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Marketing 5th Edition Grewal Solutions Manual

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Marketing 5th Edition Grewal Solutions

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Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

Chapter 11
Product, Branding, and Package Decisions

Tools For Instructors

• Brief Chapter Outline


• Learning Objectives
• Chapter Overview (“Summing Up”)
• Extended Chapter Outline with Teaching Tips
• PowerPoint Slides with Teaching Notes
• Answers to End of Chapter Learning Aids
• Chapter Case Study
• Additional Teaching Tips

Brief Chapter Outline

Complexity and Types of Products


Product Mix and Product Line Decisions
Branding
Branding Strategies
Packaging
Summing Up
End of Chapter Learning Aids
Chapter Case Study: Oprah Winfrey, A Brand Unto Herself

Learning Objectives

LO1 Describe the components of a product.


LO2 Identify the types of consumer products.
LO3 Explain the difference between a product mix’s breadth and a product line’s depth.
LO4 Identify the advantages that brands provide firms and consumers.
LO5 Explain the various components of brand equity.
LO6 Determine the various types of branding strategies used by firms.
LO7 Distinguish between brand extension and line extension.
LO8 Indicate the advantages of a product’s packaging and labeling strategy.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 1
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

Chapter Overview (“Summing Up”)

LO1 Describe the components of a product.

The product itself is important, but so are its associated services, such as support or
financing. Other elements combine to produce the core ¬customer value of a product: the
brand name, quality level, packaging, and additional features.

LO2 Identify the types of consumer products.

These products tend to be classified into four groups: specialty, shopping, convenience,
and unsought products. Each classification involves a different purchase situation and
consumer goal.

LO3 Explain the difference between a product mix’s breadth and a product line’s
depth.

Breadth, or variety, entails the number of product lines that a company offers. Depth
involves the number of categories within one specific product line.

LO4 Identify the advantages that brands provide firms and consumers.

Brands play important roles in enabling people to make purchase decisions more easily and
encouraging customer loyalty. For firms specifically, they also constitute valuable assets
and improve a company’s bottom line and help protect against competition.

LO5 Explain the various components of brand equity.

Brand equity summarizes the value that a brand adds, or subtracts, from the offering’s
value. It comprises brand awareness, or how many consumers in the market are familiar
with the brand; brand associations, which are the links consumers make be-tween the brand
and its image; and brand loyalty, which occurs when a consumer will only buy that brand’s
offer. Brand equity also encompasses the concept of perceived value, which is a subjective
measure that consumers develop to assess the costs of obtaining the brand.

LO6 Determine the various types of branding strategies used by firms.

Firms use a variety of strategies to manage their brands. First, they decide whether to ¬offer
manufacturer and/or private-label brands. Second, they have a choice of using an overall
corporate brand or a collection of product line or individual brands. Third, to reach new
markets or extend their current market, they can extend their current brands to new
products. Fourth, firms can co-brand with another brand to create sales and profit synergies
for both. Fifth, firms with strong brands have the opportunity to license their brands to
other firms. Finally, as the marketplace changes, it is often necessary to reposition a brand.

LO7 Distinguish between brand extension and line extension.

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in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

Whereas a brand extension uses the same brand name for a new product that gets
introduced into new or the same markets, a line extension is simply an increase of an
existing product line by the brand.

LO8 Indicate the advantages of a product’s packaging and labeling strategy.

Similar to brands, packaging and labels help sell the product and facilitate its use. The
primary package holds the product, and its label provides product information. The
secondary package provides additional consumer information on its label and facilitates
transportation and storage for both retailers and their customers. Labels have become
increasingly important to consumers because they supply important safety, nutritional, and
product usage information.

Extended Chapter Outline With Teaching Tips

I. Complexity Of Products And Types Of Products

A. Complexity of Products (PPT slide 11-4)

B. Types of Products (PPT slide 11-5)

Check Yourself: Several questions are offered for students to check their understanding of
core concepts. (PPT slide 11-6)

1. Explain the three components of a product.


Answer: Core customer value, actual product, and associated services.

2. What are the four types of consumer products?


Answer: Specialty, shopping, convenience, and unsought.

