Chapter 11: Product, Branding, and Packaging Decisions

Objectives:

• Describe the components of a product,
• Identify the types of consumer products,
• Explain the difference between the product mix's breadth and a product line's depth,
• Identify the advantages that brands provide firms and consumers,
• Explain the various components of brand equity,
• Determine the various types of branding strategies used by firms,
• Distinguish between brand extension and line extension,
• Indicate advantages of a product's packaging and labeling strategy.

I. Complexity and Types of Products

Products: Anything that is of value to a customer and can be offered through a voluntary marketing exchange.

Core Customer Value: The basic problem solving benefits that consumers are seeking.

Actual Product: The physical attributes of a product including the brand name, features/design, quality level, and packaging.

Associated Services: (Augmented Product) The non-physical attributes of the product including product warranties, financing, product support, and after-sale service. 

• Types of Products
• Consumer Products: Products and services used by consumers for their personal use. 
• Specialty Products/Services: Products and services for which a customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers.
• Shopping Products/Services: Those for which consumers will spend time comparing alternatives, such as apparel, fragrances, and appliances.
• Convenience Products/Services: Those for which the consumer is not willing to spend any effort to evaluate prior to purchase.
• Unsought Products/Services: Products or services consumers either do not normally thinkk of buying or do not know about.

II. Product Mix and Product Line Decisions

Product Mix: The complete set of products offered by a firm.

Product Lines: Groups of associated items, such as those that consumers use together or think of as part of a group of similar products.

Breadth: Number of product lines offered by a firm; also known as variety.

Depth: The number of categories within a product line.

• Increase Depth: to address changing consumer preferences or preempt competitors while boosting sales. 
• Decrease Depth: to realign firms resources. 
• Increase Breadth: To capture new or evolving markets to increase sales. 
• Decrease Breadth: to address changing market conditions or meet internal strategic priorities. 

III. Branding

"A company lives or dies based on brand awareness. Consumers cannot buy products that they do not know exist."

• Value of Branding for the Consumer
• Brands Facilitate Purchases: usually signify quality level of product or service and therefore help consumer make quick decisions. 
• Brands Establish Loyalty: Over time and use, consumers build trust in brands quality and value added.
• Brands Protect from Competition and Price Competition: Loyalty established create a protective nature from competitors and competitors pricing levels. 
• Brands are Assets: Can be legally protected by trademarks and copyrights and thus constitute a unique form of ownership. 
• Brands Affect Market Value: Having a well know brand can have a direct effect on a firm's bottom line. 
• Brand Equity for the Owner: The set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or the service. 
• Brand Awareness: Measures how many consumers are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements ( brand name, logo, symbol, character, packaging, or slogan) in the firm's communications to the consumer. 
• Perceived Value: The relationship between a product's or service's benefits and its costs. 
• Brand Associations: The mental links that consumers make between a brand and its key product attributes; can involve a logo, slogan, or famous personality.
• Brand Loyalty: 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. 

IV. Branding Strategies

• Brand Ownership
• Manufacturer Brands: (national brands) Brands owned and managed by the manufacturer. 
• Retail/Store Brands: Also called private-label brands, are products developed by retailers.
• Naming Brands and Product Lines
• Family Brands: A firm's own corporate name used to brand it product lines and products.
• Individual Brands: The use of individual brand names for each of a firm's products.
• Brand Line Extensions
• Brand Extension: The use of the same brand name for new products being introduced to the same or new market.
• Line Extension: The use of the same brand name within the same product line and represents an increase in a product line's depth.
• Brand Dilution: Occurs when a brand extension adversely affects consumer perception about the attributes the core brand is believed to hold. 
• Co-Branding: The practice of marketing two or more brands together, on the same package or promotion.
• Brand Licensing: A contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee. 
• Brand Repositioning: (rebranding) A strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences. 

V. Packaging

Primary Package: The packaging the consumer uses, such as the toothpaste tube, from which he or she typically seeks convenience in terms of storage, use, and consumption.

Secondary Package: The wrapper or exterior carton that contains the primary package and provides the UPC Label used by retailer scanners; can contain additional product information that may not be available on the primary package.

• Product Labeling: Provide information the consumer needs for his or her purchase decision and consumption of the product. Many labeling requirements stem from various laws, used to protect the consumer from consuming goods against their lifestyle choices. It is a communication tool.