (in millions) Bankruptcy
Adelphia Adelphia The

Communications Coliseum $30 Coliseum
2002
Nashville, TN (over 15 years)
ANC Rental National Car Office

Rental Center $25 Depot
2001
Sunrise, FL (over 10 years) Center
Enron Enron Field Minute

Houston, TX $100 Maid Park
2001
(over 30 years)
PSINet PSINet Stadium M&T Bank

Baltimore, MD $105.5 Stadium
2001
(over 20 years)
TWA Trans World Edward

Dome St. Louis, $26 Jones
2001
MO (over 20 years) Dome
Source: “The Ones That Whiffed,” Buiness 2.0, April 2004, p. 83.

Can You Name the Brands Associated
With These Trade Characters?
Charlie the Tuna- © Heinz North America.; Trump the Monster- Courtesy of Monster.com; Used with permission. Courtesy of PILLSBURY and the Pillsbury Company.
TONY THE TIGER® and SNAP CRACKLE & POP® are registered trademarks of Kellogg Company. All rights reserved. © 2002 Kellogg Company.

Why Is Morton Salt Using Its Trade
Character on the Package and in This Ad?
Reprinted with permission of Morton Salt.

Types of Brands
• Manufacturer Brands
– Brands initiated by producers
• Private Distributor Brands
– Brands initiated and owned by resellers
• Dealer brands, private
brands, store brands
• Generic Brands
– Brands indicating only
the product category

Consumers’ Perceptions of Store and Manufacturers’
Brands for Selected Product Groups
Source: “Store Brands at the Turning Point,” Consumer Research Network, 3624 Market Street, Philadelphia, PA.
FIGURE 13.2
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.

Class Exercise
In developing a brand name, it is important to

consider the requirements of an effective
choice. For each of the following requirements,
give several examples of brand names that
satisfy that requirement.
1. Easy to say, spell, and recall
2. Communicates major product benefits
3. Suggests product uses or special features
4. Distinctive enough to set the product apart from
competing brands

Protecting a Brand
• Degree of brand • Surnames and

protection through descriptive,
registration geographic, or
functional names
–Fanciful Most are also difficult to
protect.
–Arbitrary • Registration with the
–Suggestive U.S. Patent and
Trademark Office
–Descriptive protects a brand for
ten years with
–Generic Least indefinite renewals.
Branding Policies
• Individual Branding
– A policy of naming each product differently
– Avoids stigmatizing all products due to a
failed product
• Family Branding
– Branding all of a firm’s products with the
same name
– Promotion of one item also promotes all
other products

Branding Policies (cont’d)
• Brand-Extension Branding
– Using an existing brand name for an
improved or new product
– Provides support for new products through
established brand name and image

Co-Branding
• Using two or more brands on one product to

capitalize on the brand equity (customer
confidence and trust) of multiple brands
• Brands involved must represent a
complementary fit in the minds of consumers.
• Helps differentiate a firm’s product from those
of its competitors
• Helps take advantage of distribution
capabilities of co-branding partners

Brand Licensing
• An agreement whereby a company permits

another organization to use its brand on other
products for a licensing fee
• Advantages
– Low-cost and/or free publicity
– Revenues from royalty fees
• Disadvantages
– Lack of manufacturing control
– Creating too many unrelated products
– Licensing arrangements can fail

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, benefits, and image

Major Packaging Considerations
• Cost of Packaging
– Limited consumer willingness to pay for better
packaging
• Tamper-Resistant Packaging
– FDA regulations and consumer
safety concerns
• Family Packaging
– Similar packaging for all of a
firm’s products or packaging
that has one common design A A
element
Major Packaging Considerations (cont’d)
• Promotional Role (Informing the Consumer)

– Verbal and nonverbal
symbols
– Size, shape, texture, color,
and graphics
• Reseller Needs
– Transportation, storage,
and handling
• Environmentally Responsible
– Biodegradable and recyclable

Packaging and Marketing Strategy
• Altering the Package

– To update style and to meet increased competition
– To highlight new features
– To take advantage of new packaging materials
– To make the product safer or easier to use
– To reduce packaging costs
• Secondary-Use Packaging
– Reusable packaging adds customer value
• Category-Consistent Packaging
– Packaging reflects customer expectations for the
expected appearance of products in a category

Packaging and Marketing Strategy (cont’d)
• Innovative Packaging
– Unique features or ways of packaging that make a
product more distinct from its competitors
• Multiple Packaging
– Bundling multiple units of a product together to
encourage usage and to increase demand
• Handling-Improved Packaging
– Packaging that has been changed
to facilitate product handling in the
distribution channel

Net Sights
• The Institute of Packaging Professionals is a

resource for information about packaging and
the packaging industry. The organization’s
website (http://www.iopp.org/) includes
discussions about packaging issues, news
and press releases, contact information for
packaging organizations around the world,
and winners of Worldstar, an international
award in packaging.

