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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.
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11-2
LEARNING OBJECTIVES
LO 11-1 Describe the components of a product.LO 11-2 Identify the types of consumer products.LO 11-3 Explain the difference between a product
mix’s breadth and a product line’s depth.LO 11-4 Identify the advantages that brands
provide firms and consumers.LO 11-5 Explain the various components of brand
equity.LO 11-6 Determine the various types of branding
strategies used by firms.LO 11-7 Distinguish between brand extension and
line extension.LO 11-8 Indicate the advantages of a product’s
packaging and labeling strategy.
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11-3
Complexity of Products
Michael Blann/Digital Vision/Getty Images
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11-4
Types of Products
Customers show such a strong preference that they will expend considerable effort to search.
Wedding GownsCollege Apparel
Antiques
Consumer is willing to spend minimum effort to evaluate prior to purchase.
Can goodsShampoo
Candy
Consumers will spend a fair amount of time comparing alternativesShoes
AppliancesCellphones
Consumers either do not normally think of buying or do not know about.
Fire extinguishers
DictionaryMedical supplies
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check yourself
11-5
1.Explain the three components of a product.
2.What are the four types of consumer products?
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11-6
Product Mix and Product Line Decisions
Source: Kellogg’s 2010 annual report, http://annualreport2010.kelloggcompany.com/innovation.htm.
Product Lines
Ready-to-Eat Cereal
Toaster Pastries andWholesome Portable Breakfast Snacks
Cookies and Crackers
Natural, Organic, and Frozen
Kellogg’s Corn FlakesAll-BranApple JacksCocoa KrispiesFrosted Mini-WheatsMueslixKellogg’s Raisin BranFroot LoopsKashiSpecial KRice Krispies
Nutri-GrainSpecial KKashiPop-TartsBear Naked
Cheez-ItKeeblerTownhouseClubFamous AmosFudge ShoppeMurray
EggoMorningstar FarmsKashi
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11-7
Product Mix and Product Line Decisions
Breadth
• Number of product lines
Depth
• Number of categories within a product line
Courtesy Pepsi Cola Company
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check yourself
11-8
1.What is the difference between product line breadth versus depth?
2.Why change product line breadth?
3.Why change product line depth?
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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)
Cou
rtesy
Merc
ed
es-
Ben
z U
SA
, LL
C;
Merk
ley &
Part
ners
/New
York
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11-10
What Makes a Brand?
Branding
Brand name
URLs
www.eBay.com
Logos and symbols
Characters
Slogans
Jingles/Sounds
“Law & Order”
McG
raw
-Hill
C
om
panie
s, Inc.
©M. Hruby.
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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
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11-12
Brand Equity: Brand Awareness
Source: From interbrand.com, http://www.interbrand.com/best_global_brands.aspx. Reprinted with permission.
2011 Rank Brand
Country ofOwnership
2011 Brand Value
($ Billions)
1 Coca-Cola U.S. 71.8
2 IBM U.S. 69.9
3 Microsoft U.S. 59.1
4 Google U.S. 55.3
5 GE U.S. 42.8
6 McDonald’s U.S. 35.6
7 Intel U.S. 35.2
8 Apple U.S. 33.5
9 Disney U.S. 29.0
10 Hewlett-Packard U.S. 28.5
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11-13
Brand Equity: Perceived Value
• How do discount retailers like Target, T.J. Maxx, and H&M create value for customers?
Photo by Peter Kramer/Getty Images
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11-14
Brand Equity: Brand Associations
©McGraw-Hill Companies Inc/Gary He, photographer
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11-15
Brand Equity: Brand 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
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check yourself
11-16
1.How do brands create value for the customer and the firm?
2.What are the components of brand equity?
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11-17
Brand Ownership
Manufacturer brands or
national brands
Private-label brands or Store Brands•Premium•Generic•Copycat•Exclusive co-branded
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11-19
Brand Dilution
Evaluate the fit betweenthe product classof 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?
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11-20
Zite: Personalized Magazine
Co-branding
©M Hruby
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11-21
Brand Licensing
Photo by D. larke Evans/NBAE via Getty Images.
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check yourself
11-22
1.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?
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11-23
Packaging
• What other packaging do you as a consumer find useful?
©M. Hruby.
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11-24
Product Labeling
©The McGraw-Hill Companies, Inc/Elite Images
C Sherburne/PhotoLink/Getty Images