10.1.1: Defining a Brand
A brand refers to a name, term, symbol, or any other type of feature that defines or identifies a seller’s product or service.
Discuss the characteristics and connotations around branding products and services
- The word “brand” is derived from the Old Norse brand meaning “to burn,” which refers to the practice of producers burning their mark (or brand) onto their products.
- During the Industrial Revolution, the production of many household items, such as soap, was moved from local communities to centralized factories where they were branded with a logo or insignia, extending the meaning of “brand” to that of trademark.
- All of a brand’s elements (i.e., logo, color, shape, letters, images) work as a psychological trigger or stimulus that causes an association to all other thoughts we have about a brand.
- Brands provide external cues to taste, design, performance, quality, value, and prestige if they are developed and managed properly.
- Brands convey positive or negative messages about a product. They also indicated the company or service to the consumer, which is a direct result of past advertising, promotion, and product reputation.
- A brand can convey up to six levels of meaning: Attributes, Benefits, Values, Culture, Personality and User.
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify for consumers that the products or services on or with which the trademark appears originate from a unique source, designated for a specific market. It also distinguishes its products or services from those of other entities.
A translucent design impressed on the surface of paper and visible when the paper is held to the light.
A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.
- Campbell Soup, Coca-Cola, Juicy Fruit gum, Aunt Jemima, and Quaker Oats were among the first products to be “branded. “
Defining a Brand
A brand consists of any name, term, design, style, words, symbols or any other feature that distinguishes the goods and services of one seller from another. A brand also distinguishes one product from another in the eyes of the customer. All of its elements (i.e., logo, color, shape, letters, images) work as a psychological trigger or stimulus that causes an association to all other thoughts we have about this brand. Tunes, celebrities, and catchphrases are also oftentimes considered brands.
The word “brand” is derived from the Old Norse ‘brand’ meaning “to burn,” which refers to the practice of producers burning their mark (or brand) onto their products. Italians are considered among the first to use brands in the form of watermarks on paper in the 1200s. However, in mass-marketing, this concept originated in the 19th century with the introduction of packaged goods.
During the Industrial Revolution, the production of many household items, such as soap, was moved from local communities to centralized factories to be mass-produced and sold to the wider market. When shipping their items, factories branded their logo or insignia on the barrels used, thereby extending the meaning of “brand” to that of trademark. This enabled the packaged goods manufacturers to communicate that their products should be trusted as much as local competitors. Campbell Soup, Coca-Cola , Juicy Fruit gum, Aunt Jemima, and Quaker Oats were among the first products to be “branded. “
The Coca-Cola logo is an example of a widely-recognized trademark and global brand.
A successful brand can create and sustain a strong, positive, and lasting impression in the mind of a consumer. Brands provide external cues to taste, design, performance, quality, value and prestige if they are developed and managed properly. Brands convey positive or negative messages about a product, along with indicating the company or service to the consumer, which is a direct result of past advertising, promotion, and product reputation.
A brand can convey up to six levels of meaning:
- Attributes: The Mercedes-Benz brand, for example, suggests expensive, well-built, well-engineered, durable, high-prestige automobiles.
- Benefits: attributes must be translated into functional and emotional benefits.
- Values: Mercedes stands for high performance, safety, and prestige.
- Culture: Mercedes represents German culture, organized, efficient, high quality.
- Personality: the brand projects a certain personality.
- User: the brand suggests the kind of consumer who buys and uses the product.
The Mercedes-Benz Logo suggests high-prestige as an automobile brand.
10.1.2: Value of Branding
Branding is a long term exercise, but one that reaps long-term profitability through increased customer loyalty.
Explain why a strong branding strategy is essential to the success of a company
- Branding is crucial to the success of any tangible product. In consumer markets, branding can influence whether consumers will buy the product.
- Branding can also help in the development of a new product by facilitating the extension of a product line or mix, through building on the consumer’s perceptions of the values and character represented by the brand name.
- Effective branding of a product enables the consumer to easily identify the product because the features and benefits have been communicated effectively.
- Branding helps the manufacturer create loyalty, decrease the risk of losing market share to the competition by establishing a differential advantage, and allow premium pricing that is acceptable by the consumer because of the perceived value of the brand.
- Branding enables the retailer to benefit from brand marketing support by helping to attract more customers (ideally ones who normally don’t frequent the establishment).
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify for consumers that the products or services on or with which the trademark appears originate from a unique source, designated for a specific market. It also distinguishes its products or services from those of other entities.
the combination of two or more well-known brands for marketing purposes, to strengthen one another’s preference or purchase intentions, or to reach a broader audience
This process involves researching, developing, and implementing brand names, brand marks, trade characters, and trademarks.
- Starbucks is a brand known for its premium, oftentimes deemed “over-priced” coffee. Yet Starbucks has a loyal fan base due to its established global branding that communicates value.
“Branding is a way to create an emotional connection with a specific audience. ” – Troika, a network branding company.
What is the Purpose of Branding and Why Is It So Important?
Branding involves researching, developing, and implementing brand names, brand marks, trade characters, and trademarks. It undoubtedly requires a significant contribution from marketing communications and is a long term exercise, but one that reaps long-term profitability.
Branding is crucial to the success of any tangible product. In consumer markets, branding can influence whether consumers will buy the product. Branding can also help in the development of a new product by facilitating the extension of a product line or mix, through building on the consumer’s perceptions of the values and character represented by the brand name.
Benefits of Branding for the Consumer
Effective branding of a product enables the consumer to easily identify the product because the features and benefits have been communicated effectively. This will increase the probability that the product will be accessible and therefore purchased and consumed. Dunkin’ Donuts , for example, is a brand that has an established logo and imagery that is familiar to most consumers. The vivid colors and image of a DD cup are easily recognized and distinguished from competitors.
The Dunkin’ Donuts logo, which includes an image of a DD cup of coffee, makes it easy to spot anywhere.
Benefits of Branding for the Manufacturer
Branding helps create loyalty, decreases the risk of losing market share to the competition by establishing a differential advantage, and allow premium pricing that is acceptable by the consumer because of the perceived value of the brand. Good branding also allows for effective targeting and positioning. For example, Starbucks is a brand known its premium coffee. Starbucks has a loyal fan base due to its established global branding that communicates value.
Starbucks is a brand associated with premium, high-priced coffee.
Benefits of Branding for the Retailer
Branding enables the retailer to benefit from brand marketing support by helping to attract more customers (ideally ones who normally don’t frequent the establishment). For example, a customer who truly values organic brands might decide to visit a Babies R Us to shop for organic household cleaners that are safe to use around babies. This customer might have learned that a company called BabyGanics, which brands itself as making “safe, effective, natural household solutions”, was only available at this particular retailer.
10.1.3: Brand Loyalty
Brand loyalty entails commitment and repeated consumer purchase behavior following perceived value, satisfaction, and brand trust.
Describe the conditions that must be met to achieve brand loyalty, and the consumer behaviors associated with brand loyalty
- Brand loyalty is not to be characterized exclusively by a consumer’s ability to repurchase a brand.
