1. Branding, Packaging, and Labeling
Chapter 31

2. Section 30.1 Branding

3. Branding
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 the business, product or service and sets it apart from its competition.
Developing a brand strategy can be one of the most challenging steps in the process
It is a crucial step when creating a company identify
A brand consistently and repeatedly tells customers and prospective customers why they should buy the company’s products or services
Brands are important assets and powerful tools for marketing and selling products

4. Elements of Branding and Brand Name
Brands are developed to target customers’ needs and preferences
Branding elements include brand names, trade names, brand marks, trade characters, and trademarks
These elements often combine to form a firm’s corporate symbol or name
A brand name, or product brand, is a word, a group of words, letters, or numbers that represent a product or service.
An effective brand name should be easily pronounced, distinctive, and recognizable.
Brand names are heavily marketed and are important company assets
Examples – Pepsi, Coca-Cola, Barbie, Big Mac

5. Trade Name
A trade name, or corporate name, identifies and promotes a company or a division of a particular corporation.
The tradename is the legal name of the business
Trade name reflects the quality, value, and reliability of the organization.
Trade names are used for investors, media, governmental purposes, and to support a company’s product brands.
Examples – Proctor and Gamble, IBM, Disney, Kellogg’s Nike, and Google
Trade names are legally protected and rarely change

6. Brand Mark, Trade Character, and Trademark
A brand mark incorporates a unique symbol, coloring, lettering, or design element
A brand mark is visually recognizable
Examples - Apple’s Apple® logo, McDonald’s® golden arches
A trade character is a specific type of brand mark, one with human form or characteristics
Examples – Betty Crocker’s Jolly Green Giant®, Keebler Elves®, Pillsbury Doughboy®
Trademark is a brand name, brand mark, trade name, trade characteristic, or a combination of these elements that is registered with the federal government and has legal protection.
Examples – Kellogg’s Rice Crispies® cereal, Visa® credit card
Register Trademarks are followed by the ®
Unregistered Trademarks are followed by the ™

7. Elements of Branding Brand Name Trademark Elements of Branding
Trade Name
Trade Character
Brand Mark

8. Importance of Brands in Product Planning
Branding establishes an image for a product or company and projects that image to its customers and the marketplace.
The use of brands is important in product planning for several reasons:
To build product recognition and customer loyalty – important for a customer to easily recognize a company’s brand to make repeat purchases
To ensure quality and consistency – through branding, companies communicate to customers consistent quality and performance, purchase after purchase
To capitalize on brand exposure – branding helps companies extend their products or services into new target markets
To change company or product image – with careful planning, companies can also adjust or reposition a corporate or product brand’s image to expand sales

9. Generating Brand Names
An estimate of 75% of all companies introduce a new product name every year
The US Patent and Trademark Office registers more than 400,000 trademarks per year
This is why some companies find it increasingly difficult to secure desirable corporate or product names
Some companies use computer software programs, others hire branding agencies, naming consultants, or public relations firms to generate and check the availability of brand names
Over 60% of all companies conduct market research to test new brand names before they are released
Once established, brand names are carefully protected

10. Types of Brands
Three classifications of brands – National Brands (manufacturers), Private Distributor Brands (wholesalers and retailers), and Generic Brands
National Brands – also known as producer brands, are owned and initiated by national manufactures or by companies that provide services.
Examples – Hershey Foods®, Colgate-Palmolive®, Whirlpool®
National Brands generate the majority of sales for most consumer product categories
Approximately 65% of all appliances, 78% of all food products, 80% of all gasoline, and 100% of all cars are national brands
National Brands are also associated with an image

11. Types of Brands
Private Distributor Brands – also known as private brands, store brands, dealer brands, or private labels, are developed and owned by wholesalers and retailers; manufacturer’s name may not appear on the product
Examples 0 Radio Shack® electronic items, Walmart’s Great Value®, Sears’ Craftsman®
Private Distributor Brands are increasing their global market share in most categories
Popular with retailers because they usually carry higher gross margins
Private brands are not sold at competitors’ stores, therefore help cultivate customer loyalty

12. Types of Brands
Generic Brands – products that do not carry a company’s identity
Packaging for generic products simply describe the item, such as “pancake mix” or “paper towels”
Generally sold in supermarkets or discount stores
The unbranded products are 30-50% lower priced than manufacturer brands
There is no advertising to promote these products

13. Branding Strategies
Brand extension – strategy that uses an existing brand name to promote a new or improved product in a company’s product line. Risk includes overextending a product line and diluting or weakening a brand
Brand licensing – a legal authorization by a brand owner to allow another company (licensee) to use its brand, brand mark, or trade character for a fee
Mixed brands – offers a combination of manufacturer, private distributor, and generic brands to consumer
Co-Branding – combines one or more brands in the manufacture of a product or in the delivery of a service

14. Section 31.2 Packaging and Labeling

15. Packaging
A package is the physical container or wrapping for a product
A package represents the size, shape, and final appearance of a product at the time of sale
10% of a product’s retail price is spent on the actual packaging, its design, and development
Aside from holding products, packaging fulfills several functions:
Selling the product, communicating product identity, providing information, meeting customer needs, protecting consumers, protecting the product and theft reduction

