Branding and Packaging for the Globalized Market
Fun fact: The word ‘brand’ owes its origin to the Norwegian word ‘brandr’ which means to burn.
PRODUCT BRANDING and packaging decisions are very important decisions as in the present age of globalization, a large number of brands of various products are available to the consumer to choose and select from. As all brands are not equally liked by a consumer and he selects his brand after a careful analysis of a number of factors associated not only with the product but also the manufacturer, the brand name, the packaging, the price, the contents and also the various other factors.
The marketers of all the competitive brands of a product try to reach to the consumers by the means of marketing communications and appeal them to buy their brand. For making the consumers to take favorable decisions for their products, the marketers need to build strong brands and nourish them overtime so that its market strength is not deteriorated on account of introduction of equally competitive brands by their existing competitors or by the entry of an altogether a new brand with attractive product features including appealing packaging.
The marketers therefore need to continuously undertake research and developmental activities to keep intact the brand image. In order to ensure that the other brands of washing power do not erode the market share of their brand ‘surf’, Hindustan Lever Limited has been taking very cautious measures from time to time about this brand and its packaging.
Branding is personalizing the product by giving it a name. Just as all of us have been given names to have our unique identity in the society, similarity the companies give unique brand names for their products to facilitate their distinction from the competitor’s brands.
The word ‘brand’ owes its origin to the Norwegian word ‘brandr’ which means to burn. The farmers, there, used to put some identification marks on the body of their livestock to distinguish their possession. Therefore, the marketers taking clues from it, resorted to branding, in order to distinguish their offerings from the similar products and services provided by their competitors.
Branding with benefits accruing to the consumer is particularly effective as such a brand name would make a product appear as if it had some added value. When placed alongside a competitor offering an identical product, a benefit-based name positions itself above the competition in the consumer’s mind. As a result, the name will register quickly when people make their buying decisions. However there is no one magic formula that can be applied to quickly and efficiently generate a brand name.Advertisement
The right name has to be the product of a carefully prepared strategic brief, showing creativity, selected with a lot of linguistic and cultural research. A good name is an incredibly valuable asset. Naming, in today’s global market, has evolved into a complex creative process and is also subjected to stringent legal checks.
For launching new brands and for repositioning existing ones in the contemporary competition driven market demand, an abundance of customer loyalty is required to optimize marketing expenditure.
For new brands, the task of designing the brand experience requires creativity to differentiate the brand is unusual ways in the market place. For existing brands, the task includes decision making about which features, look and feel, and messages should be kept, which should be dropped and which should be changed. All this is required to be done before the brand re-launching is to be undertaken. This is also sometimes called brand dressing.
Overall it can be summed that for making a stable position in the mindset of the consumers and hence the market, a new brand requires creativity to differentiate while an existing brand relies on innovations undertaken to enhance the brand’s market image.
Important Considerations for Branding
The following considerations should be made before making a final choice of brand name in order to make it more effective.
- It should be catchy and easy to recall.
- It should be easy to pronounce.
- It should have a distinctive appeal.
- It should suggest product benefit.
- It should not infringe on existing registered brand names.
- It should be such that it can be registered as a trade mark*.
(* A trade mark is a brand registered under the law).Advertisement
A brand can be any of the following:
a) Company’s name (e.g. Cadbury chocolates).
b) Product’s name (Nescafe)
c) Symbols (e.g. Symbol of Maharaja in case of Air India).
d) Letters generally standing for company’s name e.g. ICICI.
e) Names or figures unrelated to the product e.g. classic.
f) Manufacturer’s family name e.g. Godrej.
Through their meaning and sound, names project the personality of a product and should communicate to customers, the quality, integrity and strength of what they represent. As brand names are the first public act of interaction of a company with the potential customers, these can prove out to be assets of enormous value.