II. Product Mix And Product Line Decisions (PPT slide 11-7, 8)

A. Change Product Mix Breadth (PPT slide 11-9)

1. Increase Breadth
2. Decrease Breadth

B. Change Product Mix Depth (PPT slide 11-10)

1. Increase Depth
2. Decrease Depth

C. Product Line Decisions (PPT slide 11-11)

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in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

D. Product Line Decisions for Services (PPT slide 11-11)

Check Yourself: Several questions are offered for students to check their understanding of
core concepts. (PPT slide 11-12)

1. What is the difference between product line breadth versus depth?


Answer: A firm’s product line breadth (sometimes also referred to as variety)
represents the number of product lines offered by the firm. Product line depth, in
contrast, is the number of categories within a product line.

2. Why change product line breadth?


Answer: Firms often add new product categories to capture new or evolving
markets, increase sales, and compete in new venues. Sometimes it is necessary to
delete entire product lines to address changing market conditions or meet internal
strategic priorities.

3. Why change product line depth?


Answer: Firms may add items or SKUS to address changing consumer preferences
or preempt competitors while boosting sales. From time to time it is also necessary
to delete SKUs to realign resources. The decision to delete SKUs is never taken
lightly. Generally, substantial investments have been made to develop and
manufacture the products. Consumer goods firms make pruning decisions regularly
to eliminate unprofitable items and refocus their marketing efforts on more
profitable items.

III. Branding (PPT slide 11-13, 14)

A. Value of Branding for the Customer and the Marketer (PPT slide 11-15)

1. Brands Facilitate Purchasing


2. Brands Establish Loyalty
3. Brands Protect from Competition and Price Competition
4. Brands Reduce Marketing Costs
5. Brands Are Assets
6. Brands Impact Market Value

B. Brand Equity (PPT slide 11-17)

1. Brand Awareness (PPT slide 11-17)


2. Perceived Value (PPT slide 11-18)
3. Brand Associations (PPT slide 11-19)
4. Brand Loyalty (PPT slide 11-20)

Check Yourself: Several questions are offered for students to check their understanding of
core concepts. (PPT slide 11-21)

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 4
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

1. How do brands create value for the customer and the firm?
Answer: Branding provides a way for a firm to differentiate its product offerings
from those of its competitors and can be used to represent the name of a firm and
its entire product assortment, one product line, or a single item. Brand names, logos,
symbols, characters, slogans, jingles, and even distinctive packages constitute the
various brand elements firms use, 17 which they usually choose to be easy for
consumers to recognize and remember.

2. What are the components of brand equity?


Answer: The components of brand equity are brand awareness, perceived value,
brand associations, and brand loyalty.

IV. Branding Strategies

A. Brand Ownership (PPT slide 11-22)

1. Manufacturer Brands (PPT slide 11-22)


2. Private-Label Brands (PPT slide 11-23)
3. Exclusive Co-brands (PPT slide 11-24)

B. Naming Brands and Product Lines (PPT slide 11-25)

1. Corporate or Family Brands


2. Corporate and Product Line Brands
3. Individual Brands
4. Choosing a Name

C. Brand Extension (PPT slide 11-26)

D. Brand Dilution (PPT slide 11-27)

E. Cobranding (PPT slide 11-28)

F. Brand Licensing (PPT slide 11-29)

G. Brand Repositioning (PPT slide 11-30)

Check Yourself: Several questions are offered for students to check their understanding of
core concepts. (PPT slide 11-31)

1. What is the difference between manufacturer, private/label, and generic brands?


Answer: Manufacturer brands, also known as national brands, are owned and
managed by the manufacturer, some famous manufacturer brands are Nike, Coca-
Cola, KitchenAid, and Marriott. Private-label brands, also called store brands,
house brands, or own brands, are products developed by retailers. Some
manufacturers prefer to make only private-label merchandise because the cost of

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 5
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

developing and marketing a manufacturer’s brand is prohibitive. Generic brands


target a price-sensitive segment by offering a no-frills product at a discount price.
These products are used for commodities like milk and eggs in grocery stores and
underwear in discount stores. However, even in these markets, the popularity and
acceptance of generic products has declined.

