1. Product, Branding, and Packaging Decisions
Chapter 9
Product, Branding, and Packaging Decisions
Chapter 9 will focus on product, branding, and packaging decisions.

2. Chapter 9: Product, Branding, and Packaging Decisions
LEARNING OBJECTIVES
LO1 Describe the components of a product LO2 Identify the types of consumer products LO3 Explain the difference between a product mix’s breadth and a product line’s depth LO4 Identify the advantages that brands provide firms and consumers LO5 Summarize the components of brand equity LO6 Describe the types of branding strategies used by firms LO7 State how a product’s packaging and label contribute to a firm’s overall strategy
These questions are the learning objectives guiding the chapter and will be explored in more detail in the following slides.

3. Canada goose – a canadian success story!
LO4, LO7
Not only functional & practical but a fashion statement too!
From meagre beginnings to phenomenal success
“Made-in-Canada” is a brand differentiator
The brand is very visible & chic
Per chapter introduction: the case study focuses on the success story of the Made-in-Canada brand, Canada Goose.
From humble beginnings in 1957 as a manufacturer of clothing & outerwear for automotive & industrial companies to an Canadian iconic brand symbol.
Consumers seek products with authentic stories & love the mythology of Canada. The made-in-Canada is a brand differentiator.
Sales have continued to grow with no signs of slowing down.
Canada Goose has not only created a valued product, but also built strong brand equity, high customer awareness, & intense loyalty.

4. Complexity of products and types of products
LO1
Complexity of products and types of products
Marketers involved with the development, design, and sale of products think of them in an interrelated fashion as depicted in Exhibit 9.1.
At the center is the core customer value, next is the actual product, followed by associated services.
When developing or changing a product, marketers start with the core customer value to determine what their potential customers are seeking. Then they make the actual physical product & add associated services to round out the offering.

5. Types of products - Consumer
LO2
Types of products - Consumer
Specialty
Shopping
Convenience
Unsought
Marketers consider the types of products they are designing and selling because that impacts how they promote, price & distribute their products.
There are two primary categories of products & services based on who is buying them: consumers or businesses
Consumer products are products and services used by people for their personal use.
Marketers further classify these products by the way they are used and purchased.
The four main types of consumer products are noted in the slide.
Specialty: consumer show a very strong preference that they will expend considerable effort to search for the best suppliers (e.g. Canada Goose coats)
Shopping: consumers spend a fair amount of time comparing alternatives (e.g. shoes)
Convenience: consumer is not willing to spend any effort to evaluate prior to purchase (e.g. bread)
Unsought: consumers do not normally think to buy (e.g. funeral services) or do not know about (new-to-the-world products)

6. Product mix and product line decisions
LO3
Product mix and product line decisions
The complete set of all products offered by a firm is called its product mix.
Colgate-Palmolive’s product mix is shown in Exhibit 9.2.
The product mix consists of product lines (groups of associated items – oral care, personal care, household care etc.) as well as product categories (an assortment of items that the customer sees as reasonable substitutes for one another – within oral care, whitening, toothbrushes, floss etc.).
Go through Exhibit 9.2 in detail to ensure students understand the difference.
Another example: Many students may be unfamiliar with the name ConAgra, but they likely know its brands, such a Chef Boyardee, Jiffy Pop and Orville Redenbacher popcorn.
All companies need to manage their brand portfolios to meet the needs of current customers. One of ConAgra’s best known and most successful brands is Healthy Choice. With its distinctive green packaging, Healthy Choice products appear throughout supermarkets.
Group activity: List as many Healthy Choice products as you can think of. How many product lines do they represent?
Healthy choices ( has four types of meals, soups (bowls and cans), frozen novelties, bread and pasta sauces. Thus, they have five product lines.
The product mix reflects the breadth & depth of a company’s product lines. See next slide for further information.

7. Product mix breadth and product line depth
LO3
Product mix breadth and product line depth
Breadth
Depth
Number of products within
a product line
Number of product lines
The product mix reflects the breadth & depth of a company’s product lines.
The breadth represents the number of product lines offered by the firm.
In Exhibit 9.2, Colgate-Palmolive have five product lines.
The depth, in contrast, is the number of products within a product line.
In Exhibit 9.2, Colgate-Palmolive’s oral care line offers toothpaste, toothbrushes etc.
Within each product category there are a number of individual items called stock keeping unit (SKU) which are the smallest unit available for inventory control.
Within the toothpaste category, they offer 49 Colgate SKU’s.
However, adding unlimited numbers of new products can have adverse consequences. Too much variety can be too costly to maintain and may weaken a firm’s brand reputation.
As such, firms change their product mix’s breadth and depth as discussed in the next slide.