- Customers’ perceived value, brand trust, satisfaction, repeat purchase behavior, and commitment are found to be the key influencing factors of brand loyalty.
- The benefits of brand loyalty are longer tenure (or staying a customer for longer), and lower sensitivity to price.
- True brand loyalty exists when: a) customers have a high relative attitude toward the brand, which is then exhibited through repurchase behavior; and b) whether the customer is committed to the brand.
- The four patterns of behavior: a) Hardcore Loyals, who buy the brand all the time; b) Split Loyals, loyal to two or three brands; c) Shifting Loyals, moving from one brand to another; and d) Switchers, with no loyalty (possibly ‘deal-prone’ or ‘vanity prone’).
- The benefits of brand loyalty are longer tenure (or staying a customer for longer), and lower sensitivity to price. Recent research found evidence that longer-term customers were indeed less sensitive to price increases.
- Andrew Ehrenberg
A statistician and marketing scientist. For over half a century, he made contributions to the methodology of data collection, analysis and presentation, and to understanding buyer behavior and how advertising works.
- Loyalty Program
Structured marketing efforts that reward, and therefore encourage, loyal buying behavior — behavior which is potentially beneficial to the firm.
- Philip Kotler
An American academic focused on marketing. The author of Marketing Management, among dozens of other textbooks and books, and the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University.
- Some fairly well-known examples of brand loyalty promotions include: My Coke Rewards, Pepsi Stuff, and the Marriott Rewards loyalty programs.
In marketing, brand loyalty refers to a consumer’s commitment to repurchase or otherwise continue using a particular brand by repeatedly buying a product or service.
The American Marketing Association defines brand loyalty as: 1.) “The situation in which a consumer generally buys the same manufacturer-originated product or service repeatedly over time rather than buying from multiple suppliers within the category” (sales promotion definition). 2.) “The degree to which a consumer consistently purchases the same brand within a product class” (consumer behavior definition).
Aside from a consumer’s ability to repurchase a brand, true brand loyalty exists when a.) the customer is committed to the brand, and b.) the customers have a high relative attitude toward the brand, which is then exhibited through repurchase behavior. For example, if Joe has brand loyalty to Company A, he will purchase Company A’s products even if Company B’s products are cheaper and/or of a higher quality.
Brand loyalty is viewed as a multidimensional construct, determined by several distinct psychological processes, such as the customers’ perceived value, brand trust, satisfaction, repeat purchase behavior, and commitment. Commitment and repeated purchase behavior are considered as necessary conditions for brand loyalty, followed by perceived value, satisfaction, and brand trust.
Philip Kotler defines four customer-types that exhibit similar patterns of behavior:
- a) Hardcore Loyals, who buy the brand all the time
- b) Split Loyals, loyal to two or three brands
- c) Shifting Loyals, moving from one brand to another
- d) Switchers, with no loyalty (possibly “deal-prone,” constantly looking for bargains, or “vanity prone,” looking for something different).
Benefits of Brand Loyalty
The benefits of brand loyalty are longer tenure (or staying a customer for longer), and lower sensitivity to price. Recent research found evidence that longer-term customers were indeed less sensitive to price increases.
According to Andrew Ehrenberg, consumers buy “portfolios of brands.” They switch regularly between brands, often because they simply want a change. Thus, “brand penetration” or “brand share” reflects only a statistical chance that the majority of customers will buy that brand next time as part of a portfolio of brands. It does not guarantee that they will stay loyal.
By creating promotions and loyalty programs that encourage the consumer to take some sort of action, companies are building brand loyalty by offering more than just an advertisement. Offering incentives like big prizes creates an environment in which customers see the advertiser as more than just the advertiser. Individuals are far more likely to come back to a company that uses interesting promotions or loyalty programs than a company with a static message of “buy our brand because we’re the best.”
Popular Loyalty Programs
Below are some of the most popular Loyalty Programs that are currently being used by major companies as a means of engaging their customers beyond traditional advertising.
Sweepstakes and Advergames
- Branded digital games that engage consumers with prize incentives
- Skill tests and user-generated promotions such as video and photo contests
Applications and Management
- Develop promotions and offers within social media channels
- Ongoing management and maintenance of brand Facebook pages and other social media
Customer Rewards Programs
- Online points programs – earn prizes for incremental purchase behavior (e.g., JetBlue’s TrueBlue and American Airlines’s AAdvantage frequet flyer programs)
- My Coke Rewards, Pepsi Stuff, and the Marriott Rewards loyalty programs
Marriott is known for its customer rewards program – Marriott Rewards.
The San Diego Marriott Marquis & Marina. It’s one of the highest revenue-generating Marriotts in the nation.
- Promotional auctions – bid for prizes with points earned from incremental purchase behavior
- Manage overall subscription databases – national and/or segmented by market
- Design, develop, and publish email blasts
- Develop templates specific offers and promotions / delivery
/ Mobile Apps / Desktop Apps and
- SMS Promotions
- iPhone apps
- Branded web apps
10.1.4: Brand Equity
Brand equity is the value of a brand that is well-known and conjures positive associations, which helps it remain relevant and competitive.
List the 10 attributes used to measure brand equity according to marketing professor and brand consultant David Aaker
- Brand equity can manifest itself in consumer recognition of logos or other visual elements, brand language associations made by consumers’ perceptions of quality, and value among other relevant brand attributes.
- While many experts have developed tools or metrics to analyze brand equity, there is no universally accepted way to measure it.
- Brand equity can be measured quantitatively using numerical values such as profit margins and market share, but this approach fails to capture qualitative elements such as prestige and mental and emotional associations.
- Brand attributes used to assess a brand’s equity include: differentiation, satisfaction or loyalty, perceived quality, leadership or popularity, perceived value, brand personality, organizational associations, brand awareness, market share, and market price and distribution coverage.
- Other ways that a brand equity can be measured (these can be used individually or in combination): at the firm level, at the product level, and at the consumer level.
- David Aaker
He is a consultant and author on the field of marketing, particularly in the area of brand strategy. He is currently the Vice Chairman of Prophet, a global brand and marketing consultancy firm, Professor Emeritus at the Haas School of Business of the University of California, Berkeley, and an advisor to Dentsu, a major Japanese advertising agency. He blogs on Aaker on brands.
- Brand Equity
This phrase describes the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well-known name.
- brand awareness
The extent to which a brand is recognized by potential customers, and is correctly associated with a particular product. Expressed usually as a percentage of target market, brand awareness is the primary goal of advertising in the early months or years of a product’s introduction.
- brand loyalty
where a person buys products from the same manufacturer repeatedly rather than from other suppliers
- For example, Starbucks can sell its coffee at a higher price than solid market competitors because consumers associate the brand with quality and value. This is why brand equity is oftentimes directly correlated with a brand’s profitability.
In marketing, brand equity refers to the value of a brand that is well-known and conjures positive mental and emotional associations. For any given product, service, or company, brand equity is considered a key asset because it helps it remain relevant and competitive. Brand equity can manifest itself in consumer recognition of logos or other visual elements, brand language associations made by consumers’ perception of quality, and value among other relevant brand attributes.