2. What is co-branding?
Answer: Co-branding is the practice of marketing two or more brands together, on
the same package or promotion. Primarily due to credit card companies, such as
Visa and MasterCard, the practice has greatly increased in the past decade. Airlines
were among the first to co-brand with credit card companies (such as the United
Airlines Visa Card), but recently, firms in other industries, such as banking, retail,
and restaurants, have begun forming similar alliances. Starbucks was the first in the
quick-service restaurant industry to offer its own Starbucks credit card in alliance
with Visa. Co-branding can enhance consumers’ perceptions of product quality 70
by signaling “unobservable” product quality through links between the firm’s brand
and a well-known quality brand. For example, NutraSweet’s claim to be a sugar
substitute that was safe and left no aftertaste got a boost after both Coca-Cola and
Pepsi started offering products that contained it, was included on its labels and in
its promotions. Co-branding may fail if the brands’ owners cannot resolve financial
disputes about revenue or royalty sharing.

3. What is the difference between brand extension and line extension?


Answer: Whereas a brand extension uses the same brand name for a new product
that gets introduced into new or the same markets, a line extension is simply an
increase of an existing product line by the brand.

4. What is brand repositioning?


Answer: Brand repositioning refers to a strategy in which marketers change a
brand’s focus to target new markets or realign the brand’s core emphasis with
changing market preferences.

V. Packaging (PPT slide 11-32)

A. Product Labeling (PPT slide 11-33)

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in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

Powerpoint Slides With Teaching Notes

Power Point Slide Teaching Notes


11-1: Product, Branding, and Packaging
Decisions

11-2: Learning Objectives These are the learning objectives for this
chapter.

11-3: Red Bull Ask students: How many use energy drinks?

Do you buy Red Bull branded products?

How did you feel about the product?

Pushing the envelope is just what Red Bull


wants its brand to be known for doing. By
sponsoring events such as the space jump or
even its annual Flugtag competition, Red Bull
brands itself as fun, a little crazy, and ready for
anything.

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in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-4: Complexity of Products Marketers involved with the development,


design, and sale of products think of them in an
interrelated fashion.

At the center is the core customer value; next


is the actual product, followed by associated
services.

11-5: Types of Products Consumer products are products and services


used by people for their personal use.

Marketers further classify these products by the


way they are used and purchased.

11-6: Check Yourself 1. Core customer value, actual product, and


associated services.
2. Specialty, shopping, convenience, and
unsought.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 8
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-7: Product Assortment and Product Line This chapter uses Colgate-Palmolive brands as
Decisions examples.

Many students may be familiar with the names


Colgate and Palmolive but not know they have
so many other products.

11-8: Product Assortment and Product Line Students should understand that each item is
Decisions called a stock keeping unit (SKU) and the
category depth is the number of SKUs within a
category.

11-9: Change Product Mix Depth Ask students: What are the pros and cons of
offering competing products in the same
category?

The primary advantage is to increase overall


sales and profits.

But at the same time, adding competing


products can cannibalize sales of current brands.

Firms must determine the net effect on sales and


the overall impact on competitive products.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 9
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-10: Change Product Mix Breadth Ask students: Why would a company want to
increase its product mix breadth? Why would it
want to decrease it?

Students should comment that they would


increase to capture new or evolving markets and
increase sales.

Decreasing might be due to changing market


conditions or internal strategic priorities.

11-11: Product Line Decisions It increases depth by adding one more scent.

This is type of ad depicts both research and


advertising.

11-12: Check Yourself 1. Breadth (sometimes also referred to as


variety) represents the number of product
lines offered by the firm; Product line
depth, in contrast, is the number of
categories within a product line.
2. To capture new or evolving markets,
increase sales, and compete in new venues.
address changing market conditions or meet
internal strategic priorities.
3. To address changing consumer preferences
or preempt competitors while boosting
sales, to realign resources.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 10
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-13: Branding Brand identification takes many forms.

Ask students: How many of you can sing the


Oscar Meyer jingle?

Student will get a kick out of the YouTube ad


(always check before class).

It is the one of the original 1965 Oscar Meyer


ads.

Note: Please make sure that the video file is


located in the same folder as the PowerPoint
slides.

11-14: What Makes a Brand? Group activity: Identify a brand that you
recognize primarily by each of these elements.

Brand Name: Most brands.


URLs: www.eBay.com
Logos & Symbols: TAG Heuer
Characters: Toucan Sam
Slogans Coca-Cola – Real Taste and Zero
Calories
Sound: Law & Order “Doink Doink“

11-15: Value of Branding for the Customer Group activity: Have students pick a well-
and the Marketer established brand.

Have them provide examples of how the brand


provides value.