Class Exercise
1.Look at the nearest snack food wrapper

or soft drink container and identify the
a. brand name.
b. brand mark.
c. trademark.
d. trade name.
2.Using the wrapper or container, explain
how packaging performs three
functions: protection, convenience, and
communication.
Class Exercise (cont’d)
3. Is the manufacturer of the product using

individual, family, or brand-extension
branding?
4. You work for a firm that is introducing a new
chocolate candy bar that contains an extra
amount of caffeine. Develop a brand name
that
a. is easy for customers to say, spell, and recall.
b. positively suggests uses and special
characteristics.
c. indicates major product benefits.
d. can be protected easily through registration.
Criticisms of Packaging
• Lack of functionality
– Leak, difficult to open/close/seal, hard-to-
use designs
• Safety
– Sharp edges, broken glass, health hazards
• Deceptive
– Shape, size, colors mask true nature of
product
• Cost of packaging
– What customers prefer is costly
Debate Issue
Should fast-food restaurants use

environmentally responsible packaging
even when such packaging is less
effective in preserving product quality?

Labeling
• Labeling
– Providing identifying, promotional, legal, or
other information on package labels
• Universal Product Code (UPC)
– A series of electronically
readable lines identifying
a product and containing
inventory and pricing
information

Labeling (cont’d)
• Purposes of Labels
– Help identify the product
• Display brand name and unique graphics
– Support promotional efforts for the product
• Coupons, discounts, product features
– Provide legally required labeling
information
• Fair Packaging and Labeling Act of 1966
• Nutrition Labeling Act of 1990

Labeling (cont’d)
• Purposes of Labels (cont’d)

– “Green Labeling” issues
• Labeling packaging as made of recyclable
materials
– Provide information on product origin
• “Made in the USA”
1st

Why Is This
Organization
Concerned About
Fraudulent
Labeling?
Reprinted with permission of Organic Consumers Association.

After reviewing this chapter you should:
• Be able to explain the value of branding

• Understand brand loyalty
• Be able to analyze the major components of
brand equity
• Recognize the types of brands and their
benefits
• Understand how to select and protect brands
• Know about three types of branding policies

After reviewing this chapter you should:
• Understand co-branding and brand

licensing
• Be able to describe the major packaging
functions and design considerations and
how packaging is used in marketing
strategies
• Understand the functions of labeling
and its legal issues

Chapter Quiz
1.Compared to creating and developing a

brand from scratch, a firm sometimes
buys a brand from another company at
a premium price because outright
purchase is
a. more challenging strategically.
b. less time consuming.
c. less risky.
d. less expensive.
e. less expensive and less risky.
Chapter Quiz (cont’d)
2.Which of the following laws was

enacted by Congress in 1988 to
strengthen trademark protection?
a. Brand Protection Act
b. Lanham Act
c. Trademark Infringement Act
d. Trademark Law Revision Act
e. U.S. Patent and Trademark Act

3. To use co-branding effectively, which one of the

following is probably least important?
a. The brands involved should represent a complementary fit
in a customer’s mind.
b. The brands that are teamed together should not lose their
individual identities.
c. The brands involved should be owned by two or more
organizations.
d. To avoid confusion on the part of customers, co-branding
should be done in a way so that it is obvious which brand is
the main brand or key brand.
e. The co-branded product should be able to benefit from the
distribution system of both brands involved.

4.To promote an overall company image,

packages of Pillsbury cake and cookie
mixes have similar designs and colors.
This approach is known as
a. family branding.
b. brand managing.
c. line consistency.
d. family packaging.
e. product grouping.

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Part Five

1. To explain the value of branding

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 2

7. To understand co-branding and brand

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 3

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 4

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 5

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 6

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 7

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 8

Soy Milk Market Share

White Wave’s Silk 80%

General Mills’ 8th Continent 12%

All others (including Eden Soy

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 9

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 10

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 11

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 12

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 13

Adelphia Adelphia The

ANC Rental National Car Office

Enron Enron Field Minute

PSINet PSINet Stadium M&T Bank

TWA Trans World Edward

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 14

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 17

Reprinted with permission of Morton Salt.

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 18

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 19

• The name should

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 21

In developing a brand name, it is important to

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 22

• Degree of brand • Surnames and

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 24

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 25

• Using two or more brands on one product to

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 26

• An agreement whereby a company permits

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 27

• Involves the development of a container and

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• Promotional Role (Informing the Consumer)

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• Altering the Package

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• The Institute of Packaging Professionals is a

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1.Look at the nearest snack food wrapper

3. Is the manufacturer of the product using

Should fast-food restaurants use

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 38

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 39

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 40

• Purposes of Labels (cont’d)

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 41

Reprinted with permission of Organic Consumers Association.

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 42

• Be able to explain the value of branding

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 43

• Understand co-branding and brand

Copyright © Houghton Mifflin Company. All rights reserved. 13 | 44