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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 9:Product, Branding, and Packaging Concepts
Pride/FerrellFoundations of MarketingFourth Edition
Prepared by Milton PressleyUniversity of New Orleans
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Objectives1. Understand the concept of a product and how
products are classified.2. Explain the concepts of product item, product line,
and product mix, and understand how they are connected.
3. Understand the product life cycle and its impact on marketing strategies.
4. Describe the product adoption process.5. Explain the value of branding and the major
components of brand equity.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Objectives6. Recognize the types of brands and how they are
selected and protected.7. Identify two types of branding policies, and explain
brand extensions, co-branding and brand licensing.8. Describe the major packaging functions and design
considerations and how packaging is used in marketing strategies.
9. Understand the functions o labeling and selected legal issues.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Decisions
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What Is a Product?• A Product Defined
– A good, a service, or an idea received in an exchange
– Tangible or intangible or a combination• products vs services
– Functional, social, and psychological utilities or benefit
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What Is a Product?
What is a Product?
A product can be a service, and idea, goods, or a combination of these. The Houston Museum of Natural Science provides a service.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Question• The Houston
Museum of Natural Science provides a service. Does it also provide products and/or ideas?
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Consumer Products• Product purchased to satisfy personal and
family needs - Consumer product categories: Convenience products: inexpensive and frequently purchased
Shopping products: buyers willing to expend considerable effort in planning and making the purchase
Specialty products: possess one or more unique characteristics and buyers are willing to expend considerable effort to obtain them
Unsought products: purchased when a sudden problem must be solved, customers are unaware of them and do not usually think of purchasing them
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Classifying Products
Convenience Product and Shopping Product
An ice cream bar is a convenience product. Hotels are shopping products.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Question• Click on the Television below, watch the
commercial, and then discuss whether dining at Ruth’s Chris Steakhouse is a convenience, shopping, specialty, or unsought product.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Business Products• Products bought to use in an organization’s
operations, to resell, or to make other products – Installations - facilities & non-portable equipment– Accessory equipment - not part of final product– Raw materials - natural materials part of product– Component parts - finished items ready for assembly or
need little processing– Process materials -used in production but not identifiable– MRO supplies -maintenance, repair, and
operating items not part of final product– Services - intangible products in operations
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Classifying Products
Business Product
New Holland equipment is a business product designed for use by business customers.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Line and Product Mix• Product item - a specific version of a product that can be designated as a
distinct offering among a firm’s products• Product line - a group of closely related product items viewed as a unit
because of marketing, technical or end-use considerations• Product mix - the total group of products that an organization makes available
to customers• Width of product mix - the number of product lines a company has• Depth of product mix - the average number of different product items offered in each
product line
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Concepts of Product Mix,
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Product Line
Product Line and Product Mix
This Hilton ad shows a number of Burberry’s product lines.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Question
Which of these ads shows the company’s product mix? Which shows a product line?
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Life Cycle: Introduction• The initial stage of a product’s life cycle—its first
appearance in the marketplace—when sales start at zero and profits are negative
• Risk of failure high• Buyers must be made aware of:
– Features– Uses– Advantages
• Sellers lack– Resources– Technological knowledge– Marketing know-how
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Life Cycle: Growth• The stage of a product’s life cycle when sales
rise rapidly and profits reach a peak and then start to decline– More competitors enter the market– Product pricing is aggressive– Brand loyalty becomes important– Gaps in market coverage are filled– Promotion expenditures moderate– Production efficiencies lower costs
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Life Cycle: Maturity• The stage of a product’s life cycle
when the sales curve peaks and starts to decline and profits continue to fall– Intense competition– Emphasis on improvements and differences in competitors’
products– Weaker competitors lose interest and exit the market– Advertising and dealer-oriented promotions predominate– Distribution sometimes expands to the global market
• Strategic objectives for maturity stage– Generate cash flow– Maintain market share– Increase share of customer
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Life Cycle: Decline• The stage of a product’s life cycle when sales
fall rapidly– Pruning items from the product line– Cutting promotion expenditures– Eliminating marginal distributors– Planning to phase out the product
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Life Cycle
Product Life CycleNotebook computers are in the maturity stage of the product life cycle.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Most New Products Have Their Skeptics
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Adoption Process• The five stages of the product adoption
process:1. Awareness: buyer becomes aware of the product2. Interest: the buyer seeks information and is
receptive to learning about the product3. Evaluation: the buyer considers the product’s
benefits and decides whether to try it4. Trial: the buyer examines, tests, or tries the product
to determine if it meets his or her needs5. Adoption: the buyer purchases the product and can
be expected to use it again whenever the need for this general type of product arises
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Adopter Categories• Innovators - first adopters of new products• Early adopters - careful choosers of new products• Early majority - those adopting new products just before the average person• Late majority - skeptics who adopt new products when they feel it is necessary• Laggards - the last adopters who distrust new products
Consumers fall into one of five major categories:
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution of Product Adopter
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Branding• Brand–A name, term, design, symbol,
or other feature that identifies a seller’s products and differentiates them from competitors’ products.– Corvette, Chevrolet, General Motors
