1. CHAPTER 31 Branding, Packaging, and Labeling

2. 31.1Branding Elements & Strategies  Objectives  Discuss the nature, scope, and importance of branding in product planning  Identify the various branding elements  List three different types of brands  Explain how branding strategies are used to meet sales and company goals

3. 31.1 – Key Terms  Brand  Brand Name  Trade Name  Brand Mark  Trade Character  Trademark  National Brands  Private Distributor Brands  Generic Brands  Brand Extensions  Brand Licensing  Mixed Brand  Co-Branding

5. 31.1Branding  Branding is an important component of the product planning process  A brand is a name, term, design, symbol, or combination of these elements that identifies a product or service that distinguishes it from others  Brands bring any number or benefits, features, or qualities

6. 31.1Branding  Example: A company may want to cultivate a brand that suggests quality and reliability. Another company may want to cultivate a brand that suggests fun and excitement.  Brands are one of a company’s most important assets and are powerful tools in the marketing and selling process

7. 31.1Elements of Branding  Brands are developed to target customers’ needs and preferences  Includes elements such as:  Brand names  Trade names  Brand marks  Trade Characters  Trademarks  These elements are often combined to for a firm’s corporate symbol or name

8. 31.1Elements of Branding  Effective brands have tremendous value and frequently become global brands  Global brands appeal to consumers beyond the cultural and political barriers  Example: McDonald’s is an effective global brand because it projects an image of consistent quality in food and service but adapts the menu to meet the needs of different countries

9. 31.1Brand Name  A brand name is a word, group or words, letters, or numbers that represent a product or service  An effective brand name should be easily pronounced, distinctive, and recognizable  Examples:  PT Cruiser  Pepsi  Barbie  Pop-Tarts  Big Mac

10. 31.1Trade Name  A trade name, or corporate brand, identifies and promotes a company or a division of a particular corporation  The trade name is the legal name that a company uses when it does business  It is used to promote a positive image of the organization  Examples of Trade Names:  Procter & Gamble  Dell  Disney  Nike  Yahoo  Kellogg

11. 31.1Brand Mark & Trade Character  Many brands incorporate a unique symbol, coloring, lettering, or other design element known as a brand mark  A brand mark is recognizable visually and does not need to be pronounced, a brand that cannot be expressed in words.  Example: The UPSU.S. Postal Service’s eagle or Apple Computer’s apple

12. 31.1 – Brand Mark Examples

13. 31.1Brand Mark & Trade Character  A trade character is a specific type of brand mark, one with human form or characteristics  Examples:  Green Giant’s Jolly Green Giant  Pillsbury Doughboy  Keebler Elves

14. 31.1Trademark  A trademark is a word, name, symbol, device, or a combination of these elements that is give legal protection by the government  Example:  The image of the golden arches is a trade mark of McDonald’s  The colorful peacock is a trademark of NBC  No other companies can use these symbol  The U.S. Patent and Trademark Office grants trademark rights

15. 31.1Trademark  Companies try to extend trademark branding of products or services to include sound, color, and smell  Trade marks are followed by a registered trademark symbol ®  These trademarks cannot be used or misused by other companies

16. 31.1Importance of Brands in Product Planning  Branding establishes an image for a product or company and projects that image to its customers and marketplace  The use of brands is important in product planning for several reasons:  To build product recognition and customer loyalty  To ensure quality and consistency  To capitalize on brand exposure  With careful planning, companies can also adjust or reposition a brand to capitalize on changes in the market

17. 31.1Generating Brand Names  About 75% of all companies introduce a new product name every year  Example: in 1999 the U.S. Patent and Trademark Office registered over 79,000 trademarks  Companies use computer software programs that specialize in generating brand names  These programs check to see if the name is already owned and trademarked by another company

18. 31.1Generating Brand Names  Other companies hire branding agencies, naming consultants, or public relations firms to generate and check availability of names  Over 60% if all companies conduct market research to test new brand names before they are released  After researching a name, the company will then conduct brand-loyalty research to gauge the brand’s effectiveness

19. 31.1 Types of Brands  Wholesalers and retailers also brand their products  There are three classifications of brands:  National Brands (Manufacturers)  Private Distributor Brands  Generic Brand

20. 31.1 Three Types of Brands National brands (manufacturers) Coca Cola Frito lay Private distributor brands wholesalers retailers Generic Brand No name

21. 31.1National Brands  National brands (producer brands) are owned and initiated by national manufacturers or by companies that provide services  Examples of national brands include:  Hershey foods  Colgate-Palmolive  Whirlpool  Sunoco  Ford Service companies that generate national brands are Northwest Airlines and Hilton

