Product Characteristics and Classifications

 Product Characteristics and Classifications:- Many people think a product is a tangible

offering, but a product is anything that can be offered to a market to satisfy a Need or
Want, including physical goods, services, experiences, events, persons, places, properties,
organizations, information and ideas.

 Product Levels: The Customer–Value Hierarchy:- In planning its market offering, the
marketer needs to address five product levels. Each level adds more customer value, and
the five constitute a Customer–Value Hierarchy.
• The fundamental level is the Core Benefit i.e. the Service or Benefit the customer is really
buying.
Ex:- A hotel guest is buying ‘Rest and Sleep’. The purchaser of a drill is buying ‘holes’.
Marketers must see themselves as benefit providers.
• At the second level, the marketer must turn the core benefit into a Basic Product. Thus, a
hotel room includes a bed, bathroom, towels, desk, dresser and closet.
• At the third level, the marketer prepares an Expected Product, a set of Attributes and
Conditions buyers normally expect when they purchase this product.
Ex:- Hotel guests expect a clean bed, fresh towels, working lamps, and a relative degree
of quietness and privacy.
• At the fourth level, the marketer prepares an Augmented Product that exceeds customer
expectations.
 In developed countries, brand positioning and competition take place at this level, whereas,
in developing and emerging markets such as India, competition takes place mostly at the
expected product level.
• At the fifth level stands the Potential Product, which encompasses all the possible
augmentations and transformations the product or offering might undergo in the
future.
 It is here, where companies search for new ways to satisfy customers and distinguish
their offering.
 Differentiation arises and competition increasingly occurs on the basis of product
augmentation, which also leads the marketer to look at the user’s total Consumption
System: the way the user performs the tasks of Getting and Using products and related
services.
 Each augmentation adds cost and augmented benefits soon become expected benefits
and necessary point of parity.
Ex:- Today’s hotel guests expect cable T.V. with a remote control and phone lines and
preferably a Wi-Fi internet access.
 This means competitors must search for still other Features and Benefits.
 Some companies raise the price of their augmented product, where as others offer a
‘Stripped–Down’ version at a much lower price.
Ex:- The ITC – Welcome group of hotels in India, has four sets of properties under four
different brands. The group’s Super–Deluxe hotels are organized under the brand ITC Hotels;
Five–Star hotels are under the brand Welcome Hotels; Budget hotels in smaller towns and
cities under the brand Fortune Hotels; and Palaces, Forts and Havelis under the brand
Welcome Heritage.
 Product Classifications:- Marketers have traditionally classified products on the basis of
Durability, Tangibility, and Use (Consumer or Industrial).
 Each product type has an appropriate marketing–mix strategy.
 Durability And Tangibility:- Marketers classify products into three groups according to
Durability and Tangibility:-

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• Nondurable Goods are tangible goods normally consumed in one or a few uses, such as
soft drinks and soap. These goods are purchased frequently, so the appropriate strategy is to
make them available in as many locations as possible, charge only a small markup and
advertise heavily to induce trial and build preference.
• Durable Goods are tangible goods that normally survive many uses like refrigerators,
automobiles, machine tools, clothing. Durable products normally require more personal
selling and service, command a higher margin and require more seller guarantees.
• Services are intangible, inseparable, variable and perishable products, and hence they
require more quality control, supplier credibility, and adaptability.
Ex:- Hair cuts, Legal Advice, Insurance Policies, Appliance Repairs. Etc.
• Consumer–Goods Classification:- The vast array of goods consumers buy are classified on
the basis of their shopping habits.
 They are distinguished among Convenience, Shopping, Specialty and Unsought goods.
• Convenience Goods are purchased frequently, immediately and with a minimum of
effort.
Ex:- Soft Drinks, Soaps, Newspapers.
 Convenience goods can be further divided in Staples, Impulse Goods & Emergency
Goods.
• Staples are those goods, which consumers purchase on a regular basis.
Ex:- Close up Toothpaste, Detol Hand wash, Britannia Marie biscuits. Etc.
• Impulse Goods are purchased without any planning or search effort.
Ex:- Chocolates, Candy Bars, Potato Chips. Etc.
• Emergency Goods are purchased when a need is urgent.
Ex:- Umbrellas and rain Coats with the advent of monsoons, pullover, sweaters and
shawls with the advent of winter.

 Manufacturers of Impulse and Emergency goods should place them in those outlets where
consumers are likely to experience an urge or compelling need to make a purchase.

