Branding and Packaging

Marketing

Adapted from

Types of markets

Considering the customer's point of view, there are four major market groups: consumer (1), business (2), institutional (3) and distributors (4).

End users' markets / Non-end users' markets
1 BUSINESS TO CONSUMER (Retailing)
sale of all products and services to consumers / 2 BUSINESS TO BUSINESS
sale of all products and services used by enterprises
3 BUSINESS TO INSTITUTIONS
sale of all products and services to the public administration
and other political, financial and educational institutions / 4 BUSINESS TO DISTRIBUTORS (Wholesaling)
A distributor is a middleman between the manufacturer and retailer

Branding and packaging

The basic function of packaging has always been to protect and contain a product. In a competitive market, branding and packaging are important and have become an integral part of the product. We instantly recognise products by the size, shape and colour of packaging.

The marketing department give a product a unique look and decide on the package design. This will incorporate the brand name and will differentiate the product from competitors. This is known as a unique selling point.

Package design

The shape, size and colour are important factors when packaging a product. The marketing department will want to make the packaging attractive and distinctive. Coke's packaging is dominated by red. This helps consumers to recognise a product instantly, when they are in a shop. The same applies to the shape of the packaging. Deodorants and shampoos, for example, come in all shapes and sizes. Remember that the actual product is inside the container, so the packaging and advertising are all that will attract us to try a product in the first place.

Brand name and logo

Large manufacturers understand the importance of their brand name. Kellogg's, Adidas and Microsoft are all household names which we associate with quality. As a result, we are likely to buy one of their products when we go shopping rather than an untried or unknown one even if it is say, a supermarket's own brand. This is why it is important for their brand name or a striking logo to be prominent on packaging.

Product differentiation

The main aim of product differentiation is to give a product a distinctive image which will differentiate it from similar products. An expensive perfume or aftershave might be sold in an elegantly designed bottle. This sort of packaging suggests quality and would be targeted at a person with taste. Even if the product itself was not very good, the packaging alone could give the impression that it was.

Question

Fizz, a soft drinks company, is bringing out a new product, which is a mixture of lime, apple juice and lemonade. They want to target it at school children. Give two factors that they should consider in their packaging, and explain your reasons.

Answer 1

Surj wrote: Fizz should make sure their name is clearly shown on the packaging. Anyone who has tried their products before and liked them would be likely to buy this new one. As they want to sell to schoolchildren it would be a good idea to use bright colours on the packaging.

Examiner's note

Surj's answer shows that he only understands the basics of packaging. There is very little detail, and he has also only given one reason. This answer would probably get an 'E' grade.

Answer 2

Saf wrote: Fizz should make sure their name is clearly shown on the packaging to make sure their product stands out. Anyone who has tried their products before and liked them would be likely to buy this new one as opposed to another similar product. As they want to sell to schoolchildren it could also be a good idea to use bright colours on their packaging as this has been a very successful way of attracting children in the past.

Examiner's note

Saf's answer shows that she understands packaging quite well as she gives good reasons. She could, however, have been a little more detailed and used business terms. This answer would probably get a 'C' grade.

Answer 3

Marlon's answer: Fizz should make sure their brand name and logo are clearly shown on the packaging to help the consumer recognise their brand and to differentiate the product. This would allow Fizz to take advantage of brand loyalty. Anyone who has tried their products before and liked them would be likely to buy this new one as opposed to another similar product. As their target market is schoolchildren it could also be a good idea to use bright colours on their packaging and perhaps even a cartoon character, as these have been very successful ways of attracting children in the past.

Examiner's note

Marlon's answer is very thorough. He gives good reasons for his suggestions and uses the correct business terms, like 'brand loyalty' and 'differentiate the product'. This answer would probably get an 'A' grade.

Packaging / Imballaggio, confezione / Branding loyalty / Fedeltà alla marca
Branding / Politica di marca / unique selling point / Proposta unica di vendita
own brand / Marchio commerciale / striking / Evidente, manifesto
Target / Mirare / Person with taste / Persona raffinata
Design / Progettare , creare, disegnare / stand out / distinguersi

Branding and packaging - Test Bite

1. The name given to a product is called its brand name.

true
false

2. Brand names and logos are the only important design features in packaging.

true
false

3. McDonalds' golden 'M' is an example of a company logo.

true
false

4. Consumers buying different brands are an example of brand loyalty.

true
false

5. Using similar packaging to other brands helps differentiate your own product.

true
false

6. Tesco's Cola is an example of an own brand product.

true
false

7. Impulse buying can be affected by distinctive packaging.

true
false

Branding and brand names - © BBC | British Council 2004

Worksheet 1

Skim read the following text

The name is the most important element of a successful brand. Packaging changes, advertising changes, products even change but brand names never change.

