CHAPTER 7PRODUCT PRESENTATION

INTELLECTUAL PROPERTY (IP) Trademark Copyright Patents and Designs

BENEFITS OF BRANDING Why buyers purchase well known brands ‐ Why sellers develop well known brands ‐

BRANDING DECISIONS AND ISSUES Selecting a Brand-named Brand Licensing Co branding (brand partnership) ‐ Brand Extension Multi branding ‐

TYPES OF BRANDS (BATTLE OF THE BRANDS) Manufacturer brands. Store Brands ‐ Generics and Off Brands ‐

PACKAGING Protection Function Promotional Function Differentiation Function Value added Convenience ‐

INCREASING IMPORTANCE OF BRANDING AND PACKAGING

When goods are produced and services provided, businesses need to make decisions regarding the branding, packaging and labelling of these products. These elements help to differentiate the products from the competition, add value to the products, facilitate the consumer decision process, and assist in shopping tasks.

01. INTELLECTUAL PROPERTY (IP)

It includes inventions, processes, brand-named, logos, designs, artistic and literary creations. Intellectual property can be protected as trademarks, copyrights, patents and designs, and trade secrets.

TrademarkA registered trademark ®is a trademark that has been registered under the Trade Marks Act 1995, giving the owner exclusive use of it indefinitely. A trademark can be a brand-named, symbol, slogan, shape, number, letter, and logo. Trademarks exist because businesses want to protect their own

identity or goodwill that they have created — and stop competitors pretending to be them (passing‐off).

Loss of trademark. A trademark can be de registered if it is found that the product is often referred to by its brand-named‐ and therefore, fails to be a distinguishing mark. The trademark then becomes generic, just another word.If everyone continue to refer to a personal water craft (PWC) as a jetski, then the court may de‐register the trademark. Yes, Jetski® is a registered trademark owned by Kawasaki. This will not happen today because Kawasaki will make sure that the term “jetski” is always acknowledged and expressed as a trademark — Jetski®. It’s too late for cellophane, kerosene, elevator, aspirin, corn flakes, fiberglass, trampoline and yo yo. All these had been registered trademarks once. The original‐ owners would have lost both the patent and trademark to the public domain.

CopyrightA copyright© protects intellectual and artistic work from unauthorized copy. The owner is usually given proprietary (ownership) rights for 50 years after the year of first publication. Original works of art, literature, music, films, broadcasts, and computer programs can be copyrighted.

Patents and DesignsA patent is a right granted for an original invention. Once registered, the patent can last up to a maximum of 20 years. A registered design protects the visual appearance of the manufactured product. Once expired, the registered invention, technology or design becomes public‐domain, available to anyone and everyone – for free.Sometimes a trade secret offers longer or indefinite protection. The world’s most famous and still best kept trade secrets are Coke’s secret formula and KFC’s 11 herbs & spices recipe. If Coke’s formula had been patented instead, it wouldn’t have remained a secret.

02. BENEFITS OF BRANDING

A brand is a name (the Adidas name) or a symbol (three stripes logo) that identifies a seller's product‐ and differentiates it from competitors' products. Brands must be developed and managed properly over time, in the same way as products.

Why buyers purchase well‐known brandsA product that is branded for the sake of branding is merely using the brand as an identifier. But a well known brand is more than that. It’s an indicator of quality, a symbol: it has meaning and a strong‐ association. It can also represent pride of ownership.

Indicator of quality. The brand’s reputation is one of the main indicators of product quality especially when the product’s attributes are difficult to evaluate prior to purchase or use — such as durability or reliability. Brands are even more important for services because of the service’s intangibility.

Consistent quality. A buyer can be assured of the consistent quality of reputable brands because of the seller's strict quality control. We expect branded products to be of the same quality each and every time. Some brands are subject to 100% quality control, i.e., every single

product is quality checked before it leaves the factory. Defective goods are sold separately with their labels removed.

Symbolism & self‐promotion. Brands are often visible on the goods and even services. Such visibility allows the consumer to make social “statements” that accompany certain brands. Brands can symbolize status (prestige brands like Rolex, BMW, and Cartier) or lifestyle.

Why sellers develop well‐known brands

Increased sales. All things being equal, a well known brand enjoys higher sales and loyalty for‐ the reasons mentioned above.

Differentiation. For many commodity products (such as bottled water, fresh milk, credit cards, mortgages, white bread or basic t shirts, etc.), the brand (or packaging) may be the ‐ only differentiating factor that sets it apart from the rest.

