Chapter 10 MKT120 Branding and Pkg


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  • These are the learning objectives for this chapter.
  • Ask students: How many have purchased Air Jordan? Why did you purchase them? How did you feel about the price? The answer is in the mystique of the brand and the talent of Michael Jordan rubbing off on the wearer of the shoe. This web link brings you to the Nike microsite for Air Jordan…ask students how the internet reinforces the strong branding. They should note the interaction with the brand makes the associations and equity stronger for the consumer and the marketer.
  • This chapter uses Colgate-Palmolive brands as examples. Many students may be familiar with the names Colgate and Palmolive but not know they have so many other products.
  • Students should understand that each item is called a stock keeping unit (SKU) and the category depth is the number of SKUs within a category.
  • 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.
  • 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.
  • It increases depth by adding one more scent. This is type of ad depicts both research and advertising.
  • Group activity : Have students choose a service. Have them describe how they would change the breadth, depth, and # of services (SKUs) of the assortment. A bank could extend the breadth of its product line to include financial services, insurance, online banking, credit cards, and so forth .
  • Brand identification takes many forms. Ask students: H ow 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 : 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 .
  • 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.
  • This clip looks at the history of advertising and how the industry has matured over time.
  • Brand equity cuts both ways; customers dislike some brands because of the firm’s actions or their negative perceptions. Nike has been the target of many labor activists, which causes some consumers to refuse to purchase or wear Nike products. Remind students what they have learned about consumer behavior. 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.
  • These retailers offer designer products at reduced prices. In some cases, they use well known designers for their lines of clothing.
  • In this billboard ad Kristen Davis, Charlotte from “Sex in the City”, offers her classical good looks to reflect the brand personality of Weatherproof outerwear. 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?
  • Brand loyalty provides the firm with high value. State Farm has built their brand equity by having loyal customers. 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?
  • 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. Today, many store brands are well established, such as Kenmore, Charter Club, and Presidents’ Choice.
  • 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.
  • Examples of these and several other exclusive cobrands you might recognize are found in Exhibit 10.4.
  • Ask students: Name a firm that uses a corporate or family brand? A corporate and product line brand? Individual lines? Family brands include Heinz and Del Monte. Detergents are good examples of firms using individual brands: Tide, Bold, Gain and Surf.
  • 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. This web link is to the State Farm Website. You can see from the Website that State Farm has extended their brand past insurance to include mutual funds and banking products.
  • 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? They should comment that this was not a great fit. That the perceptions might not have been of the highest quality.
  • Co-branding benefits the participating brands by attracting the consumers of one brand to the others. Remind students of the FedEx/Kinko’s example. The synergy between these two brands helped ensure a successful co-branding effort.
  • 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.
  • The product is now positioned as a detergent and an air freshener.
  • Although often overlooked as a marketing tool, packaging helps determine the success of a product. The chapter covers many new packaging innovations including FlexCan, Daily Gloss, smart lids, Labatt blue, aseptic drink bottles, and snack and seal as seen in the ad above. 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, Altoids, and Tiffany’s turquoise box . See if you can bring in examples of other bottled water in unusual bottles such as Fuji and Fred.
  • Label information is determined by regulations, and labeling rules vary from country to country. Certain terms convey specific meanings, such as “natural,” “organic,” “made in the USA,” and products must meet specific tests before placing such terms on their label. 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?
  • This clip examines Apple’s strategy of venturing into new markets and diversifying their product line.
  • Ans. A Explanation: Colgate-Palmolive has five product lines and varying numbers of product categories within each product line.
  • Breadth (sometimes also referred to as variety) represents the number of product lines offered by the firm; Product line depth, in contrast, is the number of categories within a product line. To capture new or evolving markets, increase sales, and compete in new venues. address changing market conditions or meet internal strategic priorities. To address changing consumer preferences or preempt competitors while boosting sales, to realign resources.
  • Ans. A Explanation: Marketers die a painful death when they see or hear about their celebrity spokespeople engaging in activities that harm the company and the brand equity they have accumulated.
  • Brands facilitate the consumer search process are valuable in a legal sense, can lead to lower marketing costs because the brand and its associations help sell the product and brands have real market value as a company asset. Brand awareness, perceived value, brand associations, and brand loyalty.
  • Ans. E Explanation: Brand extension provides many benefits to marketers which is why firms frequently use the same brand for new products.
  • Manufacturer brands are owned and managed by the manufacturer. The manufacturer develops the merchandise, produces it to ensure consistent quality, and invests in a marketing program to establish an appealing brand image. Private-label brands are products developed by retailers. Generic brands are a type of private brand that targets a price-sensitive segment by offering a no-frills product at a discount price. Co-branding is the practice of marketing two or more brands together, on the same package or promotion. Advantages of brand extensions: Because the brand name is already well established, the firm can spend less in developing consumer brand awareness and brand associations for the new product. Second, if either the original brand or the brand extension is has strong consumer acceptance, that perception will carry over to the other product. Finally, when brand extensions are used for complementary products, a synergy exists between the two products that can increase overall sales. A disadvantages is brand dilution which occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold.
  • Ans. E Explanation: Most consumers think of brands as names, logos, symbols, characters, slogans, and jingles. Packaging is sometimes the least recognized but an effective form of branding.