Where do great brand names come from? All different sources, they may come from family names or perhaps the inventor’s favorite color or animal or sometimes the names are just completely made up. For example, McDonald’s is a family name, Adidas was created from the inventors name Adi Dassler, Volvo means “to roll” in Latin and KODAK was completely made up by the inventor George Eastman because he thought it was unusual and different

Worksheet 2

Discuss the following questions in pairs:

1. Why are brand names important?

2. Name three different sources of brand names.

3. Do you think brands are important? Why?

4. Do you have a favorite brand? What is it and why do you like it?

Worksheet 3

Can you guess where the following brand names came from?

Match the brands in the box with the correct text below.

1. Toyota 2. Chanel no.5. 3. Rolls Royce
4. Reebok 5. Nike 6. Nivea

a) From the Latin word meaning, ‘snow-white’.

b) This was the fifth perfume made by the same company.

c) Named after the Greek Goddess of Victory

d) Originally a Japanese family name Toyoda. The inventors changed one letter

to make it easier to pronounce overseas.

e) Named after an African Gazelle

f) The family names of two men, one a motor enthusiast and the other an

engineering genius.

Worksheet 4

Rank your favorite brands from 1-10 (1 = like the most, 10 =like the least)

Worksheet 5

TASK

In pairs invent a new product and give it a name.
Think about the following points:
• What is special or unusual about your product?
• Why would people want to use or buy it?
• How does the name relate to the product?
Once you have chosen the name for your product prepare a short oral
presentation to give to the rest of the class. In your presentation you should
describe your product and explain how and why you chose its name. Both of you
should speak in the presentation.

Here are some useful phrases that may help you with your presentation:

We would like to introduce our new invention…
We chose the name … because…
You can use it to…

If you can’t think of any ideas for a new product use one of these ideas.

1. A thick slimy (vischioso) green jelly (gelatina) soda drink

2. A flying schoolbag that you can control by remote control (telecomando)

3. An alarm clock (telecomando) that switches off when you shout at it

4. A television computer

5. A digital watch with a built in mobile phone and mini computer…

6. A new digital homework personal organizer

7. A new high speed flying carpet

The marketing mix

The 4Ps and the marketing mix

The 4Ps are the ideas to consider when marketing a product. They form the basis of the marketing mix. Getting this mix right is critical in order to successfully market a product. The 4Ps are:

Product
Price
Promotion
Place

If market research is carried out effectively, a company can plan a promotion for the right product, at the right price, and to get it to their chosen market, in the right place.

Now look at the 4Ps in more detail.

Product

A product can be either a good or a service that is sold either to a commercial customer or an end consumer. A customer buys a product, and a consumer uses it. Sometimes these are one and the same, as an industrial firm can also be a customer and a consumer. For example, British Airways might buy aeroplanes from British Aerospace, so it is a customer. It won't sell on the planes to another buyer, as BA needs the planes to provide its service, so it is also a consumer. Sometimes a wide product range covers both (Mercedes produce lorries for haulage companies, and cars for domestic use).

More commonly, there will be a number of sellers forming a chain of distribution. For example, a gold mine may sell gold to a jewellery manufacturer, who in turn will sell on rings to wholesalers and retailers, before we get to buy them in the high street. Each is a customer, but only the final user is the end consumer. A marketing manager will identify who his/her target market is, what they want, and sell it to them at each stage in the chain.

Price

No matter how good the product is, it is unlikely to succeed unless the price is right. This does not just mean being cheaper than competitors. Most people associate a higher price with quality, so you would expect to pay more for a Rolls Royce than for a Lada. On the other hand, is one cola worth more than another, and if so, how much?

As a rule, a producer of luxury or medical products will use skim pricing or premium pricing initially, in order to maximize its profits. This is useful, as it helps them to recover expensive research and development costs quickly.

For fast moving consumable goods (fmcg's) like colas, penetration pricing is usually used. The firm will want a large share of the market, so will settle for a small profit on each item. In the long term, they hope that the turnover, and therefore their profits, will be high.

The simplest method of all is cost plus pricing, where a firm adds a profit mark-up to the unit cost.

Promotion

The main aims of promotion are to persuade, inform and make people more aware of a brand, as well as improving sales figures. Advertising is the most widely used form of promotion, and can be through the media of TV, radio, journals, cinema or outdoors (billboards, posters). The specific sections of society (market segments) being targeted will affect the types of media chosen, as will the cost. If you were a toy manufacturer, you might want an advertising spot during children's TV. If you ran a local restaurant, you might choose a local paper or radio.