22. 31.1Importance of National Brands  Electronic commerce has created a new category of national brand: the Internet brand  There are internet brands for both consumer products and services  Examples of internet brands are eBay and amazon.com  Examples of service brands are Monster, Google, and Yahoo

23. 31.1 Importance of National Brands  National brands generate the majority of sales for most consumer product categories  70% of all food products  65% of all appliances  80% of all gasoline  100% of all automobiles are all sold under national brands

24. 31.1Private Distributor Brands  Private distributor brands are developed and owned by wholesalers and retailers  Private distributor brands are also called private brands and store brands  The manufacturer's name does not appear on the products, only the store name

25. 31.1Private Distributor Brands  Private distributor brands appeal to customers who desire the quality and performance of national brands at a lower price  Many large supermarket and retail chains have private distributor brands  Examples: Radio shack, Kohl’s Villager, Wal-mart’s George

26. 31.1The Increasing Popularity of Private Brands  Private distributor brands are increasing their market share in most product categorizes worldwide  Private brands are popular with retailers because they usually carry higher gross margins and thus are more profitable  Private brands cannot be sold at competitor’s stores so they help cultivate customer loyalty

27. 31.1 Generic Brands  Generic brands are products that do not carry a company identity  The packaging for generic products usually features a description of the product such as “pancake mix” or “paper towels”  Generic brands are generally sold in supermarkets and discount stores

28. 31.1 Generic Brands  Generic items are usually priced 30 to 50 percent lower than manufacturer brands  Companies that manufacture and sell generic brands do not heavily advertise or promote these products  More than 75% of all U.S. supermarkets carry generic items

29. 31.1 Branding Strategies  Companies develop and rely on a variety of branding strategies to meet sales and company objectives  Some of these strategies include:  Brand Extension  Brand Licensing  Mixed Branding  Co-Branding  Effective use of different brand strategies can increase sales of branded products and maximize company profits

30. 31.1 Brand Extensions

31.  Brand extension is a branding strategy that uses an existing brand name to promote a new or improved product in a company’s product line  Launching new products is costly and the failure rate for new products is high  Example: McDonalds McCafe can build sales in a big way

32. 31.1 Brand Extension Examples

33. 31.1 Brand Extensions  One risk that companies face when they employ a brand extension strategy is over extending a product line and diluting the brand  Brand dilution occurs when a brand includes too many products and the product line loses recognition and appeal with customers

34. 31.1 Brand Licensing  Some companies allow other organizations to use their brand, brand mark, or trade character through brand licensing  This authorization is a legal licensing agreement for which the licensing company receives a fee in return for the authorization  The agreement lists all the terms and conditions under which the brand may be used

35. 31.1 Brand Licensing  Companies license their brands to increase revenue sources, enhance company image, and sell more of their core products  Example: NFL has licensing arrangements with Pepsi and Visa. Pepsi and Visa use the NFL name and logo in their promotions to try to attract customers who are loyal to the NFL

36. 31.1 Mixed Brands  Some manufacturers and retailers use a mixed-brand strategy to sell products  They offer a combination of manufacturer, private distributor, and generic brands  A firm markets products under it's own name and that of a reseller because the segment attracted by the reseller is different from its own market.“  A manufacturer of a national brand will agree to make a product or sale under another company’s brand

37. 31.1 Mixed Brands  Example: Michelin manufactures its own brand of tires as well as tires for sale at Sears under the Sears brand name  A mixed-brand strategy enables a business to maintain brand loyalty through its national brand and reach several different target markets through private brands, thus increasing its overall product mix  It can maximize its profits by selling a private brand product without damaging the reputation and the sales of its national brand product

38. 31.1 Co-Branding  Co-Branding is a strategy that combines one or more brands in the manufacturing of a product or in the delivery of a service  This strategy enables companies to capitalize on the popularity of other companies’ product and services to reach new customers and, ideally, increase sales for both companies’ brands

39. 31.1 Co-Branding Examples http://images.businessweek.com/ss/09/07/0710_cobranded/1.htm

40. 31.1 Co-Branding  Co-branding can work with one or many partners  Co-branding can also work when two or more retailers share the same location  Example: Starbucks Coffee Co. has an agreement with Barnes & Noble to open coffee shops inside their bookstores

41. World’s 15 Most Reputable Brands

42. 31.1 After You Read 1) What is the difference between a brand name and a trade name? 2) List the three types of brands. 3) What are the different types of branding strategies?

43. A video from YouTube What is a Brand?

46. A video from YouTube Steve Jobs on Brand Marketing

48. CHAPTER 31.2 Packaging and Labeling

49. The Main Idea While branding gives a specific company or product brand personality, packaging and labels put a “face” on a product. Effective packaging and labels create a good impression, helps sell the product, and communicate benefits to customer.