• Brand Name–The part of a brand that can be spoken, including letters, words, and numbers– Union 76, NBA, 49’ers
• Brand Mark–Part not made up of words, such as a symbol or design– Nike swoosh, Mercedes star,
McDonald’s arches• Trademark–legal designation of
exclusive use of a brand• Trade name–full legal name of
organizationBrand Mark The red and white target is the brand mark for Target stores.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Value of Branding• To Buyers
– Helps speed consumer purchases by identifying specific preferred products
– Provides a form of self-expression and status– Evaluates product quality to reduce the risk of
purchase• To Sellers
– Identifies and differentiates a firm’s products from competing products
– Helps in the introduction of new products– Facilitates the promotion of all same-brand
products– Fosters the development of brand loyalty
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Brand Loyalty
• A customer’s favorable attitude toward a specific brand.– Recognition: aware brand exists and is
alternative if preferred brand unavailable– Preference: preferred over competitive
offerings– Insistence: strongly preferred, no
substitute
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Brand Equity
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Branding
Stimulating Brand Association Geiko uses the gecko as its trade character to stimulate
favorable brand associations.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Top Ten Most Valuable Brands in
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Most Valuable Non-Profit Brands
OrganizationBrand Value $
Million
YMCA of the USA 6,394
Salvation Army 4,703United Way of America 4,517American Red Cross 3.146Goodwill Industries International 2,535Catholic Charities USA 2.361Habitat for Humanity International 1,768American Cancer Society 1,360The Arc of the United States 1,224Boys & Girls Clubs of America 1,168
Source: http://www.coneinc.com/stuff/contentmgr/files/0/b2b4cb81b5be7de19ddfd5bb1c5e9711/files/cone_top_100_chart.pdf (Accessed 9/14/2009)
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Types of Brands• Manufacturer
– Brands initiated by producers– Green Giant, IBM, Levis
• Private Distributor– Brands initiated and owned by
resellers– Sears’ Kenmore
• Generic– Do not include the company name or
other identifying terms– Aspirin
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Protecting a Brand• Brands should be designed to that it can be
protected easily through registration
Protecting a Brand: Companies try to protect their brands by using certain phrases and symbols in their advertisements. Note the term “brand” after Ziploc, and the use of the ® symbol
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Selecting a Brand Name• The name should
– be easy to say, spell, and recall.– indicate the product’s major benefits.– suggest the product’s major uses and
special characteristics.– be distinctive, setting it apart from
competing brands.– be compatible with all products in line.– be designed for use and recognition in all
types of media.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What would you name a chocolate
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Protecting a Brand• Degree of Brand
Protection Through Registration
– Fanciful
– Arbitrary
– Suggestive
– Descriptive
– Generic
• Surnames and descriptive, geographic, or functional names are also difficult to protect.
• Registration with the U.S. Patent and Trademark Office protects a brand for ten years with indefinite renewals.
Most
Least
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Branding Policies, Extensions • Branding Policies
- Individual branding: a policy of naming each product differently
- Family branding: branding all of a firm’s products with the same name
• Brand Extensions - using an existing brand to brand a new product• Co-Branding - using two or more brands on one product
Co-BrandingLunchables is a co-branded item consisting of
Oscar Mayer and Kraft products.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Brand Licensing
• Brand licensing - an agreement whereby a company permits
another organization to use its brand on other products for a licensing fee
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Packaging• Involves the development of a container and a graphic
design for a product• Packaging Functions
– Protect the product from damage– Offer convenience to consumers– Prevent waste and make storage easier– Promote the product by communicating its features, uses,
Convenience Packaging
Some companies compete by
designing packages that are
convenient to use.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Packaging and Marketing Strategy
• Altering the Package• Secondary-Use Packaging• Category-Consistent Packaging• Innovative Packaging• Multiple Packaging• Handling-Improved Packaging
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Major Packaging Considerations• Cost• Tamper-resistant• Design consistency
– Family Packaging• Promotional Role
– Verbal and nonverbal symbols– Size, shape, texture, color, and graphics
• Reseller Needs• Environmentally responsible• RFID
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Criticisms of Packaging• Not functional• Safety issues• Deceptive• Excessive cost
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Labeling
• Providing identifying, promotional, or other information on package labels
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Labeling• Providing identifying, promotional, legal,
or other information on package labels– Help identify the product– Support promotional efforts for the
product– Provide legally required labeling
information– Provide information on
product origin
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Perceived Quality and Value of
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
After Reviewing This Chapter You Should:
1. Understand the concept of a product and how products are classified.
2. Be able to explain the concepts of product item, product line, and product mix, and understand how they are connected.
3. Understand the product life cycle and its impact on marketing strategies.
4. Know how to describe the product adoption process.5. Be able to explain the value of branding and the
major components of brand equity.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
After Reviewing This Chapter You Should:
6. Recognize the types of brands and how they are selected and protected.
7. Be able to identify two types of branding policies, and to explain brand extensions, co-branding, and brand licensing.
8. Know the major packaging functions and design considerations and how packaging is used in marketing strategies.
9. Understand the functions o labeling and selected legal issues.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Key Concepts• Good• Service• Idea• Consumer products• Business products• Convenience products• Shopping products• Specialty products• Unsought products• Installations• Accessory equipment• Raw materials• Component parts• Process materials• MRO supplies
• Product item• Product line• Product mix• Width of product mix• Depth of product mix• Product life cycle• Introduction stage• Growth stage• Maturity stage• Decline stage• Product adoption process• Innovators• Early adopters• Early majority• Late majority• Laggards
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Key Concepts (cont’d)• Brand• Brand name• Brand mark• Trademark• Trade name• Brand equity• Brand loyalty• Brand recognition• Brand preference• Brand insistence