Kinds of Brands: The brands of the following kinds.
a) National Brands
b) Individual Brands
c) Blanket Brands
d) Multiple Brands
e) Private Brands
A national brand is a manufacturer’s brand. A successful national brand builds not only the image of the product, it builds also the image of the company. A successful national brand is a great help to a company in introducing new products in future. A disadvantage of the national brand is that if one product fails, it also badly affects the other products of the company. Besides this, creating a national brand is expensive.Advertisement
An individual brand means that each product of a company has an individual brand name. It has the advantage of highlighting the benefits of the individual product. It has the further advantage that if an individual brand flops, it does not hurt the other products. Individual brand is however an expensive proposition. Hindustan Lever, HMT etc., have been following this method of giving different names to each of their products.
A blanket brand is one brand which covers all the products of a company. It is usually the company’s or the manufacturer’s family name. This practice is also called family branding or umbrella branding. It has the same advantages as well as the disadvantages of a national brand.
A multiple brand gives different names to the same product having only minor differences. The idea is to appeal to different segments of the market and have a larger market share. But the customers often see it as a ‘trick’, not a fair play, and they lose faith in the company.
Sometimes, mainly for reasons of cost-saving, the manufacturer hands over the responsibility of branding to the distributor. A private brand is, in fact, the distributor’s brand. It can be highly successful. The manufacturer, however, cannot get all the benefits which accrue from it.
Popular brands are many times imitated. A trademark is a legal right of a firm to protect a brand name or brand mark by getting their brands registered at the patent office. It confers the proprietor a statutory right to exclusive use of that mark or name. It is meant to safeguard against ditto imitation.
Benefits of Branding
Establishing a brand involves a good deal of expenses on advertising and promotion. But once established, a brand has several advantages to offer. If a brand is properly nourished, it grows and has a long shelf life.
a) A brand serves as a guarantee for quality and creates confidence among the consumers.
b) A branded product acquires a special identity and appeal. The customer finds easy to select and buy.
c) The greatest advantage, however, comes from the product differentiation it creates. Once that is done, the product can compete on a non-price basis.
Testing Brand Names
There is no fool proof method for testing brand names but the following are some important considerations which may prove useful in building a successful brand name.
The selected brand name should be:
(i) Emotional; (ii) Stick to the brain; (iii) Have personality; (iv) Have depth
Overall, while the brand name is very important, a brand cannot survive on its name alone. The brand name and its execution are equally important for a successful and sustained brand life. Further, also it is not enough to have a winner brand, in order to stay ahead, the brand must also live up to its promise better than anyone else.
Brand loyalty is the measurement of the attitude or the behavior of the consumer for a particular brand. In other words, it is the intentions of the buyers to make a repeated purchase of a product on account of the previous experiences from the consumption of that brand. Higher loyalty to a brand is an important asset. It can be utilized to persuade customers for more purchase or for spreading word of mouth. Loyalty provides fewer reasons for consumers to engage in extended information search among alternatives. Purchase decisions based on loyalty may become simplified and even habitual in nature which may be out of the satisfaction with the brands being used presently. A base of loyal customers will be advantageous for an organization as it reduces the marketing cost of doing business.Advertisement
Interest in loyalty in the field of marketing dates back to 1923. Since then the concept of loyalty has been subjected to intense discussion in marketing literature and numerous empirical studies have been conducted with a view to explain this concept.
A large number of loyal customers are an asset for any brand and this phenomenon has been identified as major determinant of brand equity.
Loyalty provides fewer reasons for consumers to engage in extended information search among alternatives as purchase decisions based on loyalty may become simplified and even habitual in nature and this may be a result of satisfaction with the current brands. A base of loyal customers will also be advantageous for an organization as it reduces the marketing cost of doing business. The brand loyal customers repeatedly buy the same brand until they are compelled by the strong market forces by offering them a certainly better product which they perceive to be worthy enough to buy shifting from the loyal brand.
The marketers which have a strong base of loyal customers need to take extra care of such loyal customers by nourishing and serving them in such a way that they keep intact their loyalty.