8. Change product mix breadth
LO3
Change product mix breadth
Increase Breadth
Add new product lines
Decrease Breadth
Delete entire product lines
Exhibit 9.3 offers a hypothetical example of a company with four product lines in its product mix.
Firms may change their product mix breadth by either adding or deleting entire product lines.
Ask students: Why would a company want to increase its product mix breadth? Why would it want to decrease it? Students should comment that they would increase to capture new or evolving markets and increase sales. Decreasing might be due to changing market conditions or internal strategic priorities.

9. Change product line depth
LO3
Change product line depth
Decrease Depth
Unilever eliminated 400 core brands including Ragu sauce & Sunlight laundry detergent
Increase Depth
Band-Aid now has over 40 products to heal cuts.
Firms occasionally either add to or delete from their product line depth.
Increase depth: firms may add new products within a line to address changing consumer preferences or preempt competitors while boosting sales. They may also add new products to serve new target customers.
Decrease depth: it is also necessary from time to time to delete product categories to realign resources. This decision is never taken lightly since substantial investment has typically been made.
Ask students: What are the pros and cons of offering competing products in the same category?
The primary advantage is to increase overall sales and profits. But at the same time, adding competing products can cannibalize sales of current brands. Firms must determine the net effect on sales and the overall impact on competitive products.

10. LO3
Change number of sku’s
Addition or deletion of SKUs in existing categories
Designed to stimulate sales or react to consumer demand
Many stores add SKUs to provide a deeper assortment. They might add, for instance, more colors or sizes in a category. This is often done to stimulate sales or react to consumer demand.
Ask students: What effect does this have on consumer behaviour? On financial performance? What is the effect of reducing the number of SKUs?
By providing consumers with a deeper assortment, it is more likely that the store will satisfy their demand, which should result in increased sales. But adding SKUs is expensive. The effect of reducing SKUs is just the opposite.

11. Oscar Meyer Commercial
LO4
branding
A brand can use: Name, logos, symbols, characters, slogans, jingles and even distinctive packages.
A company lives or dies based on brand awareness.
Branding provides a way for a firm to differentiate its product offerings from those of its competitors & can be used to represent the name of a firm & its entire product mix, one product line, or a single item.
Brand identification takes many forms as noted in the slide.
Ask students: How many of you can sing the Oscar Meyer jingle? Student will get a kick out of the YouTube ad (always check before class). It is the one of the original 1965 Oscar Meyer ads.
Group activity: Compare the positioning of two Chevrolet brands (e.g. Corvette, Aveo, Impala, and Malibu). Why does Chevrolet have so many competing brands in the same category?
Each brand is aimed at a different target market. Aveo starts around $10,000 while a Corvette coup starts at $45,000.
Oscar Meyer Commercial

12. What makes a brand? LO4 Exhibit 9.4 summarizes these brand elements
Group activity: Identify a brand that you recognize primarily by each of these elements.
Brand Name: Most brands
Jingles: Be all you can be – Army
URLs:
Logos & Symbols: Nike Swoosh
Slogans Nike- Just Do It
Characters: Quaker, KFC, McDonalds.

13. LO4
Value of branding
Brands add value to merchandise & services beyond physical & functional characteristics or the pure act of performing the service.
Exhibit 9.5 examines some ways in which brands add value for both customers & the firms.
Group activity: Have students pick a well-established brand. Have them provide examples of how the brand provides value.
For example, consider eBay. The brand facilitates instant recognition, consumers are avidly loyal, which reduces competition from other online auctions and reduces expensive marketing ads. The brand is a valuable asset that they protect through copyrights, and directly affects their profits.

14. LO5
Brand overview
To understand branding, we look at three areas: brand equity, brand ownership & brand names, as illustrated in Exhibit 9.7.
The value of a brand translates into brand equity or the set of assets & liabilities linked to a brand that add to or subtract from the value provided by the product or service.
Brand equity is an important concept that can both help and hinder. For example, customers dislike some brands because of the firm’s actions or their negative perceptions. Nike has been the target of many labour activists, which causes some consumers to refuse to purchase or wear Nike products. Mattel’s brand equity was hurt when it recalled over 19 million toys because of lethal magnets and lead paint. Over the years, most automobile manufacturers have had huge car recalls due to safety & performance issue. All of this hurts brand equity.
Additional slides follow to further elaborate on brand equity, brand ownership strategies and brand naming strategies.