50. The physical container or wrapping for a product Packaging The practice of packaging different products and services together Mixed Bundling Occurs when two or more similar products are placed on sale for one package price Price Bundling 31.2 Key Terms

51. Packages with preformed plastic molds surrounding individual items arranged on a backing Blisterpacks Incorporates a technology that keeps foods fresh without refrigeration for extended periods Aseptic Packaging Packaging that is used by companies to promote social and political causes Cause Packaging 31.2 Key Terms

52. Label that gives the brand name, trademark, or logo Brand Label A label that gives information about the product’s use, construction, care, performance, and other features Descriptive Label A label that states the quality of the product Grade Label An information tag, wrapper, seal, or imprinted message that is attached to a product or its package Label 31. 2 Key Terms

53. The Functions of Packaging Developing a product’s package in an integral part of product planning and promotion. A package does much more than hold a product; it is also a selling tool. Promoting and Selling the ProductDefining Product IdentityProviding InformationExpressing Customer NeedsEnsuring Safe UseProtecting the productTheft Reduction

54. The Functions of Package Selling the product Attractive, colorful and visually appealing packages have promotional value and can carry important messages about the product’s performance, features and benefits. Mixed Bundling - Marketers package, or bundle, tow or more different goods or services in one package Price Bundling – Occurs when two or more similar products are placed on sale for one package price.

55. The Functions of Package Communicating Product Identity Packages can promote an image such as prestige, convenience, or status. The design, color, words, and labels on the package all talk to the consumer.

56. The Functions of Package Providing Information A package provides useful information for the customer. Many package labels give directions for using a product, the contents, nutritional information. Etc.

57. The Functions of Package Meeting Customer Needs When designing packages, product planners analyze customer lifestyles and create packaging for customer convenience, functionality, and family size Customer demands for a better way to use all of the contents led to the Heinz Ketchup upside-down bottle.

58. The Functions of Package Protecting Consumers A package provide product safety. Example, many products that were formerly packaged in glass now come in plastic containers. Over the counter medications and cosmetics are now sold in tamper- resistant containers.

59. The Functions of Package Protecting the Product A package must protect a product during shipping, storage, and display. The package design should also prevent or discourage tampering, prevent shoplifting, and protect against breakage. Example: Blisterpacks – packages with preformed plastic molds

60. The Functions of Package Theft Reduction Packaging may also help reduce thefts. Some packages, for example, are intentionally made bigger than the product.

61. Contemporary Packaging Issues Product packaging offers companies unique opportunities to incorporate the latest technologies and address lifestyle changes as well as environment, social, and political concerns. Aseptic Packaging : Uses technology that keeps foods fresh without refrigeration for long periods Environmental Packaging : Packages are biodegradable, reusable, recyclable and safer for the environment

62. Contemporary Packaging Issues Product packaging offers companies unique opportunities to incorporate the latest technologies and address lifestyle changes as well as environment, social, and political concerns. Cause Packaging : Some companies us their packages to promote social and political causes. Pink ribbons on product packages promoting breast cancer awareness.

63. 31.2 Labeling Label Brand Label Descriptive Label Grade Level An information tag attached to a product or package There are 3 types of Labels Brand name, trademark, or logos Gives information on the products features States the quality of the product

64. 31.2 Labeling Laws  The Federal Trade Commission  Responsible for monitoring advertising that is false or misleading  The FTC is also responsible for monitoring advertising that is false or misleading  The Care Labeling Rule, introduced in1972, requires that care of garments be detailed on labels.

65. 31.2 Labeling Laws  The Fair Packaging and Labeling Act (FPLA) of 1966 established mandatory labeling requirements and authorized the U.S Food and Drug Admin (FDA) and the Federal Trade Commission (FTC) to establish packaging regulations

66. 31.2 Labeling Laws  The Federal Food and Drug Administration  Requires labels to give nutritional information on how food fits into overall daily diet  Regulates health claims and defines descriptive terms to maker them consistent  Requires manufacturers of certain products place health warnings on their packaging

67. Labeling Laws  U.S. Department of Agriculture monitors the food market.  Organic Foods became a specialty market totaling $11 billion in sales in 2002.  USDA issued legal standards and certification requirements for organic labels.  Country of Origin Labeling (COOL) Act requires that a country-of-origin label be placed on all fruits, vegetables, peanuts, meats, and fish in the future.

68. Labeling Laws  The Food Allergen Labeling and Consumer Protection Act (FALCPA) of 2004 applies to consumer packaged foods regulated by the FDA.  The FDA does not regulate meat, poultry, and egg products, this is the job of the Food Safety and Inspection Service (FSIS).

69. 31.2 - After You Read 1. Differentiate between a label and a brand label 2. Identify the types of information found on a food label 3. Name three federal agencies that regulate packaging and labeling

70. A video from YouTube Your Personal Brand