Brand extension. A strong brand offers the seller the opportunity to market different products under the same brand-named. Such brand extension takes advantage of the brand's reputation or association.

03. BRANDING DECISIONS AND ISSUES

Selecting a Brand-namedConsidering the importance of branding, a business must adequately research and test possible options prior to the chosen brand’s full development. Moreover, pioneers have the added advantage of having the first choice of the “best” names in the product category — Sony Walkman, Post it Notes, etc.‐ — making it difficult for later competitors to choose a similar name. Ideally, a brand-named should meet the following criteria:

Registerable. Register the trademark (®) so that the Trade Marks Office has to do a thorough check to ensure that the name has not infringed on any existing trademark. A claimed trademark (™) is okay but runs the risk of another business having a prior claim to that trademark.

Suggestive of the product or its benefits. Considering todays over communicated society, it is advisable to choose a brand-named that instantly communicates the product or its benefits. IBM may be a well known brand-named (only because of its long history) but it doesn’t say‐ much about its computers or their benefits.

Distinctive (even quaint). Avoid popular names like Aussie, Aus, Australian, Koala, Swan, and WA— just too common. Consider some quaint or nondescript names like, Yahoo!/Google (search engines), Hotmail (email provider), Apple (computers),

Easy to recall and pronounce. Generally, keep brand-named short and easy to remember. Also, avoid foreign words that are difficult, embarrassing to pronounce.

Brand LicensingBrand licensing is similar, but this time the licensee gets the right to use the owner’s brand on

its products. Manchester United branded merchandise is produced and marketed under license all‐ over the world making this soccer club one of the richest.Through a licensing agreement, the owner of a brand (the licensor) permits another company (the licensee) to use the brand on its products for a one off fee or regular “commission” (royalties). ‐

Advantages. Allows the owner to expand the brand’s market on a global scale without having to invest in

production or marketing. Even product designs may not need to be provided. Through licensing, the brand can also be extended to other types of products. The Cadbury

Company does not manufacture ice cream nor can it distribute the product (no refrigerated‐ trucks). Yet, it was able to get into the ice cream and milk “business” by licensing the‐ Cadbury® brand to Peters & Brownes for the production and marketing of Cadbury® ice‐cream and flavoured milk.

Disadvantages. The main disadvantage for the licensor is the problem with quality control or assurance. An

Australian brand may be licensed to a Japanese company which has the products made under contract in Taiwan and then sold in Thailand. It would be difficult for the licensor to track and maintain quality. A poor quality product can damage the value of the brand.

Sometimes a licensed brand could end up on very different products, confusing the consumers.

It’s important not to confuse between licensing and contract manufacturing. Contract manufacturing is an arrangement to manufacture only. The marketing of the product is done by the brand owner.

Co‐branding (brand partnership)Sometimes there can be mutual benefits in having two (sometimes more) brands on a single product. For years, PC makers have co branded with Intel’s “Intel Inside” Pentium brand. Co branders must‐ ‐ ensure that their brands are compatible when used on the product.

In some cases, co branding allows both companies to access each other’s customers, thereby‐ increasing the combined customer base. In the example of the Qantas/American Express® charge card, American Express can have access to Qantas customers, and Qantas can build its loyalty program by using the card as a draw card. Co branding should not be confused with co advertising. Co advertising is merely two or more‐ ‐ ‐ companies jointly advertising their products or brands in the same advertisement.

Brand ExtensionBrand extension or family branding involves using the same brand-named for other (usually related) products. The aim is to capitalize on the reputation or association of the brand — reducing the marketing cost and risk of introducing these new products. Bic (ball point pens) successfully extended‐ its brand-named to disposable lighters and disposable razors.

The general rule is that brand extension is ideal in situations where the new products are related to the same customers. Rules are broken in the case of Yamaha. The well respected name adorns‐ motorcycles, musical instruments, home audio visual systems, outboard motors and computer‐ peripherals.

Multi‐brandingMulti branding is the use of separate brand-named for different products usually aimed at different‐ target markets. The idea is to preserve the reputation of the original brand — without having it linked to products of different qualities or price points. ‐

Flagship or premium brands. Lexus is Toyota’s prestige marque. Luxury and performance Hondas are known as Acuras in the US. Also, in the US, luxury Nissans are badged as Infinitis. This strategy makes sense because mainstream brands can’t just go upmarket and start charging high prices.

Fighting brands. Mainstream brands often have to fend off cheap copycat brands by reducing the price to meet competition. This may not be too healthy because of low profitability. Some companies just launch their own “cheap” brands to fight off competitors — thereby protecting the mainstream brand.