For example, consider eBay. The brand


facilitates instant recognition, consumers are
avidly loyal, which reduces competition from
other online auctions and reduces expensive
marketing ads.

The brand is a valuable asset that they protect


through copyrights, and directly affects their
profits.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 11
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-16: History in Advertising This clip looks at the history of advertising and
how the industry has matured over time.

Note: Please make sure that the video file is


located in the same folder as the PowerPoint
slides.

11-17: Brand Equity: Awareness Brand equity cuts both ways; customers dislike
some brands because of the firm’s actions or
their negative perceptions.

Nike has been the target of many labor activists,


which causes some consumers to refuse to
purchase or wear Nike products.

Remind students what they have learned about


consumer behavior.

When consumers recognize a need, they begin


with an internal search, during which they
consider any brand they already know. If
consumers are not aware of the brand, they
simply will not purchase it.

11-18: Brand Equity: Perceived Value These retailers offer designer products at
reduced prices.

In some cases, they use well known designers


for their lines of clothing.

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Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-19: Brand Equity: Brand Associations Target teamed up with high-fashion designer
Jason Wu to create reasonably priced, yet very
fashionable apparel.

Firms sometimes develop a personality for the


brand – as if it were human.

Ask students what brands have personalities –


they might mention McDonald’s and Pepsi
(young).

Consumers develop links between brands and


their own identity.

Some brands are just “not for them.”

Ask students: How many of you proudly wear


Abercrombie & Fitch clothing?

How many choose never to wear this brand?

How do you perceive this brand’s message?

11-20: Brand Equity: Brand Loyalty Brand loyalty provides the firm with high value.
State Farm has built their brand equity by
having loyal customers.

Ask students: Once you have chosen an


insurance company or a bank, how likely is it
that you will switch?

How likely is it that you will switch due to an


increase in price? Is it important for the firm to
spend a lot of money marketing to you, a loyal
customer? Do you pay much attention to ads or
direct mail pieces from competition?

To further illustrate brand loyalty, ask students:


would you leave a store if your particular brand
were not in stock? When you order a Sprite in a
restaurant and the server asks, “Is 7-Up okay?”
do you say no?

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 13
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-21: Check Yourself 1. Brands facilitate the consumer search


process are valuable in a legal sense, can
lead to lower marketing costs because the
brand and its associations help sell the
product and brands have real market value
as a company asset.
2. Brand awareness, perceived value, brand
associations, and brand loyalty.

11-22: Brand Ownership Unlike Europe, where store brands such as


Tesco (U.K. grocery chain) were extremely
popular, in the United States, few store brands
had achieved such status and were often
considered inferior to manufacturer or national
brands.

Today, many store brands are well established,


such as Kenmore, Charter Club, and Presidents’
Choice.

11-23: Brand Ownership Private-label brands, also called store


brands, house brands, or own brands, are
products developed by retailers.

Some manufacturers prefer to make only


private-label merchandise because the costs of
developing and marketing a manufacturer’s
brand are prohibitive.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 14
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-24: Brand Ownership There are two basic brand ownership strategies:
manufacturer brands and retailer/store brands.

The brands can be marketed using a


common/family name or as individual brands.

11-25: Naming Strategies Ask students: Name a firm that uses a


corporate or family brand?

A corporate and product line brand? Individual


lines?

Family brands include Heinz and Del Monte.


Detergents are good examples of firms using
individual brands: Tide, Bold, Gain and Surf.

11-26: Brand Extension Ask students: What are the advantages of a


brand extension?

They should reply that the firm can spend less


on brand awareness.

That the positive consumer acceptance will


spread to the new product and a synergy exists
between the two products.

In the picture above one might use the crest


toothpaste and floss together.

This web link is to the State Farm Website. You


can see from the Website that State Farm has
extended their brand past insurance to include
mutual funds and banking products.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 15
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-27: Brand Dilution A brand is only as good as its last extension.


Many firms try to take their brands just one
more step, only to find the extension hurts rather
than helps the parent brand.

For example, McDonald’s agreed to license a


McKids line of clothing, but the line was not as
successful as it had hoped it would be.

Ask students: In terms of this slide, what do


you think McDonald’s did wrong? They should
comment that this was not a great fit. That the
perceptions might not have been of the highest
quality.

11-28: Co-branding Co-branding benefits the participating brands


by attracting the consumers of one brand to the
others.

Remind students of the FedEx/Kinko’s


example.