Brand equity is the perceived value of the brand in the corporate world. Companies build brands and nourish them overtime to make them stronger and widely acceptable by the consumers. For building and nourishing brands the companies have to spend a lot of money and by doing so they develop their brand’s equity. Thus the value of a brand’s overall strengths in the market is called brand equity.
Brand equity is the sum total of all the different values people attach to the brand. It may also be termed as the additional income expected from a branded product over an unbranded one.
As it is costly to build brand recognition, some firms prefer to acquire established brands rather than try to build their own. They pay money to take over these brands. This amount varies with the perceived worth of the brand and is termed as brand equity. A brand is nearly worthless unless it enjoys some equity in the market place.
Brand equity refers to a set of assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm and or to that firm’s competitors.
Brand equity is a measure of brand’s worth. Strong brands have higher brand equity because they are perceived favorable over the others by the buyers. For evaluating brand equity, the brand’s market share, its profitability and future potential are the crucial considerations.
A brand’s equity is a sum total of the perceived values of the brand’s:
- Customer loyalty
- Perceived quality
- Brand association
- Proprietary assets
A strong brand equity also pushes the market share prices of its parent firms which is the main consideration while selling and buying of firms i.e. acquisition / take over decisions are made. Coca Cola paid Rs. 40 crores (around $7.3 million USD) for buying out Barle’s brands – Thums Up, Limca, Gold Spot and Citra and Heinz paid Rs. 110 crores (around $21.3 million USD) for taking over Glaxo’s food brands.
Thus it can be concluded that strong brands have their equity too and the value of which depends upon their market hare, their level of customer loyalty, its profitability, future potential and also the several other considerations.
Overall it may be said that a brand represents all the tangible and intangible qualities and aspects of a product or service. A brand choice represents a collection of the buyer’s feeling and perceptions about quality, income, life-style and status. A brand promises to deliver value upon which customers and prospective purchasers can rely to be consistent over a long period of time.
Packaging is an integral component of a product and it plays an important role in its salability. Packaging is no longer a mere outer covering of a product for its protection; it is very much a contributing factor for its increasing marketability. A vividly beautiful packaging of a product, to some extent, develops a positive image about it in the minds of the consumers. Thus packaging is not merely used as a means of product’s protection during transportation and storage but it is also used as a marketing and promotional tool.
Earlier the role of packaging was merely to protect the product from sun and dust and also from damage during handling. With advancement of the nations, new legislation has been incorporated for the merchandising of the goods. This has resulted into the importance as well as the necessity for an appropriate quality and type of packaging.
Today marketing is a game of names of brands who sell the most in the market place. Lee Cooper, Coca-Cola, Pepsi and Reebock are the status icons for young and old alike. These brands speak for the prestigious and social stature of any persons.
The present era of cut throat competition has enabled the consumer to select the brand of product to be consumed from amongst a vast number of competing brands. This availability of brand choice has resulted into a fast eroding of the consumer’s loyalty for a particular brand. Consumers are not resorting to more of impulse buying and are eager to try new brands. Hence the companies today not just take research and development activities for improving the product quality but also try to add value to their products means of via innovative packaging.
These days packaging is designed to take care of the convenience for its use and also to differentiate a brand from the others. In case of many products reusable packaging is also used to attract consumers for its purchase.
Packaging is a function of both physical distribution as well as advertising. It is essential that latest techniques and materials of packaging be used. Many institutes, including the Indian Institute of Packaging render useful advice to the marketers on the nature of packaging designs and the materials to be used which would be suitable for a particular product.
Importance of Packaging
Depending on the products and the industry, the packaging can have different levels of importance. Sometimes packaging becomes the most important way of delivering the good, and its cost represents the largest part of the total cost of the product.
