-Branding -Brand strategies -Packaging -Global branding and packaging -Warranties [SLIDE 1] Even consumers who know very little about marketing understand the high-level concept of a brand, even if they cannot define it. The general definition is that a brand is a name, term, symbol, design or combination thereof that identifies and differentiates a seller’s products. It is a concept, image and words, that helps the market quickly understand where the company and products sit in the market. The reason everyone is focused on branding is that it has clear benefits in quickly communicating an image. The core visible components of a brand are: -Brand name: the printed or spoken name of a company or product line. GM, YMCA, Campbell’s, 7-Eleven. -Brand mark: A symbol or image representing the brand. The Mercedes-Benz image on hood ornaments and elsewhere. -Brand equity: The value a company receives based on market perception of the brand. While brand name and mark are visible, brand equity can be even more important. Brand equity supports price and increases brand loyalty, the consistent preference for one brand over all others. It can drive a market sector’s identification with the brand. When people think of overnight mail, FedEx comes to mind. A number of internet search engines still exist, but most people only thing of Google. Brand equity is a valuable asset and is the goal of branding. Brands can be local, national, or global. A global brand is defined as one where at least one-third of the brand’s revenue comes from outside the firm’s home country. [SLIDE 2] Brands cannot be automatically defined by the company, as a market’s perception of the company and products has a strong impact on the evolution of a brand identity in the market. That does not mean that a branding strategy is not needed. Plan to create a brand, but like everything else in marketing, you must pay attention to the market and adapt. One of the first modern decisions retailers must make is the question of using a manufacturer’s brand or pushing a private brand, also referred to as a private label. Trader Joe’s is a grocery chain that built its market by focusing on private label products. They are made by many of the same companies who manufacture for the major companies, but they are branded for Trader Joe’s. Private labels have grown recently, but mainly for a lower priced option alongside the strong manufacturers’ brands. As opposed to Trader Joe’s, Safeway has Private Select and other private labels, but those brands share shelf space with the major manufacturer brands. A subset of a private brand is a captive brand. This is a store-owned brand with its own name. It is manufactured exclusively for the retail outlet but has its own name. Simple Truth is a Kroger captive brand for organic food. Regular private brands are usually lower priced, while captive brands allow stores to compete with higher-priced products. The next branding issue is choosing between individual branding or family branding. Individual branding is a separate brand for different products while families link multiple products under the same brand. P&G has individual brands for Tide, Cheer, Bold, Dash and other products. Jack Daniels sells whiskey, coffee, barbeque sauce, and other items all under the single family brand. The final key branding issue is whether or not to co-brand, where two or more brand names appear on a product or packaging. Co-branding is often seen with airline, hotel and other companies linking with a credit card company to link services. When products and services can be used together to increase market satisfaction, co-branding should be considered. [SLIDE 3] There are three key intellectual property (IP) protections for companies: patents, trademarks, and copyrights. Branding uses trademark protections as a key tool. Trademarks are an exclusive right to use a brand or part of a brand. A service mark is the same as a trademark but aimed at protecting services. This is one example where the overall description of a product as including both product and services is split. Examples of trademarks are: -Sounds, such as the MGM lion’s roar. -Shapes, such as the Jeep front grille and the Coco-Cola bottle. -Ornamental colors and designs, such as the Nike swoosh and the color of the Duracell battery. -Phrases, such as “Own a Piece of the Rock,” and “Do the Dew”. -Abbreviations, such as Bud, Coke, or the Met. The Digital Copyright Act (DMCA) adds both copyright and trademark laws to the digital world. One risk of not protecting a trademark is that it might become a generic product name. As mentioned previously, Kleenex is associated with tissues. The company is struggling to enforce its trademark and not lose it. Bayer lost the name Aspirin as a trademark and aspirin is now a generic name. Rolls-Royce, Xerox, McDonalds and many other companies allocate legal and marketing budgets to protect their trademarks. [SLIDE 4] Packaging is often the first thing people see about a product. That is because there are a number of clear functions served by packaging. The first three are classic functions, while the fourth, recycling, has been growing in importance over the last two decades. Containing and protecting products The most obvious function is that of containing and protecting. Products are handled multiple times between manufacturing and the consumer bringing the item home. Packages protect products from breakage, evaporation, spillage, spoilage, and other conditions. Promoting products Packaging also is used to identify the brand, list ingredients and provide directions. However, the packaging real estate can also be used to more strongly promote the product, helping the product stand out in a competitive landscape such as crowded store shelves. For instance, market research shows that health-conscious consumers are likely to think that any food is probably food for them as long as it comes in green packaging. Facilitating storage, use, and convenience Consumer products often move from manufacturers to retailers via wholesalers and distributors. Those firms need product