The synergy between these two brands helped


ensure a successful co-branding effort.

Video: “Zite Teams Up with Bergdorf


Goodman”

11-29: Brand Licensing The NBA licenses products like these bobble
head figures of Dallas Mavericks and San
Antonio Spurs players to a manufacturer in
exchange for a negotiated fee.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 16
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-30: Brand Repositioning The product is now positioned as a detergent


and an air freshener.

11-31: Check Yourself 1. Manufacturer brands are owned and


managed by the manufacturer. The
manufacturer develops the merchandise,
produces it to ensure consistent quality, and
invests in a marketing program to establish
an appealing brand image. Private-label
brands are products developed by retailers.
2. Co-branding is the practice of marketing
two or more brands together, on the same
package or promotion.
3. Whereas a brand extension uses the same
brand name for a new product that gets
introduced into new or the same markets, a
line extension is simply an increase of an
existing product line by the brand.
4. Brand repositioning refers to a strategy in
which marketers change a brand’s focus to
target new markets or realign the brand’s
core emphasis with changing market
preferences.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 17
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

11-32: Packaging Although often overlooked as a marketing tool,


packaging helps determine the success of a
product.

The chapter covers many new packaging


innovations including FlexCan, Daily Gloss,
smart lids, Labatt blue, aseptic drink bottles, and
snack and seal as seen in the ad above.

In some instances, such as Coca-Cola or Aunt


Jemima Maple Syrup, the package has become
synonymous with the brand.

Ask students: What packages are so distinct


that it helps make the brand successful?

Possible answers are: Perrier, Altoids, and


Tiffany’s turquoise box.

See if you can bring in examples of other bottled


water in unusual bottles such as Fuji and Fred.

11-33: Product Labeling Label information is determined by regulations,


and labeling rules vary from country to country.

Certain terms convey specific meanings, such as


“natural,” “organic,” “made in the USA,” and
products must meet specific tests before placing
such terms on their label.

Group activity: Look at the label of a snack or


drink you may have brought to class. What
information does it provide? How does it
support the marketing of this item?

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 18
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

Answers To End Of Chapter Learning Aids

Marketing Applications

1 LLBean guarantees that its products will last forever. What features of a pair of pants
from LLBean would be part of the actual product and which would be part of the
associated services?

Features of the actual pants product might include brand name, design, durability, quality,
fit and color. Features of the services associated with the delivery of the pants might
include customer service, product support, warranties, and L.L. Bean’s return policy.

2 Classify each of the following products into either convenience, shopping, specialty,
or unsought goods: toothpaste, Life insurance, Sharp TV, Eggo Waffles, lettuce,
Coach handbag, Adidas Soccer cleats, furniture.

Toothpaste, Eggo Waffles, and lettuce are likely convenience products because it is
frequently purchased with very little thought.

Life insurance is an unsought product. Unsought products are goods or services that
customers rarely think about purchasing or do not know about.

Sharp TV and adidas soccer cleats are examples of shopping products. Shopping products
are products that consumers will spend a fair amount of time comparing alternatives.
Furniture may be considered either a shopping product or a specialty product depending
on the consumer or the reason for purchase.

A Coach handbag would be considered a specialty product. Specialty products are those
for which customers have a strong preference and will spend a considerable amount of
time searching for.

3 Study the following two product mixes below are provided. Product Mix 1: A, B, C
and D are the lines and for Product Mix 2: X, Y and Z are the lines.

Which mix has more breath and why? Which mix is deeper and why?

A firm’s product mix breadth represents a count of th enumber of product lines offered by
the firm. Product mix 1 has greater breadth because it offers four product lines versus
three in product mix 2. Product line depth equals the number of products in a product line.
Product mix 2 has greater depth because two of its product lines have four products in
them versus three in product mix 1.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 19
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

4 Suppose you are the coffee buyer at Kroger’s. There is a strong corporate initiative to
increase store label merchandise. Discuss the advantages and disadvantages of
offering private label coffee.

Private label brands (also called retailer/store brands) are products developed by retailers
who often contract with manufacturers to produce products. Store brands now account
for almost 20% of purchases in North America. By eliminating the middle man, retailers
can often enjoy higher margins on store brand products. In addition, when a customer
becomes loyal to a store brand, that brand is exclusive to the retailer, making the customer
loyal to the retailer as well. Many of today’s consumers perceive store brands as having
higher perceived value than their national counterparts.