Packaging becomes the most important way of delivering the goods, and its cost represents the largest part of the total cost of the product”.Packaging serves a number of utilities which the marketer’s want to communicate to the consumer to attract him to purchase his brand. Through packaging the important information about the product, price, manufacturer and the consumption precautions etc. can be conveyed to the buyer.
Product packaging decisions are very important and the marketers need to be very careful about it, as packaging is sometimes the key factor of success or failure of a new launch.
Packaging, as a function, has two separate dimensions – the science and technology and the behavioural aspect related to the art of product design which enhances the value of the contents and passes on the impression to the consumer directly or subtly.
Overall it can be concluded that packaging is an integral and an important component of the product. It not only helps in protecting the product from being damaged during its handling but also protects it as an attractive packaging works as a silent salesman.
Packaging decisions are very important for the marketing because now-a- days the consumers pay a lot of attention and care for selecting a product. They usually prefer a product which is adequately packaged; the outer cover contains all the necessary information about the product and the manufacturer and also the method of using, consuming or operating the product. More so, packaging carries some aesthetic value also. So, in the modern days, the marketing managers pay a lot of care for making the packaging decisions of the products being marketed by them.
The marketers, in the present era of cut throat competition, are also turning to innovative packaging in order to establish a distinctive edge over the competitor’s brands. This is especially true in the case of marketing of consumer products, cosmetics, perfumes, toiletries and other personal care products. Marketers try to add value to their brands by way to packaging as a tool. Thus they want to pass on greater benefits to the customers and attempt to increase their brand’s value.
The marketers have to take the packaging decisions which should meet the twin tasks of keeping the packaging cost low and yet carry it safely enough up to the customer without any damage. It might not always be possible to merely reduce the cost of packaging without affecting the various components of the marketing mix because the packaging decisions affect all the four components of the marketing mix. Good and attractive packaging adds to product attraction but not without adding to its cost. It may also add to the convenience of handling and act as a tool of promotion. So, the marketing firms have to take such decisions which will be beneficial for all and the overall equation of cost benefit analysis is favorable for each.
Packaging designs are also of vital importance as they often help the consumer to recognize the product and literally sell it off the shelf, especially at the point of sale. The labeling used on the packaging also serves as a means of communication about the product contents, quality, quantity etc. e.g. eco-labeling on the packaging of a product is a proof that the product is environmentally friendly.
Since the last few years, the packaging material has become more and more an object of creativity of the marketing people rather than the domain of the production and technical engineers. From being functional initially and addressing the need for protection during the time in-between production and consumption of the products, packaging is becoming vehicle for communication, used to effectively influence the end consumer.
These days when we talk about innovation, we not only refer to product quality but include its packaging also. These days the consumer readily pays the price of the packaging if it helps in adding to its quality and hygiene, so therefore, the marketers should take decisions in favor of improving the acceptance level of their brand by adopting appropriate packaging designs made with appropriate materials.
Useful Features of Packaging
Packaging deals with the nature of the container/wrapper, its size, shape, color and the message printed on it. It represents the talents of the various specialists viz. researcher, designer, engineer, marketer and others.
The packaging of a product may also attract the attention of the consumers at the very first sight if its features appear to be attractive. The marketers need to take care of these marketing aspects also.
The usual features of packaging are the following:
a) The container should be strong so that it can stand the strain of transportation and handling. It should be strong also to ensure a long shelf-life.
b) While being strong, it should avoid being too heavy so that it remains easy to handle and inexpensive on freight.
Over and above the usual features, the packaging should also have certain features from the marketing angle, as a well-designed packaging is often described as the silent sales representative. These marketing features of packaging are as follows:
a) It must advertise the brand and the manufacturer.
b) It must be distinctive and capable of ‘differentiating’ the product.
c) It must be suitable for display.
d) It must be helpful in identifying the product.
e) It must carry the brand name, brand / trade mark and all the other required information.
f) It must be attractive.
g) It must be so designed as to add convenience for carrying and handling the product.
h) It should require the minimum shelf space.
i) The colors and the material used for outer packaging must not create any socially or psychologically bad image about the product.
j) Packaging must be capable of keeping intact the hygiene of the product for its shelf life.