15. Brand equity: awareness – Canadian
LO5
Brand equity: awareness – Canadian
Rank
Brand
Sector (2019) 1
Tim Hortons
Restaurant 2
Westjet
Transportation 3
McCain Foods
Foods 4
Canadian Tire
Retail 5
Jean Coutu Group 6
Shoppers Drug Mart 7
Bombardier Inc. 8
Saputo 9
TD Bank
Financial Services
Brand awareness measures how many consumers in a market are familiar with the brand & what it stands for, & have an opinion about that brand.
Brand awareness is also important for infrequently purchased items or items the consumer has never purchased before.
Marketers create brand awareness through repeated exposures of the various brand elements (name, logo, symbol, character, packaging or slogan) in the firm’s communications to consumers.
Exhibit 9.6 shows Canada’s 10 most valuable brands.
Remind students what they have learned about consumer behaviour. When consumers recognize a need, they begin with an internal search, during which they consider any brand they already know. If consumers are not aware of the brand, they simply will not purchase it.

16. Brand equity: awareness – international
LO5
Brand equity: awareness – international
Rank
Brand
Sector (2019) 1
Amazon
Information 2
Apple 3
Google 4
Microsoft 5
Visa
Financial Services 6
Facebook 7
Alibaba 8
Tencent 9
McDonalds
Food
Brand awareness measures how many consumers in a market are familiar with the brand & what it stands for, & have an opinion about that brand.
Brand awareness is also important for infrequently purchased items or items the consumer has never purchased before.
Marketers create brand awareness through repeated exposures of the various brand elements (name, logo, symbol, character, packaging or slogan) in the firm’s communications to consumers.
Exhibit 9.6 shows Canada’s 10 most valuable brands.
Remind students what they have learned about consumer behaviour. When consumers recognize a need, they begin with an internal search, during which they consider any brand they already know. If consumers are not aware of the brand, they simply will not purchase it.

17. Brand equity: perceived value
LO5
Brand equity: perceived value
Perceived value 13 19 23
Discussion question
First Choice Haircutters provides affordable, professional haircare, at a fraction of salon prices. Its customers perceive the chain to be a great value because the haircut is better than good & the price is more than reasonable.
How does First Choice Haircutters create value for customers?

18. Brand equity: brand associations
LO5
Brand equity: brand associations
- Mental Links -
Consumers make between a brand & its key product attributes such as the logo, slogan or famous personality.
Toyota Prius: economical, stylish, environmentally friendly
Volvo: safety
State Farm: ‘like a good neighbour’
Hallmark Cards: show you care with quality cards
Brand associations reflect the mental links that consumers make between a brand & its key product attributes, such as a logo, slogan or famous personality.
These brand associations often result from a firm’s advertising & promotion efforts.
Firms sometimes develop a personality for the brand – as if it were human.
Ask students what brands have personalities – they might mention McDonald’s and Pepsi (young).
Consumers develop links between brands and their own identity. Some brands are just “not for them.”
Ask students: How many of you proudly wear Abercrombie & Fitch clothing? How many choose never to wear this brand? How do you perceive this brand’s message?

19. Brand equity: brand loyalty
Consumers are often less sensitive to price
Marketing costs are much lower
Loyal customers praise the virtues of their favourite products, retailers or services
High level of brand loyalty insulates the firm from competition
Brand loyalty provides the firm with high value. It occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buying from multiple suppliers within the same category.
Brand loyalty exhibits characteristics as shown in the slide.
As an example, State Farm (insurance) has built their brand equity by having loyal customers over the many years that they have been offering insurance services.
Ask students: Once you have chosen an insurance company or a bank, how likely is it that you will switch? How likely is it that you will switch due to an increase in price? Is it important for the firm to spend a lot of money marketing to you, a loyal customer? Do you pay much attention to ads or direct mail pieces from competition?
To further illustrate brand loyalty, ask students: would you leave a store if your particular brand were not in stock? When you order a Sprite in a restaurant and the server asks, “Is 7-Up okay?” do you say no?

