Principles of Marketing - Packaging and Labeling

Packaging

Packaging includes the activities of designing and producing the container for a product. The package may include up to three levels of materials. E.g. Old spice aftershave

Bottle - primary package

Cardboard box - secondary package

Corrugated box - shipping package

Packaging is any container or wrapping in which the product is offered for sale and can consist of a variety of materials such as glass, paper, metal or plastic depending on what is to be contained. Packaging is an important part of the product that not only serves a functional purpose, but also acts as a means of communicating product information and brand character. The packaging is often the consumer’s first point of contact with the actual product and so it is essential to make it attractive and appropriate for both the products and the customers need.

Due to the growth of mass merchants and self-service, manufacturers have come to realize the value of packaging as a marketing tool. Today it is a vital part of a firm’s product-development strategy; a package may even be an integral part of the product itself. Packaging has become a potent marketing tool. Well-designed packages can create convenience and promotional value.

Developing an effective package for a new product requires several decisions. The first task is to establish the packaging concept: defining what the package should basically be or do for the particular product. Decisions must include the following elements: size, shape, materials, color, text and brand mix.

The packaging elements must also be harmonized with decisions on pricing and other marketing elements. Once the packaging is designed, it must be tested.

Factors that have contributed to packaging growing use as a marketing tool:- • Self service: An increasing number of products are sold on a self-service basis. The package attract attention, describe the products features, create consumer confidence and make a favorable overall impression • Consumer affluence: Rising consumer affluence means consumers are willing to pay a little more for the convenience, appearance dependability and prestige of better packages. • Company and brand image: packages contribute to instant recognition of the company or brand. It differentiates a product from competitors by its design, color, shapes and methods. • Innovation opportunity: Innovative packaging can bring large benefits to consumers and profits to producers. Packaging can be a major element of new-product planning. • Promotional tool: It serves as a promotional tool and is the final form of promotion the consumer sees prior to making purchase decision. • Reminder: A package also serves as a reminder after a purchase is made.

Although packaging is expensive, developing effective packaging may cost several hundred thousand dollars and take several months to complete. Companies must pay attention to growing environmental and safety concerns about packaging. Shortages of paper, aluminum, and other materials suggest that marketers should try to reduce packaging.

Labeling

Labeling is a particular area within the packing field that represents the outermost layer of the product. Labels have a strong functional dimension, in that they include warnings and instructions, as well as information required by law on best industry practice. Labels state, at the very least, the weight or volume of the product. A bar code and the name and contact address of the producer. Consumer demand has also led to the inclusion of far more product information, such as ingredients, nutritional information and the environment friendliness of the product. Information about the extent to which the packing is made of recycled is also much more common now. Sellers must label products. The label may be a simple tag attached to the product or an elaborately designed graphic that is part of the package. The label might carry only the brand name or a great deal of information. Even if the seller prefers a simple label, the law may require extra information.

Principles of Marketing - Branding

Branding

 

Branding is an important element of the tangible product and, particularly in consumer markets. It is a means of linking items within a product line or emphasizing the new individuality of product items. Branding can also help in the development of a new product by facilitating the extension of a product line or mix, trhough building on the consumer’s perceptions of the values and character represented by the brand name.

The common definition of brand, accepted by most marketers is that it consists of any name, term, design, style, words, symbols or any other feature that identifies the goods, and services of one seller from those of other sellers or that distinguish one product from another in the eyes of the customer.

Branding involves researching, developing and implementing brand names, brand marks, trade characters and trademarks. Branding is the art and cornerstone of marketing. Branding is a task that requires a significant contribution from marketing communications and is a long term exercise.

A successful brand is one which creates and sustains a strong, positive and lasting impression in the mind of a buyer. An organization’s approach to branding depends on its overall product mix and individual line strategy.

A brand is a complex symbol that can convey up to 6 levels of meaning

·         Attributes eg. Mercedes suggests expensive, well-built, well-engineered, durable, high-prestige automobiles.

·         Benefits attributes must be translated into functional and emotional benefits. The attribute "durable" could translate into the functional benefit.