When consumers trust a brand and find it relevant, they may select the offerings associated with that brand over those of competitors even at a premium price. For example, Starbucks can sell its coffee at a higher price than solid market competitors because consumers associate the brand with quality and value. This is why brand equity is oftentimes directly correlated with a brand’s profitability.
Starbucks sells its coffee at a higher price point, which is justified by its perceived brand value and quality.
Baristas working in the first Starbucks coffee shop in Seattle, Washington.
Measuring Brand Equity
Brand equity is strategically crucial, but also very difficult to quantify. As a result, many experts have developed tools or metrics to analyze this asset, although there is no universally accepted way to measure it. For example, while it can be measured quantitatively using numerical values such as profit margins and market share, this approach fails to capture qualitative elements such as prestige and mental and emotional associations.
According to David Aaker, a marketing professor and brand consultant, there are ten attributes of a brand that can be used to assess its strength:
- Satisfaction or loyalty
- Perceived quality
- Leadership or popularity
- Perceived value
- Brand personality
- Organizational associations
- Brand awareness
- Market share
- Market price and distribution coverage
Brand Asset Valuator
Young & Rubicam, a marketing communications agency, has developed the brand asset valuator, a tool to diagnose the power and value of a brand. The agency uses this tool to survey and measure consumers’ perspectives along four dimensions:
- Differentiation: The defining characteristics of the brand and its distinctiveness relative to competitors
- Relevance: The appropriateness and connection of the brand to a given consumer
- Esteem: Consumers’ respect for and attraction to the brand
- Knowledge: Consumers’ awareness of the brand and understanding of what it represents
Other ways that brand equity can be measured (these can be used individually or in combination):
- At the firm level – Brand equity can be studied as a financial asset by making a calculation of a brand’s worth as an intangible asset. For example, a company can estimate brand value on the basis of projected profits discounted to a present value. In turn, the present value can be used to calculate the risk profile, market leadership, stability, and global reach.
- At the product level – The price of an equivalent well-known brand can be compared to that of a no-name or private label product.
- At the consumer level – This measure seeks to map the mind of the consumer to uncover associations with the given brand. For example, projective techniques can be commonly used to identify tangible and intangible attributes, attitudes, and various perceptions about the brand. Under this approach, the brands with the highest levels of awareness and most favorable and unique associations are considered high equity brands.
10.1.5: Types of Brands
Brand Types: individual products, ranges, services, organizations, individuals, groups, events, places, private labels, media, and e-brands.
Name the different categories that fall under service brands
- The different types of brands include: individual products, product ranges, services, organizations, persons, individuals, groups, events, geographic places, private label brands, media brands, and e-brands.
- The most common type of brand is a tangible, individual product, such as a car or a drink.
- Product brands can also be associated with a range, such as the Mercedes S-class cars or all the varieties of Colgate toothpaste.
- As companies move from manufacturing products to delivering complete solutions and intangible deliverables, service brands are characterized by the need to maintain a consistently high level of service delivery.
- The service category comprises the following: classic service brands (e.g. airlines and banks), pure service providers (e.g. member associations), professional service brands (e.g. advisors of all kinds), agents (e.g. travel agents), and retail brands (e.g. supermarkets, restaurants).
- Events have brands too, whether they are rock concerts, the Olympics, a space-rocket launch, or a town-hall dance.
Touchable; able to be touched or felt; perceptible by the sense of touch; palpable.
- Mercedes and the US Senate are both defined organizations and each have qualities associated with them that constitute their brand.
Types of Brands
The different types of brands include: individual products, product ranges, services, organizations, persons, individuals, groups, events, geographic places, private label brands, media, and e-brands.
The most common type of brand is a tangible, individual product, such as a car or drink. This can be very specific, such as the Kleenex brand of tissues or can comprise a wide range of products.
Product brands can also be associated with a range, such as the Mercedes S-class cars or all varieties of Colgate toothpaste.
A service is another type of brand as companies move from manufacturing products to delivering complete solutions and intangible services. Service brands are characterized by the need to maintain a consistently high level of service delivery. This category comprises the following:
- Classic service brands (such as airlines, hotels, car rentals, and banks).
- Pure service providers (such as member associations).
- Professional service brands (such as advisors of all kinds – accountancy, management consultancy).
- Agents (such as travel agents and estate agents).
- Retail brands (such as supermarkets, fashion stores, and restaurants).
Another type of brand is an organization. This can be a company that delivers products and services. Mercedes and the US Senate are all defined organizations and each have qualities associated with them that constitute their brand. Organizations can also be linked closely with the brand of an individual. For example, the U.S. Democratic party is closely linked with President Barack Obama.
A person can also be considered a brand. It can be comprised of one, as in the case of Oprah Winfrey, or a few individuals, where the branding is associated with different personalities, such as with the American Democratic Party.
Not much higher in detail than an individual is the brand of a group. In particular, when this is a small group and the individuals are known, the group brand and the individual brand overlap. For example, the OWN brand of the Oprah Winfrey Network and the brand of its known members (Oprah and her team) are strongly connected.
OWN Group Brand
The OWN group brand is linked to Oprah Winfrey.
Events have brands too, whether they are rock concerts, the Olympics, a space-rocket launch, or a town-hall dance. Event brands are strongly connected with the experience of the people attending. Product, service and other brands realize the power of event brands and seek to have their brands associated with the event brands. Thus, sponsorship of events is now a thriving big business as one brand tries to get leverage from the essence of the event, such as the excitement and danger of car racing.
Places or areas of the world also have essential qualities that are seen as characterizations and hence also have a brand. These areas can range from countries to states to cities to streets to buildings. Those who govern or represent these geographies will work hard to develop the brand. Cities, for example, may have de facto brands of being dangerous or safe, cultural or bland, which will be used by potential tourists in their decisions to visit and by companies in their decisions on where to set up business.
Private label brands, also called own brands, or store brands, exist among retailers that possess a particularly strong identity (such as Save-A-Lot).
Media brands include newspapers, magazines, and television channels such as CNN .
CNN is an example of a media brand.
The primary activity of e-brands is to deliver physical products or services, as in the case of Amazon.com . These online brands focus on delivering a service or experience in the virtual environment.
Amazon.com is an e-brand that delivers services online. Consumers are able to buy and sell products on its website.
10.1.6: Brand Ownership
Brand Ownership means building a brand that reflects your values and persuades consumers to believe in and purchase your product.
Describe brand ownership and the rights of brand owners.
- To really own your Brand, you must have a clear understanding of where your brand stands today and a concrete strategy that outlines how you wish to manage and grow your brand.
- Equally important is understanding what makes your brand different and creating clear and persuasive messaging communication targeting your end consumer.
- When you truly own your brand, your money is spent wisely on marketing that is targeted, sharp and effective because you have a sophisticated understanding of the marketplace, your product/service, your consumer base and your strategy.
- A brand owner may seek to protect proprietary rights in relation to a brand by registering it to become a “Registered Trademark.”
- Also, a firm or licensor can also grant the right to use their brand name, patents or sales knowledge in exchange for some form of payment.
