Section 31.1 Branding Elements and Strategies Marketing Essentials n Chapter 31 Branding, Packaging, and Labeling Section 31.1 Branding Elements and Strategies

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies What You'll Learn The nature, scope, and importance of branding in product planning The various branding elements The different types of brands How to classify branding strategies

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Why It's Important The right name is an important part of every successful business. The name and symbols of a business or a product project the personality of the company, product, or service.

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Key Terms brand brand name brand mark trade name trade character trademark manufacturer brand private distributor brand generic brand brand extension brand licensing mixed-brand strategy co-branding strategy

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Branding A brand is a name, term, design, or symbol (or combinations of them) that identifies a business or organization and the products that they offer. Brands are divided into two categories: corporate brands product brands Slide 1 of 6

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Branding Corporate brands identify the business and reflect quality, value, and reliability. Example: Coca-Cola, Disney, McDonald's, and Citibank Product brands connote quality and reliability for a particular product. Example: Pepsi, Coke, Barbie, Whopper, and Big Mac Slide 2 of 6

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Branding A brand name is the word, group of words, letters, or numbers of a brand that can be spoken. Example: PT Cruiser, Mountain Dew, SnackWells, and K2 A brand mark is a symbol, design, or distinctive coloring or lettering that identifies a brand. Example: U.S. Postal Service's eagle, Apple Computer's apple Slide 3 of 6

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Branding A trade name is the legal name under which a company or division of a corporation does business. Example: Amex, Dell, Kellogg's, and Xerox A trade character is a brand mark with human form or characteristics. Example: The Jolly Green Giant, the Pillsbury Doughboy Slide 4 of 6

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Branding A trademark is a brand name, brand mark, trade name, trade character, or a combination of these given legal protection by the federal government and noted by the trademark symbol (). Slide 5 of 6

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Branding Brand names, brand marks, trade names, trade characters, and trademarks are often combined to form a firm's corporate symbol or name. Slide 6 of 6

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Top Ten Brands Rank Brand Company 1999 Advertising (in millions of dollars) Brands are often a company’s most valuable asset. What is the total 1999 advertising spending for these top ten brands? Do you think these brands would continue to be valuable if the companies reduced or eliminated their advertising? 1 Chevrolet General 762.4 vehicles Motors Corp. 2 AT&T AT&T Corp. 711.4 telephone services 3 Dodge Daimler- 651.7 vehicles Chrysler 4 Ford Ford Motor 629.5 vehicles Company 5 McDonald's McDonald's 627.2 restaurants Corp. 6 Toyota Toyota Motor 569.4 vehicles Corp. 7 Sears Sears, 556.1 department stores Roebuck & Co. 8 Sprint Sprint Corp. 470.1 telephone services 9 Chrysler Daimler- 426.5 vehicles Chrysler 10 Nissan Nissan Motor 416.9 vehicles Co.

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Importance of Brands in Product Planning The use of brands is important in product planning for several reasons. Branding: builds customer loyalty assures customers that products carrying the same brand are of a consistent quality addresses new target markets establishes an image for a product or company

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Generating Brands Seventy-five percent of companies introduce a new product name each year. Brand names are generated by: company employees specialized computer software programs branding agencies, naming consultants, and public relations agencies Half of all corporate name changes occur because of company mergers and acquisitions.

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Types of Brands Three classifications of brands are: manufacturer brands private distributor brands generic brands Slide 1 of 3

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Types of Brands Manufacturer brands, also called producer brands, are owned and initiated by manufacturers. Example: General Electric, Heinz, Motorola Private distributor brands, also called private brands, store brands, or dealer brands, are owned and initiated by wholesalers and retailers. Example: Radio Shack, Kmart Slide 2 of 3

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Types of Brands Generic brands represent a general product category and do not carry a company or brand name. The packaging carries only a description of the product, such as “pancake mix” or “paper towels.” They are usually much cheaper than brand-name products. Slide 3 of 3

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Brand Strategies Branding strategies are the ways companies use brands to meet sales and company objectives. Strategies include: brand extensions brand licensing mixed branding co-branding

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Brand Extension Brand extension is a branding strategy that uses an existing brand name for an improved or new product in the product line. Example: Ocean Spray Cranberry Juice extended to Cran-Apple, Cran-Raspberry, etc. Advantages: Reduces risk of new product failure Disadvantages: Over-extending a product line can cause brand dilution

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Brand Licensing Brand licensing is the legal authorization by a trademarked brand owner to allow another company (the licensee) to use its brand, brand mark, or trade character for a fee. Advantages: Enhance company image, sell more products

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Mixed Brands A mixed-brand strategy involves simultaneously offering a combination of manufacturer, private distributor, and generic brands. Example: Union Carbide sells Glad brand garbage bags and generic brand garbage bags.

Branding Elements and Strategies SECTION 31.1 Branding Elements and Strategies Co-Branding A co-branding strategy combines one or more brands to increase customer loyalty and sales for each individual brand. Example: Kellogg’s Pop-Tarts are made only with Smucker’s fruit filling. Starbucks Coffee Co. opens coffee shops inside Barnes & Noble bookstores.

Reviewing Key Terms and Concepts ASSESSMENT 31.1 Reviewing Key Terms and Concepts 1. What is the difference between a brand name and a brand mark? 2. Why is branding important to product planning? 3. Name three types of brands. 4. List four different branding strategies.

ASSESSMENT Thinking Critically 31.1 Internet service providers are teaming with airlines, financial institutions, media outlets, celebrities, and non-profit groups to offer private-label Web access. Do you think that individuals want to receive their Internet access from the New York Yankees, David Bowie, Pepsi, or their local bank? Why or why not?

Graphic Organizer 31.1 Types of Brands TYPES OF BRANDS Manufacturer Private Distributor Brands Generic Brands

Marketing Essentials End of Section 31.1