A small or local business would not usually advertise on TV, because it is very expensive. Sales promotion is designed to encourage new and repeat sales. Loyalty cards, free gifts, competitions and voucher schemes are the most popular.

Companies use sponsorship and public relations to improve their image, notably through financing sports, the arts and public information services.

Place

Distribution channels are the key to this area. A firm has to find the most cost-effective way to get the product to the consumer. Direct marketing through catalogues, via a TV shopping channel and through the Internet have become popular, because the consumer can shop from home.

For the firm, they can cut out the middleman in the process, and can therefore make more profit. Going through wholesalers and high-street retailers, however, is the most popular form of distribution, as that is still where most people shop.

The most important thing about marketing is to identify what the consumers' needs are, and then try to meet them. This is called consumer-orientation. To find out what these needs are, a firm's marketing department or a specialist research organisation carry out extensive market research.

The marketing process

A firm will gather information about the marketplace (eg whether house prices are rising or falling), and then research consumers' needs. From this, it will identify who its market is, and then put together a marketing plan based on the findings. The marketing mix will be central to this, and finding the right balance in each of the 4Ps is very important. The firm can then review and adapt their plan when they need to. You should remember the following points:

Although marketing is consumer-orientated, the main aim is still to be profitable.
A good marketing manager will try to differentiate their product (ie make their product stand out against similar competitive brands).
Whatever pricing decision is made, the most important factor is to break even.
Making it as easy as possible for the customer to buy the product will help sales to increase.

Question

Kendal Footwear is a small manufacturing company situated near the Lake District in Cumbria. They are launching a new, good quality walking boot to add to their product range. As their marketing manager, what two promotional activities might you use? Explain your reasons.

Answer 1

Teresa wrote: I would advertise in the local newspaper, and on the radio. It would be cheap, and most of the consumers would be local. I would also use sales promotion.

Examiner's note

Teresa has the right idea, but the question asks for two examples, and requires two reasons. She has given two examples but only given one set of reasons and this will lose her marks. She also needs to give far more explanation, eg why she would use a sales promotion.

Exam questions are usually based on case studies. The examiner will want to see that you understand the principles of marketing, and can apply them to a real-life situation.

Answer 2

Gary wrote: I would advertise in the local newspaper, as it is cheaper than other forms of advertising, and most of the market would live locally. I would also use a discount voucher scheme as sales promotion to increase the sales of our boot and other products.

Examiner's note

Gary has answered the question quite well, and given good reasons. He would get a much better grade, however, if he gave more detail, and used business terms (see Gillian's answer).

Exam questions are usually based on case studies. The examiner will want to see that you understand the principles of marketing, and can apply them to a real-life situation.

Answer 3

Gillian wrote: I would advertise in the local newspaper, as it is cheaper than other forms of advertising, and would reach my intended target market, most of which would probably be local. I would also use a discount voucher scheme as a form of sales promotion. It would give a 10% discount to our customers on any future purchases of our products. This should lead to increased sales of the rest of our product range, as well as making our boot more attractive to consumers in terms of value for money.

Examiner's note

Gillian's answer would probably get an A grade. She has answered the question thoroughly, given good detailed explanations, and shown that she can use business terms, like target market, product range and value for money.

Exam questions are usually based on case studies. The examiner will want to see that you understand the principles of marketing, and can apply them to a real-life situation.

carry out / Eseguire, attuare / effectively / Efficacemente
product range / Gamma di prodotti / haulage company / Società di trasporti
target market / Mercato obiettivo / skim pricing / Prezzi scrematura.
prezzi elevati per attribuire al prodotto un particolare valore in termini di immagine, qualità, prestigio; successivamente il prezzo diminuirà rivolgendo il prodotto ad altri segmenti di mercato
penetration pricing / fissazione di prezzo di penetrazione.
prezzi bassi per acquisire quote di mercato, soprattutto in fase di lancio
sponsorship / sponsorizzazione.
Il sovvenzionamento, a scopo pubblicitario, di un evento sportivo, artistico, sociale, ecc. da parte di un'impresa. Il fatto che l'evento sia trasmesso in televisione e che sia riferito dai giornali fa sì che il nome o il prodotto dell'impresa sia portato all'attenzione di vari milioni di persone.
Mark-up / aumento; rialzo. / Middleman / Intermediario
billboard / Cartellone pubblicitario / High-street / strada commerciale
destinata a negozi al dettaglio e altri esercizi commerciali.
voucher scheme / Buoni di acquisto