• Shopping Goods are goods that the consumer characteristically compares on the basis
of Suitability, Quality, Price or Style.
Ex:- Furniture, Clothing, Used cars and All major appliances.
 Shopping goods are further divide into Homogeneous Shopping Goods and
Heterogeneous Shopping Goods.
• Homogeneous Shopping Goods are similar in quality but different enough in price to
justify shopping comparisons.
• Heterogeneous Shopping Goods differ in product features and services that may be
more important than price.
The seller of heterogeneous shopping goods carries a wide assortment to satisfy
individual tastes and must have well–trained salespeople to inform and advise customers.
• Specialty Goods have unique characteristics or brand identification for which a sufficient
number of buyers are willing to make a special purchasing effort.
Ex:- Cars, Stereo components, Photographic Equipments. Etc.
 Specialty goods don’t require comparisons. Buyers invest time to reach dealers carrying
these products. Dealers don’t need convenient locations, although they must let prospective
buyers know their location.
Ex:- A Mercedes is a specialty good because interested buyers will travel far to buy one.
• Unsought Goods are those the consumer doesn’t know about or does not normally
think of buying, such as smoke detectors.
The classic examples of unsought goods are Life Insurance, Encyclopedias, and
Reference Books. Unsought goods require advertising and personal–selling support.

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• Industrial–Goods Classification:- Industrial goods can be classified in terms of their
relative cost and how they enter the production process, i.e. Materials and Parts,
Capital Items, and Supplies & Business Services.

 Materials and Parts are goods that enter the manufacturer’s product completely.

 They fall into two classes:- Raw Materials, and Manufactured Materials & Parts.

 Raw Materials fall into two major groups: Farm Products (Wheat, Cotton, Livestock, Fruits
and vegetables) and Natural Products (Fish, Lumber, Crude Petroleum, Iron Ore etc.).
• Farm Products are supplied by many producers, who turn them over to marketing
intermediaries, who provide assembly, grading, storage, transportation and selling services.
• Farm Products are Perishable and Seasonal in nature and this gives rise to special
marketing practices, whereas their commodity character results in relatively little
advertising and promotional activity, with some exceptions.
• At times, commodity groups will launch campaigns to promote their product.
Ex:- National Egg Co-ordination Committee (NECC) regularly undertakes an intensive
promotion campaign.
• Natural Products are limited in supply. They usually have great bulk and low unit value
and must be moved from producer to user.
• Fewer and larger producers often market them directly to industrial users. As
manufacturers depend on these materials, long–term supply contracts are common.
• Price and delivery reliability are the major factors influencing the selection of suppliers.

 Manufactured Materials and Parts fall into two categories:- Component Materials
(iron, yarn, cement, wires, etc.) and Component Parts (small motors, tires, castings, etc.).
 Component materials are usually fabricated further.
Ex:- Pig iron is made into Steel, and Yarn is woven into Cloth.
• Price and Supplier reliability are key purchase factors.
 Component Parts enter the finished product with not further change in form.

• Most manufactured Materials and Parts are sold directly to industrial users.
• Price and Service are major marketing considerations, and branding & advertising
tend to be less important.
 Capital Items are long–lasting goods that facilitate developing or managing the
finished product. They include two groups:- Installations and Equipments.
• Installations consist of buildings (factories, offices) and have Equipments (generators, drill
presses, mainframe computers, elevators).
• Installations are major purchases. They are usually bought directly from the producer,
whose sales force includes technical personnel, and a long negotiation period precedes the
typical sale. Producers must be willing to design to specification and to supply post–
sale services.
Ex:- BHEL, L&T etc.
• Advertising is much less important than personal selling.
 Equipments include portable factory equipments and tools (hand tools, lift trucks) and
office equipments (personal computers, desks).
• These types of equipment don’t become part of a finished product.
• They have a shorter life than installations but a longer life than operating supplies.
• Although some equipment manufacturers sell direct, more often there are
intermediaries as the market is geographically dispersed, the buyers are numerous, and the
orders are small.
• Quality, features, price and service are major considerations.
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• The sales force tend to be more important than advertising, although advertising can be
used effectively.

 Supplies and Business Services are short–term goods and services that facilitate
developing or managing the finished product.

 Supplies are of two kinds:- Maintenance & Repair Items (paint, nails, brooms, etc.) and
Operating Supplies (lubricants, coal, writing paper, pencils, etc.).

• Together they go under the name of MRO goods.

• They are normally marketed through intermediaries because of their low unit value and
the great number and geographic dispersion of customers.
• Price and Service are important considerations, because suppliers are standardized
and brand preference is not high.