  • Chapter 10 MKT120 Branding and Pkg

    1. 1. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
    2. 2. Learning Objectives LEARNING OBJECTIVES How do firms adjust their product lines to changing market conditions? Why are brands valuable to firms? How do firms implement different branding strategies? How do a product’s packaging and label contribute to a firm’s overall strategy? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-2
    3. 3. Air Jordan• Moved beyond athletic endorsement to creation of entire line• NBA fees fueled interest• Priced at $125 Nike/Air Jordan Website © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-3
    4. 4. Product Assortment and Product Line Decisions© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-4
    5. 5. Product Assortment and Product Line Decisions© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-5
    6. 6. Change Product Mix Breadth• Increase Breadth – True Religion Brand Jeans now are a lifestyle brand with apparel, belts, swimwear and fragrances• Decrease Breadth – Due to competitive changes, TCBY is now focusing on Yogurt. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-6
    7. 7. Change Product Mix Depth Increase Depth − Band-Aid now has over 40 products to heal cuts. Decrease Depth − McCormick spices eliminates dozens of products each year. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-7
    8. 8. Product Line Decisions How is this changing the product mix? Does it increase breadth or depth? Is this research or advertising? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-8
    9. 9. Product Line Decisions for ServicesThe same types of decisions can be used for servicesThe same types of decisions can be used for services © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-9
    10. 10. BrandingA brand can use: Name, logo symbols, characters,A brand can use: Name, logo symbols, characters, slogans, jingles and even distinctive packages. slogans, jingles and even distinctive packages. Oscar Meyer Commercial © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-10
    11. 11. What Makes a Brand?© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-11
    12. 12. Value of Branding for the Customer and the Marketer© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-12
    13. 13. History in Advertising© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-13
    14. 14. Brand Equity: Awareness© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-14
    15. 15. Brand Equity: Perceived Value How do discount retailers like Target, T.J. Maxx, and H&M create value for customers? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-15
    16. 16. Brand Equity: Brand Associations © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-16
    17. 17. Brand Equity: Brand Loyalty Consumers are often less sensitive to price Marketing costs are much lower Firm insulated from the competition © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-17
    18. 18. Brand Ownership© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-18
    19. 19. Brand Ownership© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-19
    20. 20. Brand Ownership© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-20
    21. 21. Naming Strategies Corporate or family  Individual lines brand − The Gap − Mr. Clean (Proctor & Corporate and product Gamble) line brands − Kellogg’s Corn Flakes © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-21
    22. 22. Brand Extension State Farm Website© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-22
    23. 23. Brand Dilution© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-23
    24. 24. Co-branding© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-24
    25. 25. Brand Licensing© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-25
    26. 26. Brand Repositioning How is this repositioning? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-26
    27. 27. Packaging What other packaging do you as a consumer find useful? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-27
    28. 28. Product Labeling© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-28
    29. 29. iPod Anticipation© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-29
    30. 30. Within each product line, there are often multiple:A. product categories.B. primary packaging parts.C. product breadth.D. product assortment.E. private label brands. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-30
    31. 31. Check Yourself 1. Why change product line depth? 2. What is the difference between product line breadth versus depth? 3. Why change product line breadth?© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-31
    32. 32. One of the dangers of hiring celebrities like Mel Gibson to endorse acompany’s products is that when they engage in embarrassing behavior, to thedegree that they are associated with the company’s brands, their actions hurt: A. brand equity. B. brand awareness. C. brand recognition. D. corporate brand category depth. E. all of the above. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-32
    33. 33. Check Yourself 1. How do brands create value for the customer and the firm? 2. What are the components of brand equity?© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-33
    34. 34. Which of the following is a potential benefit of brand extension?A. It allows the perception of a brand with a quality image to be carried over to the new product.B. It lowers marketing costs.C. It can boost sales of the core brand.D. The firm can spend less on creating brand awareness and associations.E. all of the above. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-34
    35. 35. Check Yourself 1. What is the difference between manufacturer, private/label, and generic brands? 2. What is co-branding? 3. What are some advantages and disadvantages of brand extensions?© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-35
    36. 36. Chianti that comes in wicker-clad bottles and tortillas that come in zip lockbags are examples of brand _____________ that differentiate these companies’ products from their competitors’ offerings. A. names B. slogans C. symbols D. characters E. packaging © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-36
    37. 37. GlossaryA brand association reflects the mental links that consumers make between a brand and its key product attributes, such as a logo, slogan, or famous personality. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-37
    38. 38. GlossaryBrand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-38
    39. 39. GlossaryBrand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-39
    40. 40. GlossaryA brand extension refers to the use of the same brand name for new products being introduced to the same or new markets. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-40
    41. 41. GlossaryBrand licensing is a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-41
    42. 42. GlossaryBrand loyalty occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buy from multiple suppliers within the same category. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-42
    43. 43. GlossaryBrand repositioning or rebranding refers to 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. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-43
    44. 44. GlossaryCo-branding is the practice of marketing two or more brands together, on the same package or promotion. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-44
    45. 45. GlossaryPerceived value of a brand is the relationship between a product or service’s benefits and its cost. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-45
    46. 46. GlossaryProduct assortment or product mix is the complete set of all products offered by a firm. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-46
    47. 47. GlossaryProduct lines are groups of associated items, such as items that consumers use together or think of as part of a group of similar products. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-47
    48. 48. GlossaryProduct mix or product assortment is the complete set of all products offered by a firm. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-48