- Brand ownership should also be considered the responsibility of its management and employees.
- Brand Name
A term, design, symbol, or any other feature that identifies one seller’s goods or services as distinct from those of other sellers.
- Registered Trademark
Designated by ® (the circled capital letter “R”), is a symbol used to provide notice that the preceding mark is a trademark or service mark that has been registered with a national trademark office.
- Steve Jobs was considered a leader in shaping the identity of Apple and a key attribute for the brand, which has helped fuel a very high stock price for the company. His clear vision and leadership attracted the best talent, which then yielded some of mobile technology’s most innovative products to date.
Brand ownership is about building, developing and sustaining a brand that reflects your principles and values and which effectively persuades consumers to believe in and purchase your product/service.
In order to really own your brand, you must have a clear understanding of where your brand stands in the marketplace today, and a concrete strategy that outlines how you wish to manage and grow your brand moving forward. Equally important is understanding what makes your brand different. You must also create clear and persuasive messaging communication targeting your end consumer. You should also develop a plan to reach your goals in a realistic and organized fashion.
When you truly own your brand, your money is spent wisely on marketing that is targeted, sharp and effective because you have a sophisticated understanding of the marketplace, your product/service, your consumer base and your strategy. This will translate into disciplined and effective brand management that will enable you to remain relevant in a rapidly-changing [and oftentimes saturated] marketplace.
Brand ownership should also be considered the responsibility of its management and employees. Steve Jobs, for example, was considered a leader in shaping the identity of Apple, which has helped fuel a very high stock price for the company. As a result, the brand image and reputation has attracted some of the world’s best talent which, in turn, has yielded an variety of innovative mobile products that will undoubtedly be marked in the history of popular consumer culture.
A brand owner may seek to protect proprietary rights in relation to a brand by registering the trademark such that it becomes a “Registered Trademark.” Also, a firm or licensor can also grant the right to use their brand name, patents or sales knowledge in exchange for some form of payment.
The registered trademark symbol is designated by ® (the circled capital letter “R”).
10.1.7: Naming Brands
Naming a brand is crucial to a product’s reputation and success because it reflects its image and benefits in a way that can be differentiating.
Discuss the purpose of a brand name, and the process of researching and selecting a brand name
- Naming a brand is crucial to its reputation, development, and future success because the primary function of the brand (name and image) is to identify the product or service in a way that it differentiates it from those of other competitors.
- A brand name reflects the overall product image, positioning and, ideally, its benefits.
- At its best, a brand can provide a carryover effect when customers are able to associate quality products with an established brand name.
- A successful brand name can enable a product to: be meaningfully advertised and distinguished from competitors, be tracked down by consumers, and be given legal protection.
- The process of naming a brand is key because it requires a systematic effort that includes generating potential brand names, screening them (oftentimes conducting market research to test their potential among consumers), and ultimately selecting the one that holds the most potential.
- Market Research
The systematic collection and evaluation of data regarding customers’ preferences for actual and potential products and services.
- Brand Name
A term, design, symbol, or any other feature that identifies one seller’s goods or services as distinct from those of other sellers.
- An example of a brand name that is unique, identifiable, and differentiating is Apple’s line of mobile products which all begin with a lower-case “i” (i.e., iPad, iPod, iPhone, iTouch).
A brand is a term, design, or symbol that identifies a commercial product or service as distinct from those of other sellers. A brand name is the part of the brand that can be vocalized. A brand name can also be a name under which a business or company operates. Naming a brand is crucial to its reputation, development, and future success because the primary function of the brand (name and image) is to identify the product or service in a way that it differentiates it from those of other competitors.
Selecting a brand name is one of the most important product decisions a seller will need to make. A brand name reflects the overall product image, positioning and, ideally, its benefits. A successful brand name can enable a product to: be meaningfully advertised and distinguished from competitors, be tracked down by consumers, and be given legal protection. At its best, a brand can provide a carryover effect when customers are able to associate quality products with an established brand name.
For example, Apple has chosen to name all of its mobile products with a lower-case i, as in the case with the iPad and iPod . Another example of a brand name is Starbucks, the coffee company which is globally recognized and chooses to name its coffee sizes in Italian .
Visa Credit Card
Security chips were added to Visa credit cards as an extra security measures to protect against identity theft.
Tang is an individual brand that competes with Kraft’s other brand (Kool-Aid).
The process of naming a brand is key because it requires a systematic effort that includes generating potential brand names, screening them (oftentimes conducting market research to test their potential among consumers), and ultimately selecting the one that holds the most potential. Brand names are mandatory if the manufacturer or distributor plans to produce mass advertising for their product.
But before this process even begins, a basic branding strategy must be employed where a company or seller must select from among the following three viable options to follow:
- A strict manufacturer’s branding policy under which a producer can only manufacture merchandise under his own brand
- An exclusive distributor’s brand policy where a producer does not have a brand of his own but agrees to sell his products only to a particular distributor and carry his brand name (typically employed by private brands)
- A mixed brand policy, which allows elements of both extremes (options 1. and 2.) and leads to the production of manufacturer’s as well as distributor’s brands
Apple’s iPod Touch
iPod Touch is one of Apple’s mobile products named with the distinctive “i.”
10.1.8: Brands and Brand Lines
Strong brands are a powerful asset, and can be used to extend product lines to expand the scope and distribution of the organization.
Identify the various ways in which organizations can expand the brand lines to capture opportunities in the market
- When strategically executed, a brand extension to a given product line can be an effective tool for growth.
- When an organization grows successfully in a given product line, product extensions often enable the organization to capture new markets. Pepsi and Coca-Cola accomplished this through diet sodas, for example.
- Product line extensions are a common tool for extending brand lines. An extension to a product line may differentiate to capture a niche demographic, create a low cost opportunity, or collaborate with other brands.
- It’s important to keep in mind that any new product offering attached to a given brand creates a brand risk. Any issues that arise with use of the product may damage all of the products across the brand line.
- spin off
A new product offering utilizing an existing brand.
When understanding the potential in building a brand, it’s useful to recognize the way in which brands can extend. Brand extensions are usually accomplished by expanding the existing product line offerings, or potentially creating new product lines with the same brand (often in complementary markets).
To provide some context, let’s define a few simple examples of spinning off a brand. Coca-Cola and Pepsi are fairly classic examples of simple product line extensions to expand the brand. Diet Coke fulfills a different need than regular Coke, in that it contains fewer calories. Through extending their product line, they now had the potential to capture health conscious consumers. Car companies are another good example. There are tons of different Toyota automobiles on the market, each catering to slightly different needs, price points, and geographies. Brand lines and product extensions are a key aspect of brand management.
Brands and Product Extensions
This simple chart demonstrates the way in which product extensions and brand lines interact from a sustainability point of view.
A chart that shows how brand and product extensions (existing and new) interact – line extension, sustainability brand extension, multi-sustainability brands, and new sustainability brand.
To apply concepts of product extensions by adding to the brand line, an understanding of brand management strategies is a useful starting point. Investing in an intangible asset such as a brand can be a difficult process for organizations, as the return on this investment is not realized in the shorter term. However, building a strong repertoire with the target market in a given industry, and catering the product lines to fulfill various broader or niche needs within those markets, is a powerful strategic tool.