20. Branding strategies: brand ownership
LO6
Branding strategies: brand ownership
Firms employ a variety of brand-related strategies to create & manage key brand assets, such as the decision to own the brands, establishing a branding policy, extending the brand name to other products & markets, co-operatively using the brand name with that of another firm, & licensing the brand to other firms.
Unlike Europe, where store brands such as Tesco (U.K. grocery chain) were extremely popular, in the United States, few store brands had achieved such status and were often considered inferior to manufacturer or national brands. In Canada, many store brands are well established, such as Kenmore, Mastercraft and Presidents’ Choice.
Manufacturer brands are brands that are owned & managed by the manufacturer.
Private-label brands , also called store brands, house brands , or own brands , are products developed by retailers. Some manufacturers prefer to make only private-label merchandise because the costs of developing and marketing a manufacturer’s brand are prohibitive.
Generic brands are those that are sold without a brand name, typically in commodities markets.

21. Naming brands and product lines
LO6
Naming brands and product lines
Firms use several very different strategies to name their brands & product lines as shown in Exhibit 9.9.
Although there is no simple way to decide how to name a brand or a product line, the more the products vary in their usage or performance, the more likely it is that the firm should use individual brands.
Branding exists on multiple levels, and firms choose strategically how to brand their products. The names they assign their products reflect this strategic choice. Marriott gives its individual brands unique names, all tied together by the phrase “by Marriott,” like Fairfield Inns by Marriott.
Corporate brands: use its own corporate name (e.g. General Electric)
Family brands: use a combination of the company brand name & individual brand name (e.g. Kellogg’s Corn Flakers)
Individual brands: use of individual brand names for each of a firm’s products (e.g. Tide)
Ask students: What is the benefit of this type of naming strategy?

22. LO6
Choosing a name
Should be descriptive & suggestive of benefits & qualities of the product
Easy to pronounce, recognize, remember
Register as a trademark & protect it legally
Easy to translate
What’s in a name? Well quite frankly – everything!
When it comes to naming new products, companies should consider the desirable qualities as noted in the slide.
Backwoods Brewery in Vancouver has sold its beer to local restaurants and bars for a decade. Taking note of whacky wine names like Fat Bastard and Cat’s Pee on a Gooseberry Bush, the company recently rebranded its beer as Dead Frog. The goal was to create a fun name in a category that has been very conservative. “Dead Frog”, while irreverent, is memorable and appeals to a younger demographic.
Did you also know that Blackberry (Research in Motion) considered naming the Blackberry phone, PocketLink, & strawberry!

23. Brand extension - benefits
LO6
Brand extension - benefits
Use of the same brand name for new products.
Well established name
Perception of high quality carries over
Lower marketing costs
Synergy among complementary products
Boost sales of the core brand
Extending the equity of a brand to new products makes sense sometimes. But with over 30 (and counting) Oreo extensions created over the years—not including the infamous Oreo Fun Barbie doll licensed to Mattel—you have to wonder just how relevant the exposure is and is the consumer marketplace flat out oversaturated?
Ask students: What are the advantages of a brand extension?
They should reply that the firm can spend less on brand awareness. That the positive consumer acceptance will spread to the new product and a synergy exists between the two products. In the picture above one might use the crest toothpaste and floss together.

24. Brand extension – negative consequences
LO6
Brand extension – negative consequences
Use of the same brand name for new products.
Core brand & new extension may not ‘fit’ well together
Brand associations between the two may not be similar
Too many extensions results in brand dilution
Ensure the brands can be distanced from one another if need be -
To prevent the potentially negative consequences of brand extensions, firms should consider the points as noted in the slide.

25. LO6
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?
Not all brand extensions are successful. Some can dilute brand equity.
Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold.
A brand is only as good as its last extension. Many firms try to take their brands just one more step, only to find the extension hurts rather than helps the parent brand. For example, McDonald’s agreed to license a McKids line of clothing, but the line was not as successful as it had hoped it would be.
Ask students: In terms of this slide, what do you think McDonald’s did wrong?

26. Two or more brands together
LO6
cobranding
Two or more brands together
on the same package or
promotion.
Cobranding is the practice of marketing two or more brands together, on the same package or promotion.
Primarily because of credit card companies, such as Visa & MasterCard, the practice has greatly increased in the past decade.
Airlines were among the first to cobrand with credit card companies.
As noted in the slide, the cobranding of restaurants/food establishments is popular.
Cobranding benefits the participating brands by attracting the consumers of one brand to the others.
Example: FedEx/Kinko’s - the synergy between these two brands helped ensure a successful cobranding effort.
There are also risks to cobranding, especially when the customers for each of the brands are vastly different.