16. Selling the Product
Customer reaction to a product’s package and its brand name is an important factor in its success of failure in the marketplace
Attractive, colorful, and visually appealing packages have promotional value and can carry important messages about the product’s performance, failures, and benefits
A well-designed package is a powerful point-of-purchase selling device
Sometimes marketers package, or bundle, two or more different goods or services in one package, known as mixed bundling
Price bundling occurs when two or more similar products are placed on sale for one package pricing

17. Communicating the Product Identity
Packages can promote an image such as prestige, convenience, or status through the use of color, words, and labels on the packaging
Color is a main design element for packages because it can attract attention or project an image
Example –
Red communicates vitality and dependability
Yellow makes packages look larger and conveys the image of sun, warmth, and happiness
Blue conveys an image of cleanliness and feelings of knowledge
Green projects a natural and healthy image
White implies freshness
Black implies status, quality, and richness

18. Providing Information
Package provides useful information to the customer
Give directions for using a product
The contents
Package guarantees
Nutritional information
Instructions for care
Warnings about potential hazards

19. Meeting Customer Needs
When designing packages, product planners analyze customer lifestyles and create packaging for customer convenience, functionality, and family size.
Example –
Nabisco created its patented resealable opening for its Chips Ahoy cookies
Heinz Ketchup up-side down bottle
Product packages come in various sizes for different market segments
Family size cereal
Single serve soda also comes in 6-packs and 12-packs
Bulk size paper towels

20. Protecting Consumers Package can improve product safety
Formerly packaged in glass now come in plastic containers
To avoid misuse or product tampering, over-the-counter medications and cosmetics are sold in tamper-resistant containers
Airtight containers are used to protect against spoilage of perishable foods, such as dairy, fruit, meat, and vegetable products
Childproof containers were developed to be more difficult to open to reduce chances of accidental spills or poisonings

21. Protecting the Product
A package must protect a product during shipping, storage, and display
Packaging design should also prevent or discourage tampering, prevent shoplifting, and protect against breakage
Blisterpacks are packages with preformed plastic molds surrounding individual items arranged on a backing
“Packing peanuts” are loose-fill packaging and cushioning material used to prevent damage to products during shipping

22. Theft Reduction Packaging also helps reduce theft
Some packages are intentionally made larger than the product to make it difficult for a thief to steal it
Electronic anti-theft devices are often attached to packages to deter theft

23. Contemporary Packaging Issues
Product packaging offers companies unique opportunities to incorporate the latest technologies and address lifestyle changes as well as environmental, social, and political concerns
Aseptic packaging uses technology that keeps foods fresh without refrigeration for long periods.
Process involves separately sterilizing the package and the food product, and then filling and sealing the package in a sterile environment.
Ex – paperboard juice boxes, puddings, syrups, flavored milks
Companies are developing packages that respond to consumer demand for environmentally sensitive designs
Reusable shopping bags, biodegradable packages, recyclable, and safer for the environment
Some companies are using their packages to promote social and political causes, known as cause packaging.
Ex- Ben and Jerry’s ice cream cartons promote saving the rain forest and express opposition to the use of bovine growth hormone to stimulate milk production in cows

24. Functions of Packaging
Selling
Protecting the Product
Meeting Customer Needs
Communicating Product Identify
Providing Information
Protecting Customers
Theft Reduction

25. Labeling
A label is an information tag, wrapper, seal, or imprinted message that is attached to a product or its package
The main function of a label it to inform customers about a product’s contents and give direction for use
Labels also protect businesses from legal liability if a consumer is injured during the use of its products
Three kinds of labels:
Brand label
Descriptive label
Grade label

26. Types of Labels
Brand label gives the brand name, trademark, or logo. Not very detailed
Ex – Chiquita Banana sticker
Descriptive label gives information about the product’s use, construction, care, performance, and other features.
Ex – food labels include product illustrations, weight statements, dating and storage information, product guarantees, and the manufacturer’s name and address
Grade label states the quality of the product
Ex – Eggs are grade-labeled with AA, A, and B, corn and wheat are grade-labeled with 1 and 2, beef is graded as prime, choice, or select

27. Labeling Laws
Labeling laws have been enacted to prevent manufacturers from misleading consumers with deceptive or incomplete packaging labels
The Fair Packaging and Labeling Act (FPLA) of 1966 established mandatory labeling requirements and authorized the US Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) to establish packaging regulations
FDA – Nutrition Labeling and Education Act of 1990 protects consumers from deceptive labeling; requires that all labels give nutritional information on how a food fits into an overall daily diet
In 2009, the FDA issued regulations regarding the labeling of products made with genetically engineered animals
FTC – responsible for regulating labeling and monitoring advertising that is false or misleading
The Care Labeling Rule of 1972 requires that care labels be placed in textile clothing

28. Labeling Laws
US Department of Agriculture (USDA) – issued legal standards, certification requirements, and penalties for misuse of organic labels
The Organic Foods Production (OFPA) Act of 1990 requires labeling based on the percentage of organic ingredients in a product.
The County of Origin Labeling (COOL) Act of 2002 requires that a country-of-origin label be placed on all fruits, vegetables peanuts, meats, and fish
The Food Allergan Labeling and Consumer Protection Act (FALCPA) of 2004 applies to consumer packaged foods regulated by the FDA
The Food Safety and Inspection Service (FSIS) established policies for processors to voluntarily ass FSIS-approved allergen statements to the labeling of meat, poultry, and egg products