packaging that helps them store inventory in a safe and easy to access manner. Retailers want packages that help with security. In a consumer’s home, people look for ways to easily store and access products, including in a child-proof manner. Those needs often collide. "Clam shell"packaging stores like to use for security is often described as one of the most frustrating things consumers must manage. Facilitating recycling and reducing environmental damage A 2016 study showed that 63% of US consumers believe that reusable and repurposable packaging is important when choosing products, and that number is expecting to continue rising. Competing studies leave it unclear how much consumers are willing to pay for this type of packaging, so firms are researching how to provide environmentally acceptable packaging at lower cost. [SLIDE 5] Labeling is an integral component of packaging. It serves to describe the product both from a marketing and a legal standpoint. While branding can be placed on product packaging, national, state and local governments may also choose to require labeling to describe things such as ingredients, calories, and other information on a product label. There are two primary types of labeling: -Persuasive labeling: Focuses on promotional themes and logos, consumer information is secondary. -Informational labeling: Provides content to help consumers make proper product selections and to lower cognitive dissonance after the purchase. Nutritional labeling is an example of informational labeling and is required by different governmental levels. The Food and Drug Administration (FDA) is the federal government agency that mandates the need for such labeling. Nutritional labeling requirements differ from nation to nation, so simple translation is not enough; companies must research and reflect the labeling laws and rules for each country and modify labels appropriately. Technology is also moving into labeling. Sensors have begun to be added to packaging to let consumers know about product freshness and safety. As mentioned above, the environmental movement has increased the importance of recycling and repurposing to packaging. It is also having another impact. Greenwashing is the marketing concept of linking products to environmental activism, often with no objective analysis. In the first decade of this century, companies created more than 300 “certifications” claiming products were environmentally clean. In 2011, the Federal Trade Comission (FTC) began to issue guidelines and regulations to help consumers have confidence that products marketed as green actually are environmentally friendly. [SLIDE 6] Universal product codes (UPC) were first introduced in 1974. A UPC is a series of thick and thing vertical lines (bar codes) readable by optical scanners. That introduction revolutionized the supply chain and inventory control by allowing automatic tracking of products from manufacturer to the consumer. Codes on packages let wholesalers know what is coming into and leaving their facilities. The shipping industries, from the USPS, UPS, and FedEx, to smaller, local firms, also track shipments in process. Just as importantly, almost every grocery store in the US has optical scanners, which automatically read the bar code, link to software, and then communicate the product purchase to both the cash register for payment and the inventory system for re-order. [SLIDE 7] When working in a global market, companies must be aware of three branding options for extending packaging into new countries: -One brand name everywhere: Coca-Cola uses the same name and brand for its namesake product around the world. -Adaptations and modifications: if a brand name cannot be pronounced in another language or has a negative connotation (Iran has a detergent named Barf), branding can be modified. -Different brand names in different markets: adopting to a local language or culture, such as PepsiCo spelling its eponymous cola Pesci in Argentina to match pronunciation. While the last two sound very much the same, adaptions tend to be minor changes for language while different names are driven by culture. For instance, Unilever’s Axe brand of male grooming products is called Lynx in England, Ireland, Australia, and New Zealand, not because of a translation issue, but because the company feels that is a name that expresses better in those cultures. Aside from those issues, there are three other cultural and language-based concerns that can impact packaging and labeling: -Translation: Accurate translations are critical from a regulatory standpoint but are not sufficient. Coca-Cola had to remove all products from Italian shelves because the ingredients were not listed according to local regulations. -Multi-language: Package layout becomes more complex in nations such as Belgium, Canada, and Finland where packing must be bilingual. -Aesthetics: What visually works in one nation is not accepted in others. Red is a sign of witchcraft in some countries while green is a sign of danger in others. -Geography: Extreme climates and long-distance shipping can require extra packaging for safety and durability, expenses that are not needed in major cities or temperate climates. [SLIDE 8] Previously, we defined a product as the full result of an exchange, including both product and services. For many products, a warranty is a critical component. A warranty is provided as a confirmation of the quality or performance of a good or service. In the U.S., the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act of 1975 was passed to help consumers understand warranties and get action from manufacturers and dealers. There are two types of warranties: -Express warranty: A written guarantee ranging from the simple, "100-percent cotton", to the complex "Complete satisfaction guaranteed", to detailed written documents expressing clear quality standards and specific remedies. -Implied warranty: An unwritten guarantee that a good or service is fit for the purpose for which it was sold. In the U.S., all sales have an implied warranty under the Uniform Commercial Code.