A major disadvantage of offering a store brand includes promotional costs. National


brands have huge budgets for building brand awareness. In addition, if a customer has a
negative experience with a brand, they may also attribute this negativity to the retailer as
well.

5 Identify a specific brand that has developed a high level of brand equity. What
specific aspects of that brand establish its brand equity?

Student answers will vary. In picking a brand that they think has high equity value;
students should explore why they believe it has high value and what determines that value.

You could also review the top brands listed in the book and ask students to discuss why
these brands may be considered to have higher levels of equity than other brands.

IBM has developed a high level of brand equity through its longevity, its global reach, its
reputation for innovation and Nobel Prize–winning work, the quality of its products, its
sponsorship of sporting and cultural events, and the high level of customer service it
provides to its customers.

6 Are you loyal to any brands? If so, pick one and explain why you believe you are
loyal, beyond that you simply like the brand. If not, pick a brand that you like and
explain how you would feel and act differently toward the brand if you were loyal to
it.

Student answers will vary. This question challenges students to consider exactly why they
may be brand loyal toward one product but not another, which may be because of product
characteristics, the students’ experience, or their opinion of the company that provides the
product. Therefore, they might mention that they only purchase that brand to the exclusion
of all others, they purchase the product frequently, and they often visit the store that sells
it.

For example, some students might claim that they are loyal to Starbucks, in that they
generally do not get coffee from any other retailer unless there is absolutely no Starbucks
within reasonable walking or driving distance.

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Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

7 Sears owns several store brands, including DieHard, Kenmore, and Craftsman. Each
brand features many models that may appeal to various customer groups. Wouldn’t it
be easier to just identify them all as Sears? Justify your answer.

Sears is using an individual branding strategy. The advantage of individual branding is


that each product has an image and identity that is unique. This facilitates the positioning
of each product, by allowing a firm to position its brands differently.

8 Do you think all edible items sold in a grocery store should have an ingredient and
nutrition label? Consider the perspectives of consumers, the manufacturer, and the
store.

To expand students’ understanding of the roles and responsibilities of the different parties,
this question challenges them to consider the benefits and costs of labels for each group.

Most food in a grocery store should have an ingredient and nutrition label, with the
exception of, say, unpackaged produce. Consumers can make more informed purchase
decisions, and the store might improve its customer satisfaction, because its shoppers know
that all the information they need appears on every product package. From the perspective
of the manufacturers, however, broader labeling might seem intrusive and could make
sales of cheaper quality, high fat, and high sugar foods more difficult; thus, rather than
seeing it as an opportunity to connect positively with consumers, manufacturers might
object to comprehensive labeling.

9 You are the brand manager for a firm that makes herbs, spices, and other food
additives. You have had complaints from some of your retail outlets that they are
finding empty bottles of pure vanilla extract stashed around the store. Apparently, due
to the high (35 percent) alcohol content of pure vanilla extract, people are grabbing
the cute little bottles, having a drink, and getting rid of the evidence. Anecdotal
evidence from store employees indicates that the majority of the imbibers are
teenagers. The cost of placing a tamper proof cap on the extract is a relatively
insignificant percentage of the purchase price, but will make it more difficult to open,
particularly for older customers. Also, there has been a significant rise in sales to
retailers as a result of the vanilla bean “addicts.” What should you do?

Student answers will vary. This question leads the student to examine the ethical aspects
of packaging and its impact on the brand.

Students should address the low cost of the tamper proof cap and its benefits to keeping
the product safe and solving the problem. Though the vanilla bean target market also
includes the elderly, the brand can address that by having a fairly easy tamper-proof design
such as a foil tab lift off. In the end, it is better to make the product safe for the customer
which also thwarts the vanilla bean addicts.

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Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

Quiz Yourself

1 One key feature of the value of a brand is that:

A. it often protects the firm from competition and price competition.


B. it no longer needs to be supported by advertising and promotion.
C. if it becomes a generic name, the brand is worth even more.
D. it cannot be successfully imitated by a retailer's own brand.
E. competitors will frequently abandon a sector altogether rather than compete.

Strong brands protect the firm somewhat from competition because the brand differentiates
the firm's products, making customers more loyal.