27. Brand licensing Lacoste Founded in 1933 by David Lacoste
LO6
Brand licensing
Lacoste
Founded in 1933 by David Lacoste
Still sold in stores today
Harley Davidson
ConAgra recently introduced Harley Davidson Beef Jerky into the $2.7 billion per year beef snack category
The product will be sold in convenience stores and in Harley Davidson dealerships
Canadian Tire/Nascar
official automotive retailer of NASCAR in Canada
Brand licensing is a contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, characters in exchange for a negotiated fee.
This is a common practice for toys, apparel, accessories & entertainment products such as video games.
The Lacoste brand is an early example of licensing when David Lacoste, a famous tennis player known as “the alligator” licensed his name to a shirt manufacturer.
Think about the products that feature the Lacoste alligator or the Harley-Davidson logo. NASCAR has recently licensed Canadian Tire to produce a range of products for the automotive aftermarket such as NASCAR batteries and windshield wiper fluid.
Ask students: Why can these brands be extended in so many directions?
Answer: These brands have a strong mystique and a loyal following, and are therefore likely to buy their brand extensions.
There is however risk in licensing, namely, the dilution of the brand equity through overexposure of the brand, especially if the brand name & characters are used inappropriately.

28. packaging An important brand element with physical benefits. LO7
Although often overlooked as a marketing tool, packaging helps determine the success of a product.
The chapter covers many new packaging innovations including : stand-up, reclosable zipper pouches, aluminum beverage cans, aseptic packaging such as Tetra Pak, child-resistant/senior friendly packages, green & biodegradeable packaging.
In some instances, such as Coca-Cola or Aunt Jemima Maple Syrup, the package has become synonymous with the brand.
Ask students: What packages are so distinct that it helps make the brand successful? Possible answers are: Perrier, Tiffany’s turquoise box , Apple products. See if you can bring in examples of other bottled water in unusual bottles such as Fuji and Fred.
Weston Bakeries and William Neilson are the first consumer products marketers to be awarded the distinction of displaying the ParticipACTION logo and website on their packaging. Weston will use the ParticipACTION symbol across Canada (excluding Quebec) on Wonder+ bread products. Neilson Dairy will feature the symbol on its 1% and 2% four-litre bagged milk products in Ontario.

29. Using packaging to create value
LO7
Using packaging to create value
How can firms use packaging to create value for the firm and excitement for customers?
This slide sets up the Case in Point that follows.

30. Case in Point: Diamond Shreddies
LO7
Case in Point: Diamond Shreddies
To find a way to rejuvenate sales and interest in a brand viewed by consumers as stale and boring.
Challenge
Answer
Results
A marketing campaign introduced “new “ Diamond Shreddies. The cereal itself was unchanged except for the packaging.
This is an excellent example of how packaging can rejuvenate a mature brand.
To show images of Old and New Shreddies boxes, click on link in slide title and scroll down on the page to show the image.
Diamond Shreddies Old (Boring) New (Exciting) photo source:
Sales increased 18 percent in test markets in Alberta.

31. LO7
labelling
Labels on products & packages provide information the consumer needs for his or her purchase decisions & consumption of the product.
In that they identify the product & brand, labels are also an important element of branding & can be used for promotion.
Label information is determined by regulations, and labelling rules vary from country to country. Certain terms convey specific meanings, such as “natural,” “organic,” “made in Canada,” and products must meet specific tests before placing such terms on their label.
Many labelling requirements stem from various laws including the Competition Act & the Food and Drug Act.
Group activity: Look at the label of a snack or drink you may have brought to class. What information does it provide? How does it support the marketing of this item? Do you feel any of it is misleading (e.g. low fat?)

32. Ethical dilemma 9.1: “video girl” barbie brings girls to foursquare
LO7
Ethical dilemma 9.1: “video girl” barbie brings girls to foursquare
Barbie enters the world of technology
Barbie Video Girl doll that has a tiny video camera in her necklace that can record up to 25 minutes of video
She’s also a celebrity FourSquare user that uses social networking sites
Have the lines between play & advertising been blurred?
Barbie has now entered into the world of technology, which includes online media.
The latest Video Girl doll has a tiny video in her necklace, an LCD screen on her back, & editing software tucked inside.
The new doll can record up to 25 minutes of video that can be downloaded to computers with a pink USB cable.
She’s also now a celebrity FourSquare user that keeps in touch via networking websites.
But have Mattel’s initiative blurred the lines between play & advertising?
However, advocacy groups such as the Coalition for a Commercial-Free Childhood object to the blurring of play & purchasing, especially as the industry reaches into children’s lives with everywhere, anytime digital & mobile formats.
There are calls to protect children from unauthorized use of online tracking mechanisms.
Ask students: do you feel lines are being crossed here, especially as related to advertising directly to children? How can this be controlled more and should it be?