chapter product, branding, and packaging decisions eleven Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

11-2 LEARNING OBJECTIVES LO 11-1Describe the components of a product. LO 11-2Identify the types of consumer products. LO 11-3Explain the difference between a product mix’s breadth and a product line’s depth. LO 11-4Identify the advantages that brands provide firms and consumers. LO 11-5Explain the various components of brand equity. LO 11-6Determine the various types of branding strategies used by firms. LO 11-7Distinguish between brand extension and line extension. LO 11-8Indicate the advantages of a product’s packaging and labeling strategy.

11-3 Complexity of Products Michael Blann/Digital Vision/Getty Images

11-4 Types of Products Customers show such a strong preference that they will expend considerable effort to search. Wedding Gowns College Apparel Antiques Consumer is willing to spend minimum effort to evaluate prior to purchase. Can goods Shampoo Candy Consumers will spend a fair amount of time comparing alternatives Shoes Appliances Cellphones Consumers either do not normally think of buying or do not know about. Fire extinguishers Dictionary Medical supplies

check yourself Explain the three components of a product. 2.What are the four types of consumer products?

11-6 Product MixProduct Mix and Product Line Decisions Source: Kellogg’s 2010 annual report, Product Lines Ready-to-Eat Cereal Toaster Pastries and Wholesome Portable Breakfast SnacksCookies and Crackers Natural, Organic, and Frozen Kellogg’s Corn Flakes All-Bran Apple Jacks Cocoa Krispies Frosted Mini-Wheats Mueslix Kellogg’s Raisin Bran Froot Loops Kashi Special K Rice Krispies Nutri-Grain Special K Kashi Pop-Tarts Bear Naked Cheez-It Keebler Townhouse Club Famous Amos Fudge Shoppe Murray Eggo Morningstar Farms Kashi

11-7 Product Mix and Product Line Decisions Product Line Breadth Number of product lines Depth Number of categories within a product line Courtesy Pepsi Cola Company

check yourself What is the difference between product line breadth versus depth? 2.Why change product line breadth? 3.Why change product line depth?

11-9 A brand can use: Name, logo symbols, characters, slogans, jingles and even distinctive packages. Branding Oscar Mayer Wiener 1965 Commercial (One of America's Best Ads) Courtesy Mercedes-Benz USA, LLC; Merkley & Partners/New York

11-10 What Makes a Brand? Branding Brand name URLs URLs Logos and symbols Characters Slogans Jingles/Sounds “Law & Order” Jingles/Sounds “Law & Order” McGraw-Hill Companies, Inc. ©M. Hruby.

11-11 Value of Branding for the Customer Facilitate Purchasing Establish Loyalty Protect from Competition Reduce Marketing Costs Are Assets Impact Market Value Apple wins in the Apple vs Samsung patent lawsuit

11-12 Brand EquityBrand Equity: Brand Awareness Source: From interbrand.com, Reprinted with permission RankBrand Country of Ownership 2011 Brand Value ($ Billions) 1Coca-ColaU.S IBMU.S MicrosoftU.S GoogleU.S GEU.S McDonald’sU.S IntelU.S AppleU.S DisneyU.S Hewlett-PackardU.S.28.5

11-13 Brand Equity: Perceived ValuePerceived Value How do discount retailers like Target, T.J. Maxx, and H&M create value for customers? Photo by Peter Kramer/Getty Images

11-14 Brand Equity: Brand AssociationsBrand Associations ©McGraw-Hill Companies Inc/Gary He, photographer

11-15 Brand Equity: Brand LoyaltyBrand Loyalty Consumers are often less sensitive to price Marketing costs are much lower Firm insulated from the competition Copyright State Farm Mutual Automobile Insurance Company 2005 Used by permission

check yourself How do brands create value for the customer and the firm? 2.What are the components of brand equity?

11-17 Brand Ownership Manufacturer brands or national brands Private-label brands or Store Brands Premium Generic Copycat Exclusive co-branded

11-18 Brand Extension State Farm Website ©M Hruby

11-19 Brand Dilution Evaluate the fit between the product class of the core brand and the extension. Evaluate consumer perceptions of the attributes of the core brand and seek out extensions with similar attributes. Refrain from extending the brand name to too many products. Is the brand extension distanced enough from the core brand?

11-20 Zite: Personalized Magazine Co-branding ©M Hruby

11-21 Brand Licensing Photo by D. larke Evans/NBAE via Getty Images.

check yourself What are the differences among manufacturer and private-label brands? 2.What is co-branding? 3.What is the difference between brand extension and line extension? 4.What is brand repositioning?

11-23 Packaging What other packaging do you as a consumer find useful? ©M. Hruby.

11-24 Product Labeling ©The McGraw-Hill Companies, Inc/Elite Images C Sherburne/PhotoLink/Getty Images

Return to slide A brand association reflects the mental links that consumers make between a brand and its key product attributes, such as a logo, slogan, or famous personality. Glossary

Return to slide Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold. Glossary

Return to slide Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service. Glossary

Return to slide A brand extension refers to the use of the same brand name for new products being introduced to the same or new markets. Glossary

Return to slide Brand licensing is a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee. Glossary

Return to slide Brand loyalty occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buy from multiple suppliers within the same category. Glossary

Return to slide Brand repositioning or rebranding refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences. Glossary

Return to slide Co-branding is the practice of marketing two or more brands together, on the same package or promotion. Glossary

Return to slide Perceived value of a brand is the relationship between a product or service’s benefits and its cost. Glossary

Return to slide Product assortment or product mix is the complete set of all products offered by a firm. Glossary

Return to slide Product lines are groups of associated items, such as items that consumers use together or think of as part of a group of similar products. Glossary

Return to slide Product mix or product assortment is the complete set of all products offered by a firm. Glossary