Marketing Essentials

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Marketing Essentials
n Chapter 31 Branding, Packaging, and Labeling
Section 31.1 Branding Elementsand Strategies
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SECTION 31.1
Branding Elements and Strategies
What You'll Learn

• The nature, scope, and importance of branding in
  product planning
• The various branding elements
• The different types of brands
• How to classify branding strategies

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SECTION 31.1
Branding Elements and Strategies
Why It's Important
The right name is an important part of every
successful business. The name and symbols of a
business or a product project the personality of
the company, product, or service.
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SECTION 31.1
Branding Elements and Strategies
Key Terms

• brand
• brand name
• brand mark
• trade name
• trade character
• trademark
• manufacturer brand

• private distributor brand
• generic brand
• brand extension
• brand licensing
• mixed-brand strategy
• co-branding strategy

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SECTION 31.1
Branding Elements and Strategies
Branding

• A brand is a name, term, design, or symbol (or
  combinations of them) that identifies a business
  or organization and the products that they offer.
  Brands are divided into two categories
• corporate brands
• product brands

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SECTION 31.1
Branding Elements and Strategies
Branding

• Corporate brands identify the business and
  reflect quality, value, and reliability.
• Example Coca-Cola, Disney, McDonald's, and
  Citibank
• Product brands connote quality and reliability
  for a particular product.
• Example Pepsi, Coke, Barbie, Whopper, and
  Big Mac

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SECTION 31.1
Branding Elements and Strategies
Branding

• A brand name is the word, group of words,
  letters, or numbers of a brand that can be
  spoken.
• Example PT Cruiser, Mountain Dew,
  SnackWells, and K2
• A brand mark is a symbol, design, or distinctive
  coloring or lettering that identifies a brand.
• Example U.S. Postal Service's eagle, Apple
  Computer's apple

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SECTION 31.1
Branding Elements and Strategies
Branding

• A trade name is the legal name under which a
  company or division of a corporation does
  business.
• Example Amex, Dell, Kellogg's, and Xerox
• A trade character is a brand mark with human form
  or characteristics.
• Example The Jolly Green Giant, the Pillsbury
  Doughboy

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SECTION 31.1
Branding Elements and Strategies
Branding
A trademark is a brand name, brand mark, trade
name, trade character, or a combination of these
given legal protection by the federal government
and noted by the trademark symbol (?).
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SECTION 31.1
Branding Elements and Strategies
Branding
Brand names, brand marks, trade names, trade
characters, and trademarks are often combined to
form a firm's corporate symbol or name.
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SECTION 31.1
Branding Elements and Strategies
Top Ten Brands
Brands are often a companys most valuable asset.
What is the total 1999 advertising spending for
these top ten brands? Do you think these brands
would continue to be valuable if the companies
reduced or eliminated their advertising?
Rank Brand Company 1999 Advertising
(in millions of dollars)
1 Chevrolet General 762.4 vehicles Motors Corp.
2 ATT ATT Corp. 711.4 telephone services
3 Dodge Daimler- 651.7 vehicles Chrysler
4 Ford Ford Motor 629.5 vehicles Company
5 McDonald's McDonald's 627.2 restaurants Corp.
6 Toyota Toyota Motor 569.4 vehicles Corp.
7 Sears Sears, 556.1 department stores Roebuck
Co.
8 Sprint Sprint Corp. 470.1 telephone services

9 Chrysler Daimler- 426.5 vehicles Chrysler
10 Nissan Nissan Motor 416.9 vehicles Co.
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SECTION 31.1
Branding Elements and Strategies
Importance of Brands in Product Planning

• The use of brands is important in product
  planning for several reasons. Branding
• builds customer loyalty
• assures customers that products carrying the same
  brand are of a consistent quality
• addresses new target markets
• establishes an image for a product or company

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SECTION 31.1
Branding Elements and Strategies
Generating Brands

• Seventy-five percent of companies introduce a new
  product name each year. Brand names are generated
  by
• company employees
• specialized computer software programs
• branding agencies, naming consultants, and
  public relations agencies
• Half of all corporate name changes occur because
  of company mergers and acquisitions.

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SECTION 31.1
Branding Elements and Strategies
Types of Brands

• Three classifications of brands are
• manufacturer brands
• private distributor brands
• generic brands

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SECTION 31.1
Branding Elements and Strategies
Types of Brands

• Manufacturer brands, also called producer brands,
  are owned and initiated by manufacturers.
• Example General Electric, Heinz, Motorola
• Private distributor brands, also called private
  brands, store brands, or dealer brands, are owned
  and initiated by wholesalers and retailers.
• Example Radio Shack, Kmart

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SECTION 31.1
Branding Elements and Strategies
Types of Brands
Generic brands represent a general product
category and do not carry a company or brand
name. The packaging carries only a description of
the product, such as pancake mix or paper
towels. They are usually much cheaper than
brand-name products.
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SECTION 31.1
Branding Elements and Strategies
Brand Strategies

• Branding strategies are the ways companies use
  brands to meet sales and company objectives.
  Strategies include
• brand extensions
• brand licensing
• mixed branding
• co-branding

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SECTION 31.1
Branding Elements and Strategies
Brand Extension

• Brand extension is a branding strategy that uses
  an existing brand name for an improved or new
  product in the product line.
• Example Ocean Spray Cranberry Juice extended
  to Cran-Apple, Cran-Raspberry, etc.
• Advantages Reduces risk of new product failure
• Disadvantages Over-extending a product line can
  cause brand dilution

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SECTION 31.1
Branding Elements and Strategies
Brand Licensing
Brand licensing is the legal authorization by a
trademarked brand owner to allow another company
(the licensee) to use its brand, brand mark, or
trade character for a fee. Advantages Enhance
company image, sell more products
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SECTION 31.1
Branding Elements and Strategies
Mixed Brands

• A mixed-brand strategy involves simultaneously
  offering a combination of manufacturer, private
  distributor, and generic brands.
• Example Union Carbide sells Glad brand
  garbage bags and generic brand garbage bags.

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SECTION 31.1
Branding Elements and Strategies
Co-Branding

• A co-branding strategy combines one or more
  brands to increase customer loyalty and sales for
  each individual brand.
• Example Kelloggs Pop-Tarts are made only
  with Smuckers fruit filling. Starbucks Coffee
  Co. opens coffee shops inside Barnes Noble
  bookstores.

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ASSESSMENT
31.1
Reviewing Key Terms and Concepts
1. What is the difference between a brand name
and a brand mark? 2. Why is branding important to
product planning? 3. Name three types of
brands. 4. List four different branding
strategies.
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ASSESSMENT
31.1
Thinking Critically
Internet service providers are teaming with
airlines, financial institutions, media outlets,
celebrities, and non-profit groups to offer
private-label Web access. Do you think that
individuals want to receive their Internet access
from the New York Yankees, David Bowie, Pepsi, or
their local bank? Why or why not?
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31.1
Graphic Organizer
Types of Brands
TYPES OF BRANDS
Manufacturer Brands
Private Distributor Brands
Generic Brands
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Marketing Essentials
End of Section 31.1