Chapter 9 – Product, Branding, and Packaging Decisions

Types of Products – Consumer

Specialty – consumers put a lot of emphasis on, a lot of consideration and evaluation
Shopping – step back from specialty, spend a fair amount of time evaluating alternatives. Buying
shoes/appliances/etc
Convenience – basic consumers do not spend time to evaluate them prior to purchase.
Food.
Unsought – consumers don’t normally think to buy, funeral services. Also, things they
don’t know exist.

Core Customer values – the basic problem-solving benefits that consumers are seeking
Marketers convert core customer values into an actual product.
Associated Services – the nonphysical attributes of the product, including product
warranties, financing, product support, and after-sale service.

Product Mix Breadth and Product Line Depth (Example slide 7)

Product Mix – the complete set of all products offered by a firm
Product lines – groups of associated items, such as those that consumers use together or think of as
art of a group of similar products. Within each product line, there are often multiple:
Product Categories – an assortment of items that the customer sees as reasonable substitutes for one
another.
Brands – the names, terms, designs, symbols, or any other features that identify one seller’s good as
distinct from those of other sellers.
Breadth – number of product lines
- Increase breadth: add new product lines
- Decrease breadth: delete/drop an entire line
Depth – number of products within a product line
Line Depth
- Line Stretching: downward (making a lower end product) and upward (making a higher end
product).
- Line Filing: filing in the cracks with new brands
- Increase depth – add new products within a line
- Decrease depth – delete product categories to realign resources
Stock Keeping Units (SKU) – individual items within each product category; the smallest unit available
for inventory control.

Branding – a brand can use: name, logos, symbols, characters, slogans, jingles, and even distinctive
packages.
- Provides a way for a firm to differentiate its product offerings from those of its competitors.
Managing a Portfolio of Brands
- Natural Selection: letting the strong ones prosper and letting go the weak ones
- Brand Loyalty
- Avoid Cannibalism

Value of Branding
 - Brands facilitate purchasing, impact market value, are assets, reduce marketing costs, protect
from competition, and establish loyalty.

Brand Overview
Branding
1. Brand Equity (: the set of assets and liabilities linked to a brand that add to or subtract from
the value provided by the product or service - can help and hinder the company)
- Brand Awareness – measures how many consumers in a market are familiar with the brand
and what it stands for and have an opinion about that brand. Important for infrequent
purchased products.
- Perceived Value – the relationship between a product benefits and costs.
- Brand Associations – mental links consumers make between a brand and its key product
attributes such as the logo, slogan, or famous personality
- 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.

2. Brand Ownership Strategies

- Manufacturer – brands that are owned and managed by the manufacturer
- Generic – those that are sold without a brand name, typically in commodities markets. The
popularity and acceptance of generic products has declined.
- Private Label or Store Brand – off shoot brands specific to the store that sells them. PC, no
name, blue menu. Have evolved very much.

3. Naming brands and Product Lines

- Corporate brand
- Individual brand – the use of individual brand names for each of a firm’s products.
- Family brand – the use of a combination of the company brand name and individual brand
name to distinguish a firm’s products.

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
Can easily be led astray from these very simple guidelines

Brand Extensions – Benefits

Use of the same brand name for new products being introduced to the same or new markets.
- Well established name
- Perception of high quality carries over
- Lower marketing costs
- Synergy among complementary products
- Boost sales of the core brand

Brand Extensions – Negative Consequences

Use of the same brand name for new products
- Core brand & new extension may not “fit” well together
- Brand association between the wo may not be similar
- Too many extensions results in brand dilution (occurs when a brand extension adversely
affects consumer perceptions about the attributes the core rand is believed to hold)
- Ensure the brands can be distanced from one another if need be

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?

Cobranding – two or more brands together on the same package or promotion. Enhances consumers’
perceptions of product quality by signalling otherwise unobservable product quality through links
between the firm’s brand and a well-known quality brand.

Brand Licensing – a contractual arrangement between firms, whereby one firm allows another to use
its brand name, logo, symbols, or characters in exchange for a negotiated fee.

Packaging
- An important brand element with physical benefits

Labelling
- Labels on products and packages produce information the consumer needs for his purchase
decision and consumption of the product