{"id":148,"date":"2015-03-11T21:09:21","date_gmt":"2015-03-12T01:09:21","guid":{"rendered":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/chapter\/6-4-branding-labeling-and-packaging\/"},"modified":"2023-01-13T11:59:18","modified_gmt":"2023-01-13T16:59:18","slug":"branding-labeling-and-packaging","status":"publish","type":"chapter","link":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/chapter\/branding-labeling-and-packaging\/","title":{"raw":"6.4 Branding, Labeling, and Packaging","rendered":"6.4 Branding, Labeling, and Packaging"},"content":{"raw":"
\r\n

Learning Objectives<\/p>\r\n\r\n<\/header>\r\n

\r\n
    \r\n \t
  1. Understand the branding decisions firms make when they\u2019re developing new products.<\/li>\r\n \t
  2. Identify the various levels of packaging for new products.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n

    What comes to mind when someone says Coke or Nike or Microsoft? According to BusinessWeek<\/em> magazine, the Coca-Cola brand is the strongest<\/em> brand in the world. However, a global study of consumers sponsored by Reuters found that Apple has the best<\/em> brand. What is a \u201cbrand\u201d and what do these studies mean when they report that one brand is the strongest or the best?<\/p>\r\n\r\n

    \r\n

    Branding<\/h1>\r\n

    We have mentioned brands periodically throughout this chapter. But what is a brand? A brand is a name, picture, design, or symbol, or combination of those items, used by a seller to identify its offerings and to differentiate them from competitors\u2019 offerings. Branding is the set of activities designed to create a brand and position it in the minds of consumers. Did you know that The Beatles started a recording studio called Apple? When Apple Computer (the iPod company) was formed, Apple Corp., Ltd. (the Beatles\u2019 recording studio), sued Apple Computer because two companies with the same name can create confusion among consumers. This wasn\u2019t much of a problem when Apple was only selling computers, but following the release of the iPod and launch of Apple\u2019s iTunes program, a case could be made that the companies\u2019 offerings are similar enough for consumers to confuse the two companies and their products. In fact, it wasn\u2019t until very recently that the lawsuit over the name was settled, some thirty years after the initial lawsuit was filed. Nonetheless, the situation signifies how important brand names are to the companies that own them.<\/p>\r\n

    A successful branding strategy is one that accomplishes what Coke and Apple have done\u2014it creates consumer recognition of what the brand (signified by its name, picture, design, symbol, and so forth) means. Consequently, when marketing professionals are considering whether a potential new offering fits a company\u2019s image, they are very concerned about whether the offering supports the organization\u2019s brand and position in the mind of the consumer. For this reason, many consider branding to be much more than how the product is packaged or labeled, and they are right. Characteristics of the offering, such as pricing and quality, have to support the brand\u2019s position. If Apple (the brand) stands for innovation, then products and services have to be innovative. But branding itself refers to strategies that are designed to create an image and position in the consumers\u2019 minds.<\/p>\r\n

    A brand name, like Apple, is the spoken part of a brand\u2019s identity. A brand mark is the symbol, such as Coke\u2019s wave or Apple Computer\u2019s multicolor apple (not to be confused with Apple Records\u2019 green apple), associated with a brand. Brand names and brand marks are important to companies because consumers use them to make choices. That\u2019s why it was important to sort out the Apple brand. Each company wanted to make sure that consumers were getting what they wanted and would know what each brand meant.<\/p>\r\n

    An important decision companies must make is under which brand a new offering will be marketed. For example, Black & Decker makes power tools for consumers under its Black & Decker brand, while tools for more serious do-it-yourselfers and professionals are under its Dewalt brand. If Black & Decker decided to add to its Dewalt line new products such as coolers, portable radios, CD players, and other accessories construction professionals might find useful at a job site, the company would be creating a brand extension. A brand extension involves utilizing an existing brand name or brand mark for a new product category.<\/p>\r\n

    Why would Black & Decker add these accessories to the Dewalt line? If the company did, it would be because Dewalt already has a good reputation for high quality, long-lasting durability, and performance among construction professionals. These same professionals would trust the Dewalt brand to deliver. How a company like Black & Decker goes about building this trust is the subject of later chapters. For now, let\u2019s consider whether it is better for a company to market a new product via a brand extension or create an entirely new brand for the product.<\/p>\r\n

    One thing firms have to consider when they\u2019re branding a new offering is the degree of cannibalization that can occur across products. Cannibalization occurs when a firm\u2019s new offering eats into the sales of one of its older offerings. (Ideally, when you sell a new product, you hope that all of its sales come from your competitors\u2019 buyers or buyers that are new to the market.) A completely new offering will not result in cannibalization, whereas a line extension likely will. A brand extension will also result in some cannibalization if you sell similar products under another brand. For example, if Black & Decker already had an existing line of coolers, portable radios, and CD players when the Dewalt line of them was launched, the new Dewalt offerings might cannibalize some of the Black & Decker offerings.<\/p>\r\n

    Some marketers argue that cannibalization can be a good thing because it is a sign that a company is developing new and better offerings. These people believe that if you don\u2019t cannibalize your own line, then your competitors will.<\/p>\r\n\r\n\r\n

    \r\n\r\nDo you remember the parts of a brand that are typically found?\r\n\r\n[h5p id=\"32\"]\r\n\r\n<\/div>\r\n
    \r\n

    Packaging Decisions<\/h1>\r\n

    Another set of questions to consider involves the packaging on which a brand\u2019s marks and name will be prominently displayed. Sometimes the package itself is part of the brand. For example, the curvaceous shape of Coca-Cola\u2019s Coke bottle is a registered trademark. If you decide to market your beverage in a similar-shaped bottle, Coca-Cola\u2019s attorneys will have grounds to sue you.<\/p>\r\n\r\n\r\n[caption id=\"attachment_145\" align=\"aligncenter\" width=\"300\"]\"The Figure 6.15: Sometimes the package itself is part of a licensed brand. Coke\u2019s curvaceous bottle is an example.[\/caption]\r\n

    Packaging has to fulfill a number of important functions, including<\/p>\r\n\r\n