2 It is almost impossible to watch a sporting event on television without seeing Nike's


"swoosh" check mark, which is Nike's:

A. name.
B. symbol.
C. design.
D. term.
E. all of these.

The "swoosh" is a brand symbol associated with Nike. The firm has invested a great deal
of time and money in making the swoosh one of the most recognizable brand symbols in
the world.

Net Savvy

1 Visit MAC Cosmetic’s website (http://www.maccosmetics.com/). Identify and briefly


describe the depth and the breadth of its product lines?

Student’s answers will vary. MAC offers a variety of product lines including product lines
for lips, eyes, nail color, hair color, and beauty tools. These product lines make up the
depth of MAC Cosmetic’s product mix. Within each line, MAC has several products. The
nail color and lip color line have numerous products of varying colors and benefits. These
lines have significant product depth. Some of MAC Cosmetic’s other product lines might
have fewer products in them.

2 Go to BMW's website (http://www.bmwusa.com/) and identify a few recently


introduced brand extensions to the marketplace. Discuss whether you believe the
brand extension examples you provided will benefit or harm the firm.

Some of BMW’s new brand extensions include the new X5 SUV and the 4-series coupe.
These products are very similar to current products that the firm offers, and will therefore
only add to BMW’s market share rather than harming the firm.

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in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

Chapter Case Study: Oprah Winfrey, A Brand Unto Herself

1 Visit the company website (http://www.oprah.com/index.html) and identify and


describe the different product lines that it markets.

Oprah categorizes her products by: spirit, health, relationships, fashion and beauty, books,
food, entertainment, home and garden, and money. This website also sells Oprah’s books,
videos, and O magazine. Each of these product lines is targeted towards Oprah’s primary
customer, women, and is founded in Oprah’s motto to “live your best life.”

2 How would you describe its product line breadth?

The breadth of the product lines vary depending on the product line. The items listed for
fashion and beauty and health for example, are far more inclusive than items for food or
entertainment.

3 Review the different product categories in each of the company’s product lines.
Which has the greatest depth? Which has the least??

Oprah categorizes her products by: spirit, health, relationships, fashion and beauty, books,
food, entertainment, home and garden, and money. In terms of articles and coverage
provided, all of the product lines seem to have an equal amount of depth.

4 How has the company positioned its brand? How does it go about communicating its
position?

The company has positioned its brand to meet the needs of women and help women live
their best life. Oprah is one of the best known brands in the world, and the Oprah website
ties all of the products back to Oprah, indicating that she endorses them.

Additional Teaching Tips

This chapter examines product lines, mix, and breadth. Different branding strategies are
addressed. Students use critical thinking skills to discover why brands are valuable to a
firm. Product packaging and labeling also contribute to the firm’s overall strategy and
those concepts are also reviewed in this chapter.

This is a fun exercise to get students excited about brands. To demonstrate the value of
a brand, instructors may want to start the topics discussion by gathering brand symbols
(such as below) and brand character icons such as the ones below without any identifying
writing on it. These can be obtained through a Web search of the character for instance
type “Tony the Tiger” in your search engine and download the graphic. Place the symbols
on a transparency in color. Start the class by dividing the class into four or five groups.

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in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 11 - Product, Branding, and Package Decisions Marketing 5th

The instructions: The leader is to write down the brand name from input of group members.
Time the exercise. It usually doesn’t take long depending how many characters you use.
At the conclusion declare a winner and then ask the students “Why are brands valuable?”
Students realize the importance of brand recognition through the brand character or icon.

Online tip: The same exercise can be used in an online forum in synchronous connection
with the class where each of the brand characters are shown. The first student that types in
the correct brand name would ‘win’ and the instructor shows the next image. A
synchronous course discussion can then occur about the importance of the brand
character/logo.

Product packaging is known as the last five seconds of marketing. Instructors can bring in
an empty Pringle’s can as well as other interesting examples of packing. Pringles is one of
the first package designs to protect from breakage of food items such as potato chips. The
class can address how packaging becomes the last five seconds of marketing. Package
label requirements by the FDA and package design for shelf space should also be
addressed.

Remember to review the Newsletter for Instructors and its accompanied PowerPoint
presentation, which integrates examples and discussion from the newsletter. Each
newsletter contains over ten article abstracts on hot topics, plus a selection of current
commercials and videos for you to use with your class. The newsletter also includes a
guide that explains where the articles, commercials, and videos best fit in your Marketing
course.

© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution 24
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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