Extending brands is often accomplished through new lines of product, referred to as product extensions. When considering product extensions, it’s important to identify diverse needs that can be filled by the organization through core processes. This means that organizations must understand the needs of the market, and determine if the organization has the ability to fulfill some of these needs.
While there are countless, unique reasons to pursue a brand extension based on which industry is being discussed, there are a few common areas where extensions often occur:
Extending into the lower cost segment is a common move for brands as they gain power and scale in the industry. As successful companies grow in revenue and size, they often attain the ability to produce at higher scale economies. Once this is accomplished, spinning off a cheaper version of a brand is a great way to achieve higher levels of growth. Tesla is a great example of this. Tesla began by selling extremely high end vehicles, with the plan to utilize the return on those sales to begin producing higher quantities of lower cost models, all of which maintain the powerful Tesla brand.
A broad term, which can be applied to a variety of tactics, differentiation is all about identifying a unique need that users are willing to pay a premium for. Consider the beer and wine industry. Microbreweries have seen enormous growth (and, in turn, acquisition by big companies) in recent years. Microbreweries focus on creating a unique, specialized beer which often costs more. Due to the unique experience, local support and potential variety, customers are willing to pay a premium for a differentiated product (compared to the bigger brand names).
Another interesting example is co-branding. Sometimes co-branding can help an organization spread into new markets. For example, some cars come with built in surround sound systems. These cars are often partnered with strong brands, such as Bose, which provides mutual benefit and enables Bose to enter a new market. In this situation, the Bose brand is noted by car purchasers just as the car brands are considered in the context of good sound systems.
While extending product lines and spinning off the brand into new product formats can be a great opportunity for revenue growth, it also exposes the brand to new market forces and new risks. Careful quality control and brand maintenance is a key consideration in any new extensions to the brand. With proper execution, a brand can be a powerful asset for new product development.
10.1.9: Branding Strategies
A branding strategy helps establish a product within the market and to build a brand that will grow and mature in a saturated marketplace.
Distinguish between different types of branding strategies
- Attitude branding is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption of the product at all.
- Iconic brands are defined as having aspects that contribute to the consumer’s self-expression and personal identity.
- In “no brand” branding, the product is made conspicuous through the absence of a brand name.
- In derived branding, some suppliers of key components may wish to guarantee its own position by promoting that component as a brand in its own right.
- Cannibalization is a particular problem of a multi-brands strategy approach, in which the new brand takes business away from an established one which the organization also owns. This may be acceptable (indeed to be expected) if there is a net gain overall.
- In crowdsourcing branding, brands are created by the people for the business, which is opposite to the traditional method where the business creates a brand.
In marketing strategy, cannibalization refers to a reduction in sales volume, sales revenue, or market share of one product as a result of the introduction of a new product by the same producer.
- Brands whose value to consumers comes primarily from having identity value are said to be “identity brands. ” Some brands have such a strong identity that they become “iconic brands” such as Apple, Nike, and Harley Davidson.
A branding strategy helps establish a product within the market and to build a brand that will grow and mature in a saturated marketplace. Making smart branding decisions up front is crucial since a company may have to live with the decision for a long time. The following are commonly used branding strategies:
In this case a strong brand name (or company name) is made the vehicle for a range of products (for example, Mercedez Benz or Black & Decker) or a range of subsidiary brands (such as Cadbury Dairy Milk or Cadbury Fingers in the United States).
Each brand has a separate name, putting it into a de facto competition against other brands from the same company (for example, Kool-Aid and Tang are both owned by Kraft Foods). Individual brand names naturally allow greater flexibility by permitting a variety of different products, of differing quality, to be sold without confusing the consumer’s perception of what business the company is in or diluting higher quality products.
Tang is an individual brand that competes with Kool-Aid, Kraft’s other brand.
Kool-Aid is an individual brand that competes with Tang, Kraft’s other brand.
Attitude Branding and Iconic Brands
This is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption of the product at all. Companies that use attitude branding include: Nike, Starbucks, The Body Shop, and Apple, Inc. Iconic brands are defined as having aspects that contribute to the consumer’s self-expression and personal identity.
Brands whose value to consumers comes primarily from having identity value are said to be “identity brands. ” Some brands have such a strong identity that they become “iconic brands” such as Apple, Nike, and Harley Davidson.
Recently a number of companies have successfully pursued “no-brand” strategies by creating packaging that imitates generic brand simplicity. “No brand” branding may be construed as a type of branding as the product is made conspicuous through the absence of a brand name. “Tapa Amarilla” or “Yellow Cap” in Venezuela during the 1980s is a prime example of no-brand strategy. It was simply recognized by the color of the cap of this cleaning products company.
Some suppliers of key components may wish to guarantee its own position by promoting that component as a brand in its own right. For example, Intel, positions itself in the PC market with the slogan (and sticker) “Intel Inside. “
Brand Extension and Brand Dilution
The existing strong brand name can be used as a vehicle for new or modified products. For example, many fashion and designer companies extended brands into fragrances, shoes and accessories, furniture, and hotels. Frequently, the product is no different than what is already on the market, except it has a brand name marking. The risk of over-extension is brand dilution, which is when the brand loses its brand associations with a market segment, product area, or quality, price, or cachet.
Alternatively, in a very saturated market, a supplier can deliberately launch totally new brands in apparent competition with its own existing strong brand (and often with identical product characteristics) to soak up some of the share of the market. The rationale is that having 3 out of 12 brands in such a market will give a greater overall share than having 1 out of 10. Procter & Gamble is a leading exponent of this philosophy, running as many as ten detergent brands in the US market. In the hotel business, Marriott uses the name Fairfield Inns for its budget chain.
Cannibalization is a particular problem of a multi-brands strategy approach, in which the new brand takes business away from an established one which the organization also owns. This may be acceptable (indeed to be expected) if there is a net gain overall.
Also called own brands, or store brands, these have become increasingly popular. Where the retailer has a particularly strong identity this “own brand” may be able to compete against even the strongest brand leaders, and may outperform those products that are not otherwise strongly branded.
Individual and Organizational Brands
These are types of branding that treat individuals and organizations as the products to be branded. Personal branding treats persons and their careers as brands. Faith branding treats religious figures and organizations as brands.
These are brands that are created by the people for the business, which is opposite to the traditional method where the business creates a brand. This type of method minimizes the risk of brand failure, since the people that might reject the brand in the traditional method are the ones who are participating in the branding process.
This is a field of theory and practice which aims to measure, build, and manage the reputation of countries (closely related to place branding).
10.2.1: The Purposes of Packaging
The role of packaging in marketing has become quite significant as it is one of the ways companies can get consumers to notice products.
Describe the various uses of product packaging within a branding context
- Considering the importance placed on the package, it is not surprising that a great deal of research is spent on motivational research, color testing, psychological manipulation, and so forth, in order to ascertain how the majority of consumers will react to a new package.