04. TYPES OF BRANDS (BATTLE OF THE BRANDS)

Manufacturer brands.Also known as national brands, these brands are created and owned by manufacturers and sold nationally or extensively though many retailers. An overwhelming majority of the brands that we buy are manufacturer brands with some product category exceptions like groceries where store brands‐ and generics are making some inroads.

Advantages. They can offer their shoppers a huge variety of brands. Selling these often famous and reputable brands can add prestige to any retail outlet.

These brands are promoted by the manufacturers who are mainly responsible for the overall consumer demand for their branded goods.

So, brand awareness and interest is high There is less selling effort for the retailers if the right brands are chosen

Disadvantages. Most manufacturer brands are sold just about everywhere. This invariably leads to price competition among these retailers, which will affect the

product’s margin (profits).

Store‐BrandsReputable retailers can create their own store brands and have them sold next to manufacturer‐ brands. These store brands are made under contract by manufacturers everywhere — to ‐ any given quality or specification. The identity of the manufacturer is never disclosed. Many brand name‐ manufacturers are willing to produce store brands (the competition!) because they know that if they‐ don’t, others will.

Advantages. Store brands “fit” well between the expensive manufacturer brands and the much‐

cheaper generics/off brands. A store brand is ‐ ‐ exclusive to the retail store. If a buyer is happy with a Target brand sunscreen, she can only buy it from a Target store.‐

Store brands tend to be more ‐ profitable because the products can be manufactured overseas cheaply or by a local factory using its excess capacity. There are usually low or even no promotional expenses.

The store brand just sits on the shelf next to the more expensive famous brands. Store‐ ‐brands are less successful if there is a marked difference in the perceived quality between brands, especially with high tech products. ‐

Generics and Off‐BrandsGeneric products (brandless) and off brands are increasing in popularity in some product categories,‐ and are often sold by “super discount” stores like Red Dot, Gone Bazaar and Crazy Clark’s. Technically, generic products are brandless, but some supermarkets do “brand” them — more for identification purposes than for promotion.

05. PACKAGING

Cconsider the role of packaging for perfume and chocolates, and we would appreciate the other functions of packaging too, i.e., promotion, differentiation and value‐adding. Obviously, packaging is important only for packaged goods and in this category, Packaging is often regarded as the 5th P. However, we have included it as part of the Product — for convenience.

Protection FunctionImproved packaging can increase the product’s shelf life, keep perishables fresher, and protect the product from tampering. Foods are kept longer through improved packaging like vacuum packaging Single case of harm arising from defective packaging is enough to do damage to its reputation Promotional Function

Packaging is an indicator of perceived quality — actual quality comes from the eating or wearing!

We shop more efficiently if we recognize the packaging. Well-designed packaging can even appeal to our emotions — to stimulate impulse purchase.

For example, children’s packaged foods, toys and perfume.

Labelling refers to the information that appears on the packaging itself. Such product information can encourage self‐service.

Differentiation FunctionAllow the product to be identified and therefore, visibly differentiated. However, form differentiation (as opposed to visible differentiation) concerns repackaging of the product into different forms like single serve sizes, non metal “cans” for microwave reheating or oil in easy pour containers for table‐ ‐ use.

Value‐added ConvenienceConvenience is a value added product feature that some consumers are prepared to pay more for.‐ Consumer will seek improved or innovative packaging that is “user friendly”, refillable or reusable.‐There is spray on cooking oil for use with non stick cookware.‐ ‐

INCREASING IMPORTANCE OF BRANDING AND PACKAGINGSmall specialty stores are known for offering shoppers a more personalized service and giving them expert advice, and so on. The merchandise is usually more upmarket and exclusive. The question is — do consumers desire personalized service or expert advice each and every time they shop?

Today is the age of self‐service. Customers buy mostly from discount stores, supermarkets, superstores (Ikea, Bunnings, Toys R Us and Officeworks) and department stores. These “‐ ‐ mass merchandisers” expect customers to make purchases largely on their own — without the assistance of sales staff. Why is a shopper in K Mart able to choose a basic TV set on his own without a single question asked and “wheel” it out to the cash register to pay? That’s because the brand is known, the country of origin is stated, a warranty is given, a list of features is printed on the box and the price is known. Also, a sample TV set is on display and he is familiar with the product from past experience. Customers rarely need to ask the sales staff whether Hewlett Packard, Toshiba, Sony and Apple are‐ quality brands of computers. In addition, the brand-named, packaging and labelling of the product give buyers enough confidence to choose on their own. Therefore, branding packaging labelling acts as a “‐ silent salespersons