However, due care must be taken as an overenthusiastic approach may lead to cost over-runs as packaging has a direct bearing on the product cost. Therefore, the cost aspect of packaging should be strictly controlled so that the product may not be overpriced.
Brand positioning is the conscious promotional efforts which the marketers undertake to develop an image, in the mindset of their target consumers, about the benefits and quality stands of the promoted brand. In positioning, the marketer decides how and around what parameters, the product offer has to be placed before the target consumers.
The consumers vary on the benefits which they seek to draw from a product and no single brand of a product category can incorporate all the features which can satisfy these needs of all the types of the consumers. Hence, the marketers need to first incorporate such features in their brands which would be able to meet the desired benefits of one or more segments of the consumer and then promote their brands by highlighting these product features so as to target their brands on these segments of consumers. Thus brand positioning is the process of developing a positive association between the target segments of the consumers and the promoted brands.
Brand positioning decisions are consciously taken because if the promoted brand fails to deliver consumers the benefits claimed by it, the consumers will rather develop a negative image about the product. Thus for product positioning to succeed, it must be based on an identifiable, meaningful and compelling value proposition. The brand should match the value gained by the consumers (after its consumption) to the value promised by it.
A value proposition is the assertion/statement of the benefits and satisfaction that the marketers claim in the brand.
According to Kotler and Keller, “Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. The goal is to locate the brand in the minds of the consumers to maximize the potential benefit to the firm. A good brand positioning helps guide marketing strategy by clarifying the brand’s essence, what goals it helps the consumer achieve and how it does in a unique way. The result of positioning is the successful creation of a customer focused value proposition a cogent reason why the target market should buy the product.
Thus, the overall conclusion from the concept of brand positioning, can be drawn that it is the act of building an image for perception about a brand’s ability or capability to provide the perceived satisfaction/ benefits to the consumers.
Packaging Scene in India
The Indian market has been rapidly changing during the last ten years or so due to the entry of some worldwide players who have upgraded the market standards.
There is emerging a strong change in the packaging scene in India and rather there is a packaging revolution. The total packaging volumes for consumer packaging in India reached a total of 39,906 million units by 2002. The packaging industry in India in growing and the market is dominated by flexible packaging formats. There is a great level of change in the product packaging particularly in the material used for it.
More and more Indians are now becoming health conscious and a majority of the products here are now available in hygiene packaging. Even the common man is now becoming conscious about the quality of water, the standard of cooking oil and calorie intake etc. This has resulted in a significant shift away from loose unbranded low quality cooking oil to the branded oil packaged in PET and HDPE bottles. Further healthier living has also resulted in a growing demand for PET bottles in the potable water sector.
More and more consumers in India now are also realizing the need for nutritive drinks, thus showing a preference for juice drinks, 100% juices, milk drinks etc. which is further pushing up demand for liquid cartons.
Packaging revolution in India has resulted in the supply and hence the consumption of a wide variety of consumer products. Marketers have introduced various packaged sizes of their products suitable to different pockets and needs besides tetra pack packaging for food products etc. have helped in increasing their shelf life. The market size for various products has registered a significant growth rate just because of the this packaging revolution. The long run survival for many of the brands has been possible only due to their adapting to the new and innovative packaging materials for their products.
Overall it can be concluded that product packaging represents the talents of the various specialists’ viz. research, designer, engineer and others. Packaging deals with the nature of the container, its size, shape, color and the message printed on it. The packaging should be strong enough so that it can stand the strain of transportation and handling. It should also be adequate to ensure a long shelf-life. Besides these, the packaging should be so design so as to be capable of differentiating the product and it must be suitable for display. However the cost aspect of packaging must be strictly controlled otherwise it may lead to cost over-runs.
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