- A common use of packaging is marketing. The packaging and labels can be used by marketers to encourage potential buyers to purchase the product.
- Packaging is also used for convenience and information transmission. Packages and labels communicate how to use, transport, recycle, or dispose of the package or product.
The process of communicating the value of a product or service to customers.
- In the case of Pringles, made by Procter & Gamble, a package had to be designed that would protect a very delicate product. It also faced the uncertain response of retailers which have never stocked stacked potato chips before.
The Purposes of Packaging
With the increased importance placed on self-service marketing, the role of packaging is becoming quite significant. For example, in a typical supermarket a shopper passes about 600 items per minute, or one item every tenth of a second. Thus, the only way to get some consumers to notice the product is through displays, shelf hangers, tear-off coupon blocks, other point-of-purchase devices, and, last but not least, effective packages. Considering the importance placed on the package, it is not surprising that a great deal of research is spent on motivational research, color testing, psychological manipulation, and so forth, in order to ascertain how the majority of consumers will react to a new package. Based on the results of this research, past experience, and the current and anticipated decisions of competitors, the marketer will initially determine the primary role of the package relative to the product. Should it include quality, safety, distinction, affordability, convenience, or aesthetic beauty?
For many drugs, packaging is used to protect the product, distribute information, and provide convenience.
A box of Risperdal pills that are packaged as convenient individual doses.
Common uses of packaging include:
- Physical protection: The objects enclosed in the package may require protection from, among other things, mechanical shock, vibration, electrostatic discharge, compression, temperature, etc.
- Information transmission: Packages and labels communicate how to use, transport, recycle, or dispose of the package or product. With pharmaceuticals, food, medical, and chemical products, some types of information are required by governments. Some packages and labels also are used for track and trace purposes.
- Marketing: The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package graphic design and physical design have been important and constantly evolving phenomenon for several decades. Marketing communications and graphic design are applied to the surface of the package and (in many cases) the point of sale display, examples of which are shown here: .
- Convenience: Packages can have features that add convenience in distribution, handling, stacking, display, sale, opening, re-closing, use, dispensing, reuse, recycling, and ease of disposal.
- Barrier protection: A barrier from oxygen, water vapor, dust, etc., is often required. Permeation is a critical factor in design. Some packages contain desiccants or oxygen absorbency to help extend shelf life. Modified atmospheres or controlled atmospheres are also maintained in some food packages. Keeping the contents clean, fresh, sterile and safe for the intended shelf life is a primary function.
- Security: Packaging can play an important role in reducing the security risks of shipment. Packages can be made with improved tamper resistance to deter tampering and also can have tamper-evident features to help indicate tampering. Packages can be engineered to help reduce the risks of package pilferage.
10.2.2: Packaging Considerations
In the package design stages for products, structural design, marketing, and environmental responsibility should all be considered.
Outline the design, regulatory and environmental requirements that must be addressed during the packaging development process
- While the development of a package (or component) can be a separate process, it should be linked closely with the product to be packaged.
- With some types of products, the design process involves detailed regulatory requirements for the package. For example, toxicologists and food scientists need to verify that the packaging materials are permissible under applicable regulations.
- Package development should involve considerations for sustainability, environmental responsibility, and applicable environmental and recycling regulations.
- new product development
New product development (NPD) is the complete process of bringing a new product to market.
- Andes mints are just one example of excessive packaging used to misrepresent the amount of product inherent in a package, making the package appear to have more product than it actually does. Note, in this picture, the extra paperboard is added to exaggerate the size of the package. This is also an example of wasting natural resources and energy, because paperboard is a natural resource that requires the use of energy to manufacture.
Package design and development are often thought of as an integral part of the new product development process. Alternatively, development of a package (or component) can be a separate process, but must be linked closely with the product to be packaged. Package design starts with the identification of all the requirements: structural design, marketing, shelf life, quality assurance, logistics, legal, regulatory, graphic design, end-use, and environmental. The design criteria, performance (specified by package testing), completion time targets, resources, and cost constraints need to be established and agreed upon. Package design processes often employ rapid prototyping, computer-aided design, computer-aided manufacturing, and document automation.
With some types of products, the design process involves detailed regulatory requirements for the package. With packaging foods, for example, any package components that may contact the food are considered food contact materials. Toxicologists and food scientists need to verify that the packaging materials are permissible under applicable regulations. Packaging engineers need to verify that the completed package will keep the product safe for its intended shelf life with normal usage. Packaging processes, labeling, distribution, and sale need to be validated to comply with regulations and to ensure they have the well-being of the consumer in mind.
Package design may take place within a company or with various degrees of external packaging engineering: independent contractors, consultants, vendor evaluations, independent laboratories, contract packagers, or total outsourcing. Some sort of formal project planning and project management methodology is required for all but the simplest package design and development programs. An effective quality management system and verification and validation protocols are mandatory for some types of packaging and recommended for all.
Package development involves considerations for sustainability, environmental responsibility, and applicable environmental and recycling regulations. It may involve a life cycle assessment which considers the material and energy inputs and outputs to the package, the packaged product (contents), the packaging process, the logistics system, and waste management. It is necessary to know the relevant regulatory requirements for point of manufacture, sale, and use. The traditional “three R’s” of reduce, reuse, and recycle are part of a waste hierarchy which may be considered in product and package development.
Environmental considerations include:
- Prevention – Waste prevention is a primary goal. Packaging should be used only where needed. Proper packaging can also help prevent waste. Packaging plays an important part in preventing loss or damage to the packaged-product (contents). Usually, the energy content and material usage of the product being packaged are much greater than that of the package. A vital function of the package is to protect the product for its intended use: if the product is damaged or degraded, its entire energy and material content may be lost.
- Disposal – Incineration, and placement in a sanitary landfill are needed for some materials. Certain states within the US regulate packages for toxic contents, which have the potential to contaminate emissions and ash from incineration and leachate from landfill. Packages should not be littered.
- Energy recovery – Waste-to-energy and refuse-derived fuel in approved facilities are able to make use of the heat available from the packaging components.
- Minimization – (also known as “source reduction”) The mass and volume of packaging (per unit of contents) can be measured and used as one of the criteria to minimize during the package design process. Usually “reduced” packaging also helps minimize costs. Packaging engineers continue to work toward reduced packaging.
Extra paperboard is used to exaggerate the size of the package. It’s also an example of wasting natural resources.
A package of Andes mints.
10.2.3: Packaging Strategies
Packaging enables a marketing team to highlight key product attributes, qualifiers, and branding images to capture strategic value.
Describe the various strategies and objectives a marketing team can employ to capture value through effective packaging
- Packaging fulfills a variety of strategy purposes across a number of disciplines, including legal, marketing, and operational objectives.
- From a marketing perspective, there are quite a few useful strategies and outcomes to keep in mind when designing a product’s packaging.
- Communicating the core attributes and value of the product, alongside building brand awareness and brand recognition, helps to manage the expectations of consumers and build brand loyalty.
- Using symbols and icons, particularly from verifying third parties, can be a useful strategy for packaging.
- Co-branding is also a useful packaging strategy that enables two or more firms to utilize their brand equity to drive behavior on a product to which each firm adds value.
