Marketing - Chapter 31 - Branding, Packaging, and Labeling

Package - the physical container or wrapping for a product (estimated 10% of price spent on package, design and development)

Brand - a name, term, design, symbol, or combination of these elements that identifies a business, product, or service, and sets it apart from its competitors

all products of a company

may identify:

family of related products

one product

• a brand strategy consistently and repeatedly tells customers and prospective customers why they should buy the company's products or services

Packaging

Functions of Packaging

• Selling the Product
• Communicating Product Identity
• Providing Information
• Meeting Customer Needs
• Protecting Consumers
• Protecting the Product
• Theft Reduction

Mixed bundling - packaging two or more different goods or services in one package (airfare and lodging package)

Price bundling - placing two or more similar products on sale for one package price (cheaper than purchased separately

Blisterpacks - packages with preformed plastic molds surrounding individual items arranged on a backing

Contemporary Packaging Issues

Aseptic packaging - uses technology to keep foods fresh without refrigeration for long periods

Environmental Packaging - environmentally sensitive designs

Cause packaging - use of package to promote social or political issues

Brand label

Labeling

an informative tag, wrapper, seal, or imprinted message that is attached to a product or its package

Three types of label - brand label; descriptive label; grade label

gives the brand name,

trademark, or logo

Grade label - states the quality of the product

USDA Beef Grades

Beef Grades - 8 Grades (Top 5 for human consumption)

U.S. Prime – This is the highest grade of beef with the most fat marbling. This meat is very tender and only accounts for about 2.9% of all graded beef. U.S. Prime is usually reserved for high end dining establishments. Because this beef has such a high level of fat marbling, it is excellent for dry heat cooking methods.

U.S. Choice – Choice beef is widely available to consumers in supermarkets and restaurants. This beef has a good amount of fat marbling, although less than U.S. Prime. U.S. Choice accounts for roughly 50% of all graded beef. This beef can typically be cooked with either dry or moist heat methods without causing excessive dryness. U.S. Choice is an excellent economic alternative to U.S. Prime.

U.S. Select – Select beef is also widely available in the retail market. It is much more lean than U.S. Choice and tends to be less tender or juicy. U.S, Select was formerly labeled as “Good.” Due to the low fat content in this meat, it should be reserved for moist heat cooking methods to prevent drying.

U.S. Standard and U.S. Commercial – Standard and Commercial grades are very low in fat content and may be considerably less tender. When sold in the retail market they typically go ungraded or are labeled under the store brand name and sold for lower prices.

Utility, Cutter, and Canner Grades – These grades may be completely devoid of fat marbling or cut from older animals. These grades are typically reserved for making processed meat products and canned goods.

Descriptive label - gives information about the product's use, construction, care, performance, and other features (ingredients, date and storage information, proper use and care)

Chapter 31 - Branding, Packaging, and Labeling

Labeling Laws

• Fair Packaging and Labeling Act of 1966 - established mandatory labeling requirements (FDA and FTC)
• Nutrition Labeling and Education Act of 1990 - requires that labels give nutritional information (fat, carbs, protein, sodium, cholesterol, calories)
• FDA requires health warnings on alcoholic beverages, cigarette packages, genetically engineered animals (voluntary for eng. animals)

Federal Trade Commission responsible for regulating labeling and monitoring false or misleading advertising

• 1992 - guidelines for environmental claims on labels

USDA - responsible for the following

• Organic Foods Production Act of 1990 - guidelines and penalties for misuse of organic labels (produced without hormones, antibiotics, herbicides, chemicals)
• Country of Origin Labeling Act of 2002 - country of origin label be placed on all fruits, vegetables, peanuts, meats, and fish

Elements of Branding

Brand Name - word or group of words that represent a product or service

(Toyota Highlander, Big Mac, Cherry Coca Cola)

Trade Name (corporate brand) - identifies and promotes a company or a division of a particular corporation

(Proctor & Gamble, Disney, Nike)

Elements of Branding

Brand mark (logo) - a unique symbol, coloring, lettering used to identify a business

Trade character - brand mark that has human characteristics (Aflac Duck, Cap'n Crunch,

Jolly Green Giant, Pillsbury Doughboy)

Trademark - brand name, brand mark, trade name, trade character, or combination that is registered with the federal government and given legal protection

Generating Brand Names

• Create in house
• Hire branding agencies, naming consultants, or public relations firms
• Computer software programs

Capitalize on brand exposure (extend product lines)

Build product recognition and customer loyalty

Importance of Brands in Product Planning

Change company or product image (Buick)

Ensure quality and consistency

Types of Brands

National Brands (Producer brands) - owned by national manufacturers or by companies that provide services (Coca Cola, Hershey Foods, Ford, Apple, Nike)

• generate the majority of sales for most product categories
• 65% appliances
• 78% food products
• 80% gasoline
• 100% cars

Types of Brands

Private distributor brands - developed and owned by wholesalers and retailers.

Types of Brands

• manufacturer's name may not appear on the product

Sears - Craftsman; Kenmore

Wal-Mart - Sam's Choice

• more profitable for retailers

Generic brands - products that do not carry a company identity

• priced 30-50% lower than manufacturer brands
• price 10-15% lower than private distributor brands

Branding Strategies

Brand extension - branding strategy that uses an existing brand name to promote a new or improved product

Brand licensing - legal authorization by a brand owner to allow another company to use its brand, brand mark, or trade character for a fee

• reduce risk of product failure by using an already established brand name
• risk of overextending brand

Branding Strategies

Mixed Brands - strategy of offering a combination of manufacturer, private distributor, and generic brand to consumers

Examples:

• Whirlpool manufacturers its own line of refrigerators and also contracts to make Kenmore for Sears
• Michelin manufactures its own brand of tires as well as Sears brand of tires

Branding Strategies

Co-branding - combines one or more brands in the manufacture of a product

Examples: Reese's Puffs Cereal; Lay's w/KC Masterpiece

• capitalize on the popularity of other companies' goods and services