CHAPTERS 30 & 31: BRANDING, PACKAGING, AND LABELING

I. PRODUCT MIX PRODUCT PLANNING INVOLVES DETERMINING PRODUCT MIX. A RETAILER MUST CAREFULLY PLAN AND EVALUATE PRODUCT MIX

A. PRODUCT LINES AND ITEMS- *RETAILERS FREQUENTLY SELL MORE THAN ONE PROUCT LINE (CARS BY FORD). *RETAILERS CARRY SEVERAL PRODUCT ITEMS FOR EACH LINE (CALVIN KLEIN, COCA COLA)

B. PRODUCT WIDTH AND DEPTH- A PRODUCT MIX IS DEFINED BY THE WIDTH AND DEPGHT OF ITS PRODUCT OFFERINGS.

1. WIDTH- NUMBER OF DIFFERENT PRODUCT LINES A BUSINESS 2. DEPTH- NUMBER OF PRODUCT ITEMS OFFERED WITHIN EACH LINE

II. BRANDING ALMOST EVERY PRODUCT HAS A BRAND. SOME ARE WELL KNOWN WORLD WIDE (LEVIS, PEPSI, MCDONALD’S, IBM). OTHERS ARE LESS WELL KNOWN OR GENERIC

A. ROLE OF BRANDS IN PRODUCT PLANNING WHEN NEW PRODUCTS ARE DEVELOPED OR CHANGES ARE MADE TO EXISTING PRODUCTS, A COMPANY MUST DECIDE ON THE MARKET THAT WILL BE SERVED.

THE COMPANY MUST THAN CREATE THE PRODUCTS IMAGE ACCORDINGLY THROUGH ITS DESIGN, PRICING, DISTRIBUTION, AND PROMOTION.

1. CORPORATE SYMBOL- A FIRM’S NAME, LOGO, AND TRADE CHARACTERS MAKE UP ITS CORPORATE SYMBOL.

2. NATIONAL BRANDS- NATIONALLY RECOGNIZED AS A RESULT OF NATIONAL ADVERTISING. THESE BRANDS GENERATE A MAJORITY OF SALES FOR MOST PRODUCT CATEGORIES. THESE BRANDS INDICATE QUALITY AND PRICE

3. PRIVATE BRANDS- APPEAL TO CUSTOMERS WHO WANT QUALITY AND PERFORMANCE AT A LOWER PRICE. THERE IS NOT MUCH COMPETITION WITH PRIVATE BRANDS WHICH CAN LEAD TO A HIGHER GROSS PROFIT MARGIN. (SEARS KENMORE, CRAFTS TOOLS)

4. UNBRANDED MERCHANDISE- ALSO CALLED GENERIC PRODUCTS AND ARE PRICED % LOWER THAN NATIONALLY ADVERTISED PRODUCTS.

B. BRANDING STRATEGY A STRATEGY BASED ON THE SIMULTANEOUS OFFERING OF NATIONAL, PRIVATE, AND GENERIC BRANDS.

III. PACKAGING AND ITS FUNCTION PACKAGING IS IMPORTANT TO PRODUCT PLANNING BECAUSE IT REPRESENTS THE SIZE, SHAPE AND FINAL APPEARANCE OF A PRODUCT. 10% OF A PRODUCTS RETAIL PRICE IS SPENT ON PACKAGING.

A. PROMOTING AND SELLING THE PRODUCT- A WELL DESIGNED PACKAGE IS A POWERFUL POINT-OF-PURCHASE SELLING DEVICE. A BETTER CONTAINER CAN CREATE MORE SALES.

B. DEFINING PRODUCT IDENTITY- PACKAGES ARE OFTEN USED TO INVOKE PRESTIGE, CONVENIENCE, STATUS, OR OTHER POSITIVE PRODUCT ATTRIBUTES IN THE EYES OF THE CUSTOMER.

C. PROVIDING INFORMATION MANY PACKAGES GIVE DIRECTIONS FOR USING THE PRODUCT AND INFORMATION ABOUT ITS CONTENTS, NUTRITIONAL VALUE, AND POTENTIAL HAZARDS.

D. MEETING CUSTOMER NEEDS- PRODUCT PACKAGES OFTEN COME IN VARIOUS SIZED TO MEET THE NEEDS OF DIFFERENT MARKET SEGMENTS. (FAMILY PACKS, BULK, SINGLE SERVING, MICROWAVABLE)

E. ENSURING SAFE USE- MANY GLASS CONTAINERS HAVE NOW BEEN REPALECED BY PALSTIC. ALSO MANY DRUGS ARE SOLD IN TAMPER RESISTANT PACKAGES.

F. PROTECTING THE PRODUCT- A PACKAGE MUST PROTECT A PRODUCT DURING SHIPPING, STORAGE AND DISPLAY. (METAL, PLASTIC, WOOD, AND CARDBOARD)

IV. LABELING LABELING PLAYS A MAJOR ROLE IN PRODUCT PLANNING. ITS MAIN FUNCTIONS ARE TO INFORM CUSTOMERS ABOUT A PRODUCTS CONTENTS AND DIRECTIONS FOR USE. IT IS ALSO TO PROTECT A BUSINESS FROM LEGAL LIABILITY.(FDA)

LABELS OFTEN CONTAIN A BRAND NAME, LOGO, INGREDIENTS, DIRECTIONS, AND SPECIAL PROMOTIONAL MESSAGES.

VI. STEPS IN DEVELOPING NEW PRODUCTS NEW PRODUCTS CAN ADD TO A COMPANY’S OVERALL SALES WHILE ALSO BOOSTING MARKET SHARES NEW PRODUCT DEVELOPMENT GENERALLY INVOLVES 7 STEPS:

GENERATING IDEAS

SCREENING IDEAS

DEVLOPING A BUSINESS PROPOSAL

DEVELOPING A PRODUCT

TESTING THE PRODUCT

INTRODUCING THE PRODUCT (COMMMERCIALIZATION)

EVALUATING CUSTOMER ACCEPTANCE (PG )

V. PRODUCT LIFE CYCLE THE PRODUCT LIFE CYCLE REPRESENTS THE STAGES THAT A PRODUCT GOES THRU DURING ITS LIFE. THERE ARE 5 STAGES OF THE LIFE CYCLE

INTRODUCTION GROWTH MATURITY RENEWAL DECLINE (TEXTBOOK PG 557)