- Brand Recognition
The ability for a given consumer to associate a product with a brand immediately upon seeing it.
Packaging is a significant issue from a strategic perspective, with impacts ranging from the first impression consumers will have to environmental policy to cost-cutting. How a firm packages a product is therefore a key topic across various disciplines, with the potential to increase revenues, decrease costs, and maintain alignment with environmental policies and legislation.
Packaging Waste Hierarchy
Through utilizing minimal and reusable packaging, costs can be lowered while consumers receive the value of having less of a negative impact on the environment.
A pyramid diagram that shows the packaging waste hierarchy from least to most favored – disposal, energy recovery, recycling, reuse, minimisation, and prevention.
From the marketing perspective, packaging strategies can have a significant impact on brand awareness, brand recognition, expectations management, and as a conduit of information between the organization and the user. Marketing, branding, and packaging must align on messaging, value proposition, and communication to accomplish the following:
The primary purpose of packaging from a marketing perspective is to underscore why a user would purchase a given product. This could be extremely simple, such as a description of what the product is. This could also be emotional, communicating what the product stands for. For example, perhaps an informed consumer wants to buy locally sourced food. A smart marketing strategy for organizations focused on local production would be to highlight this in big letters on the package.
Another important purpose of packaging for marketers is the capacity for building recognition of the brand. When you see a red can of soda with cursive writing, you almost immediately associate it with Coca-Cola. This is strategic on behalf of the company. It builds recognition, which can lead to loyalty.
Slightly different than recognition, building brand awareness is all about the opportunity to be memorable. Creating packaging that will draw the attention of a consumer will increase that brand’s ability to convert the customer both in this instance, and in later instances. For consumers, their attention is a much desired commodity for organizations. Packaging is an opportunity to accomplish this.
A key component of effective marketing is ensuring the consumer gets what they expect (and preferably a bit more). This way, the association of the consumer is a positive one when considering the organization, relative to what they had expected. Packaging allows for simple strategies in this regard, such as stating on the package that batteries aren’t included, or that a given accessories isn’t compatible with certain types of smartphones.
Another interesting and useful strategy within packaging is co-branding. Simply put, organizations often collaborate, and can benefit from sharing this collaboration. Ben and Jerry’s ice cream uses a ton of different ingredients, many of which may be another organization’s brand. Heath bar in Ben and Jerry’s, for example, could be co-branded on the package.
Symbols and Icons
Packaging is a visual representation of a product, and can benefit from established and trustworthy markings of certain attributes. For example, a 100% organic symbol on a box of cereal would indicate to the user that an external third party verified and approved of the cereal manufacturer’s production process. Using recognizable symbols and icons can build trust between the organization and the consumer.
10.2.4: Product Labeling
Labels serve to capture the attention of shoppers as well as provide useful information regarding the product.
State what information and symbols are generally included on product labels
- In some countries, many products, including food and pharmaceuticals, are required by law to contain certain labels such as listing ingredients, nutritional information, or usage warning information.
- Labels are attached on the product package to provide information such as manufacturer of the product, date of manufacture, date of expiry, its ingredients, how to use the product, and its handling.
- Some labels include symbols to show product certifications, trademarks, or proof of purchase. These symbols exist to communicate aspects of consumer use and safety.
- The Fair Packaging and Labeling Act
The Fair Packaging and Labeling Act is a US law that applies to labels on many consumer products. It requires the label to state:The identity of the product;The name and place of business of the manufacturer, packer, or distributor;The net quantity of contents;The contents statement must include both metric and US customary units.
Labels serve to capture the attention of shoppers. The use of catchy words may cause strolling customers to stop and evaluate the product. The label is likely to be the first thing new customers see and thus offer their first impression of the product.
Labels are Descriptive
A label is a carrier of information about the product. The attached label provides customers with information to aid their purchase decision or help improve the experience of using the product. Labels can include:
- Care and use of the product
- Recipes or suggestions
- Ingredients or nutritional information
- Product guarantees
- Manufacturer name and address
- Weight statements
- Sell by date and expiration dates
Symbols Used in Labels
Many types of symbols for package labeling are nationally and internationally standardized. For consumer packaging, symbols exist for product certifications, trademarks, and proof of purchase. Some requirements and symbols exist to communicate aspects of consumer use and safety. For example, the estimated sign notes conformance to EU weights and measures accuracy regulations. Examples of environmental and recycling symbols include the recycling symbol, the resin identification code, and the “green dot.”
In some countries, many products, including food and pharmaceuticals, are required by law to contain certain labels such as ingredients, nutritional information, or usage warning information (FDA). For example, a law label is a legally required tag or label on new items describing the fabric and filling regulating the United States mattress, upholstery, and stuffed article industry. The purpose of the law label is to inform the consumer of the hidden contents, or “filling materials” inside bedding & furniture products. Laws requiring these tags were passed in the United States to inform consumers as to whether the stuffed article they were buying contained new or recycled materials. The recycling logo needed to be displayed on the label. The Fair Packaging and Labeling Act (FPLA) is a law that applies to labels on many consumer products that states the products identity, the company that manufactures it, and the net quantity of contents.
Recycled Material Label
Laws were passed in the United States to inform consumers as to whether the products they were buying contained new or recycled materials.
10.2.5: Product Warranties
Support services, such as product warranties, are a great way for a company to distinguish itself from its competitors.
Describe how warranties and money-back guarantees act as supporting services for products
- Behind every product is a series of supporting services, such as warranties and money-back guarantees. In many instances, such services may be as important as the product itself.
- Warranties are used to mitigate the risks of a malfunctioning product or the risk of making a wrong purchase decision regarding misinformation about a product.
- A money-back guarantee, also know as a “satisfaction guarantee,” is a simple guarantee that if a buyer is not satisfied with a product or service, a refund will be made.
an assurance by one party to the other party that specific facts or conditions are true or will happen; the other party is permitted to rely on that assurance and seek some type of remedy if it is not true or followed
- AppleCare, shown here, is the hardware warranty and support service offered by Apple Inc. It comes included as standard with all products, offering limited hardware warranty along with phone/Internet support on its products. Additional purchase of an AppleCare Protection Plan extends both the hardware and support cover, depending on the device it is purchased for.
Behind every product is a series of supporting services, such as warranties and money-back guarantees. In many instances, such services may be as important as the product itself. In fact, at times it is difficult to separate the associated services from the product features.
Companies must constantly monitor the services offered by the company and its competitors. Based on the results of data-gathering devices such as customer surveys, consumer complaints, and suggestion boxes, the product manager can determine the types of services to offer, the form the service will take, and the price charged. For example, consumers are very reluctant to purchase a stereo that can be serviced only by sending it to the factory, and paying the postage and a high service fee. Maytag, however, has been very effective in selling their appliances with service contracts and local repair. Although there are a wide range of supportive services, the following are most prevalent:
Warranty: Warranties are used to mitigate the risks of a malfunctioning product or the risk of making a wrong purchase decision regarding misinformation about a product. There are several types of durable products, retail stores, and even service products for which warranties are expected. These warranties can provide a wide array of restitution, with a very limited warranty at one end of the continuum and extended warranties at the other. An example of the former is a VCR manufacturer that provides a 30-day warranty on the motor drive and no other coverage. The Craftsman tools division of Sears Roebuck reflects the other extreme. A broken shovel will be replaced, no questions asked, after a full summer of use. A good jewelry store has a warranty backing up every diamond ring it sells. A warranty is violated when products do not perform as expected (are defective) at the time the sale occurs. In this case, sellers should honor the warranty by offering a refund or a replacement.