·         Values producer’s values eg Mercedes stands for high performance, safety and prestige

·         Culture certain culture e.g. Mercedes represents German culture, organized, efficient, high quality

·         Personality project a certain personality

·         User the brand suggests the kind of consumer who buys and uses the product

Brand name: is any word or illustration that clearly distinguishes one seller’s goods from another. It can take the form of words or initials.
Trade name: is the legal name of an organization, which may or may not relate directly to the branding of its products e.g. Procter and Gamble-do not display the company name, although it is shown on the back or side of the pack-Persil, Surf.
Trademark: is a brand, name, symbol or logo, which is registered and protected for the owners role use. Trademarks are valuable properties, as organizations invest much time and money in creating them and educating consumers about what they stand for e.g. coca-cola.
Brand mark: is specifically the element of the visual brand identity that does not consist of words, but of design and symbols eg, McDonalds symbol (M)

The benefits of branding

The consumer

Easier product identification

Communicates features and benefits

Helps products evaluation

Establishes product’s position in the market

Reduces risk in purchasing

The manufacturer

Helps creates loyalty

Defends against competition

Creates differential advantage

Allows premium pricing

Helps targeting/positioning

Increases power over retailer

The retailer

Benefits from brand marketing support

Attracts customer

Helps differentiate the product from competitors

Types of brands: -

There are many forms of branding but primarily there are manufacturer, distributor, price and generic brands

Brand Equity: - a) is an asset b) a degree of brand-name recognition perceived brand quality, strong mental and emotional associations, and other assets such as patents, trademarks and channel relationship. c) is a measure of a number of different components, including the beliefs, images and core associations consumer have about particular brand.Brand equity is the positive differential effect that knowing the brand by the buyer has on the seller.

Principles of Marketing - Product Management

Product Management

Product development: means offering new or improved products for present market. By knowing what the present markets needs, a firm may see ways to add or modify product features, create several quality levels, or add more types or sizes to better satisfy customers while seeking, also, to expand.

The Product Life Cycle

Understanding the product life cycle is key to understanding how to market a product. Many marketing campaigns are won and lost because of knowledge of the product life cycle. If understood, the product life cycle will tell you how to market a product and how much money to spend.

The product life cycle is divided into four parts; introduction, growth, maturity, and decline. These parts of the cycle follow a the curve you would normally expect, a long slow initial acceptance, a period of rapid growth, a long length of time where the product has fully saturated the market, and its eventual decline in obsolescence.

The introduction phase of the product life cycle is the easiest to market, but the most resource and cost intensive. The target market is the early adopter. The problem in the early adopter is the most difficult consumer to convince. The early adopter seeks status. They crave new products, not because of usefulness, but sexiness. They want to feel this product they are buying into will bring them some amount of prestige among their constituents.

The question then is, how do you market to them? Ad and event intensive sales are probably the most useful. Ads should focus less on the feature-benefits and more on the emotional aspect of the product. One company that makes this distinction very clear in their advertisements is Apple Computers. When advertising for their personal computing products, they use the PC vs. Mac ads. These ads are entertaining and grab your attention, but focus mainly on the feature-benefit aspects of a product. The iPhone ads are very low on feature-benefits and high on the coolness factor.

Growth is the period when everyone knows your product, but they aren't sure if they want to use it or not. Here it is important to stop focusing on the coolness of a product, and start focusing on the features and benefits of a product. At this point, the early adopters have shown the world how cool the product is and how cool they are for having one. The rest of you market wants to know why it is they should get one. If they don't see a real benefit, then they will move on to the next product.

Maturity is the least expensive segment of a product's life cycle. When a product has generally been accepted, and the market has reached its final penetration, it has reached this point. Your marketing techniques should focus on maintaining customers and customer satisfaction. Your advertisements can focus on what you can do for them while they keep using you product.

Decline is the most difficult segment for most companies. Decline requires a lot of soul searching. If a company continues in the status quo, the product will decline and the company will continue to spend money on it. This is the recipe for disaster. A company has one of two paths it can take. Either, you can rebuild the product, or you must discontinue the product.

If the company wishes to revitalize a product, it usually does so in one of two ways. The first is nostalgia marketing. You remind the consumer about the product and that it was always there. The second, is to refresh the product. You can create new promotional material, new packaging, new advertising or new features.

The process of rebuilding a product's market is often not feasible because of obsolescence. If this is the case, the company shouldn't just discontinue the product and leave the customer hanging. A well designed marketing plan should inform customers of the end of the products life cycle, and move them onto another of the companies replacement products.

MANAGING PRODUCT LIFE CYCLE

Stages in Product Life Cycle • Introduction • Growth • Maturity • Decline

Introduction • Price: High • Quality: Low • Number of versions: Few • Number of competitors: Few • Intensity of Competition: Little • Advertising: High to introduce • Distribution: Little

Growth • Price: High and dropping • Quality: Low and growing • Number of versions: Few and increasing • Number of competitors: Few and growing • Intensity of Competition: Growing • Advertising: Still high to expand • Distribution: Growing

Maturity • Price: Dropping and stabilizing • Quality: High • Number of versions: Many • Number of competitors: Many/dropping • Intensity of Competition: High • Advertising: Stable • Distribution: Maximum

Decline • Price: Dropping • Quality: High • Number of versions: Dropping • Number of competitors: Dropping • Intensity of Competition: Depends • Advertising: Dropping • Distribution: Losing