Money-back guarantee: The ultimate warranty is the money-back guarantee, also know as a “satisfaction guarantee. ” Essentially, it is a simple guarantee that if a buyer is not satisfied with a product or service, a refund will be made. To the customer, a money-back guarantee reduces risk almost totally. There are certain market segments (e.g., low risk takers) that perceive this service as very important. This service is effective only if the product is superior and the product will be returned by only a few people. In some case, companies will try to get out of money-back guarantees. There are many ways a customer can take action to pressure a company to stick to its advertised guarantee. The first should always involve contacting the company by means that are recorded, in order to maintain a thorough record of all communications regarding the guarantee. If the company still fails to follow through with its guarantee, the buyer may contact his or her state’s attorney general, the seller’s state attorney general, the Better Business Bureau, or the Federal Trade Commission (FTC).
AppleCare covers both global parts and labor repair coverage for the device, along with phone/Internet technical support for questions about Apple hardware and software.
A photo of the pamphlets and CDs that come with an Apple product as part of the warranty.
10.2.6: Problems with Packaging
Many of the problems in packaging can be related to issues regarding labels, graphics, safety, and the environment.
Discuss the ethical issues that commonly arise in product packaging and labeling
- Marketers can use label information to mislead consumers by providing false information to exaggerate the attributes of their product.
- There are many cases in which marketers use pictures in packaging that do not represent the actual product.
- Some marketers label their products as environmentally friendly even though the products don’t actually have environmentally friendly attributes.
The moral principles that guide decision making and strategy.
Problems With Packaging
Packaging is a crucial element in the marketing of a product, as it is essentially the casing that the produt comes in. So after all the advertising and promotion, when customers go to the store and pick up the product, it is only the packaging that they see, smell, and touch. It is thus extremely important for the marketer to ensure that potential customers like what they see. The packaging should be appropriate to the product, and induce customers to buy it.
Unfortunately, ethics play a large role in the problems with packaging and labeling. Many of the ethical issues are related to the environment, labels, graphics, and safety. Packaging needs to provide a certain amount of information to the consumer, depending on the type of product. For instance, a beverage needs to provide information on the product name, its size, and its nutritional content. In contrast, the packaging of a toy needs to provide the age range suitable for children to play with it.
In packaging, the most common issues that arise include:
Problems With Label Information
Sometimes marketers use label information to mislead consumers by providing untrue information to exaggerate the attributes of their product. Labels that display nutrition information like low fat, fat free , cholesterol free, and 100% pure juice are examples.
Often, products have words such as “fat free,” “low-fat,” or “organic” on the labels. The labels could mislead the customer into thinking something that may not be the case.
Cartons of fat free Half&Half.
Problems With Packaging Graphics
There are many cases in which marketers use pictures in packaging that do not represent the actual product. For example, packaging may make a certain product look nice and attractive, but the actual product may not be as good as depicted once opened. In addition, some store brands or other small brands try to imitate the way big brands package their products. This leads to confusion among consumers.
Problems With Packaging Safety
Consumers are concerned with packaging safety issues, especially when it comes to products for children. Marketers should avoid unsafe packaging that uses high ingredients of chemicals that are unsuitable for young children and are not tamper-proof.
Problems With Environmental Issues
Some marketers tend to label their products as environmentally friendly. However, the products actually do not have environmentally friendly attributes. For example, degradable trash bags actually remain intact for decades in a landfill. Packaging and labeling also produce a lot of excess waste that just gets thrown out once the consumer has purchased the product. In addition, the work that goes into producing the packaging and labeling is wasted once the consumer has purchased the product. It goes into the trash and is never seen of or thought of again.
10.2.7: Global Considerations in Branding and Packaging
At the global marketing level, a company needs to launch appropriate marketing plans so results can be achieved across multiple countries.
Discuss how language, colors, customs, aesthetics, and placement affect global branding and packaging in products
- Language differences cause many problems for marketers in designing advertising campaigns and product labels. It is important to double-check the translation of a marketing campaign to make sure the meaning being conveyed in another language is the company’s intended message.
- Colors also have different meanings in different cultures. Marketers should pick country-appropriate colors to make sure the local consumers are not offended or pushed away from the product due to colors used in the packaging.
- All cultures have their own unique set of customs and taboos. It is important for marketers to learn about these so that they will know what is acceptable and what is not for their marketing programs.
A variety of a language that is a characteristic of a particular group of the language’s speakers. The term is applied most often to regional speech patterns.
- economies of scale
The cost advantages that an enterprise obtains due to expansion. As the scale of output is increased, factors such as facility size and usage levels of inputs cause the producer’s average cost per unit to fall.
- global marketing
Global marketing is marketing on a worldwide scale, reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.
Global Marketing Plans
Ultimately, at global marketing level, a company trying to speak with one voice is faced with many challenges when creating a worldwide marketing plan. Unless a company holds the same position against its competition in all markets (market leader, low cost, etc.), it is impossible to launch identical marketing plans worldwide. When branding and packaging for international products, careful consideration must be placed on factors such as language, colors, customs, aesthetics and placement.
The importance of language differences cannot be overemphasized. There are upwards of 7,000 languages in the world. These differences cause many problems for marketers in designing advertising campaigns and product labels. Language problems become even more serious once the people of a country speak several languages. For example, in Canada, labels must be in both English and French, like this ad for Pepsi in Canada. In India, there are over 200 different dialects, and a similar situation exists in China.
Pepsi Ad in Canada
In Canada, all product labels must appear in both official languages: English and French.
Colors also have different meanings in different cultures. For example, in Egypt, the country’s national color of green is considered unacceptable for packaging, because religious leaders once wore it. In Japan, black and white are colors of mourning and should not be used on a product’s package. Similarly, purple is unacceptable in Hispanic nations because it is associated with death.
Customs and Taboos
All cultures have their own unique set of customs and taboos. It is important for marketers to learn about these so that they will know what is acceptable and what is not for their marketing programs.
The term aesthetics is used to refer to the concepts of beauty and good taste. The phrase, “Beauty is in the eye of the beholder,” is a very appropriate description for the differences that exist between cultures. For example, Americans believe that suntans are attractive, youthful, and healthy. However, the Japanese do not. These key differences apply to labels and branding as well.
How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the product’s position in the market place. For example, a high-end product would not want to be distributed via a “dollar store” in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique.
Effective global advertising techniques do exist. The key is testing advertising ideas using a marketing research system proven to provide results that can be compared across countries. The ability to identify which elements or moments of an ad are contributing to that success is how economies of scale are maximized.