 Business Services include Maintenance and repair Services (maintenance of air

conditioners, repair of photocopying machines, etc.) and Business Advisory Services (legal,
management consulting, advertising, etc.).
• Maintenance and repair services are usually supplied under contract by small producers
or are available from the manufacturers of the original equipment.
• Business advisory services are usually purchased on the basis of the supplier’s reputation
& staff.

 Product And Brand relationships:- Each product can be related to other products to
ensure that a firm is offering and marketing the optimal set of products.

 The Product Hierarchy:- The product hierarchy stretches from basic needs to particular
items that satisfy those needs.
Six levels of the product hierarchy can be identified, using life insurance as an example:-

 Need Family:- The core need that underlies the existence of a product family.
Ex:- Security.
• Product Family:- All the product classes that can satisfy a core need with reasonable
effectiveness.
Ex:- Savings and Income.
• Product Class:- A group of products within the product family, recognized as having a
certain functional coherence. Also known as a product category.
Ex:- Financial Instruments.
• Product Line:- A group of products within a product class that are closely related
because they perform a similar function, are sold to the same customer groups, are
marketed through the same outlets or channels, or fall within given price ranges.

 A product line may consist of different brands, or a single family brand, or individual
brand as a line extention.
Ex:- Life Insurance.
• Product Type:- A group of items within a product line that share one of several
possible forms of the product.
Ex:- Term Life insurance.
• Item:- A distinct unit within a brand or product line distinguishable by size, price,
appearance or some other attribute.
Ex:- LIC’s renewable term life insurance.
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 Product Systems and Mixes:- A Product System is a group of diverse but related items
that function in a compatible manner.
Ex:- Samsung handheld and smartphone product lines come with attachable products
including headsets, cameras, MP4 players, and so on.
 A Product Mix (also called a Product Assortment) is the set of all products and items a
particular seller offers for sale.
 A product mix consists of various product lines.
Ex:- General Electric. (the G.E consumer appliance division has got product line
managers for refrigerators, stoves, washing machine, and so on).
The consumer product portfolio of Nirma Limited consists of fabric–care products,
personal–care products, food products, etc. In each of these categories, the company has
different brands and variants.
 A company’s product mix has a certain width, length, depth, and consistency.
 These concepts are in the table below for the consumer–product division of Hindustan
Unilever Limited (HUL).

 The Width of a product mix refers to how many different product lines the company
carries. The above table shows a product–mix width of twelve lines.
 The Length of a product mix refers to the total number of items on the mix. In the above
table it is 29. we can also talk about the average length of a line. This is obtained by dividing
the total length (here 29) by the number of lines (here 12), or an average product length of less
than 3 in the above case.
 The Depth of a product mix refers to how many variants are offered of each product in
the line. If Lux comes in four variants and in two sizes, then it has a depth of eight. The avg.
depth of any company’s product mix can be calculated by averaging the number of
variants within the brand groups.

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 The Consistency of the product mix refers to how closely related the various product
lines are in end use, production requirements, distribution channels, or some other
way.
 HUL’s product lines are consistent insofar as they are consumer goods that go through the
same distribution channels. The lines are less consistent insofar as they perform different
functions for the buyers.
 These four product–mix dimensions permit the company to expand its business in
four ways:-

• It can add new product lines, thus widening its product mix.
• It can lengthen each product line.
• It can add more product variants to each product and deepen its product mix.
• Finally, a company can pursue more product–line consistency.

 But before making these product and brand decisions, it is useful to conduct a proper
product–line analysis for getting a desirable result.
 Product–Line Analysis:- In offering a product line, companies normally develop a basic
platform and modules that can be added to meet different customer requirements.
Ex:- Car manufacturers build their cars around a basic platform.
Homebuilders show a model home to which buyers can add additional features.

 This modular approach enables the company to offer variety and to lower the
production costs.
 Product line managers need to know the sales and profits of each item in their line in
order to determine which items to build, maintain, harvest, or divest.
 They also need to understand each product line’s market profile.
 Sales And Profits:- Every company’s product portfolio contains products with different
margins.

 A company can classify its products into four types that yield different gross margins,
depending on sales volume and promotion:- Let’s illustrate it with a laptop example.

• Core Products:- Basic laptop that produce high sales volume are heavily promoted but
with low margins because they are viewed as undifferentiated commodities.
• Staples:- Items with lower sales volume and no promotion, such as faster CPUs or bigger
memories. These yield a somewhat higher margin.
• Specialties:- Items with lower sales volume but that might be highly promoted, such as
digital moviemaking equipment; or might generate income for services, such as personal
delivery, installation, or on-site training.
• Convenience Items:- Peripheral items that sell in high volume but receive less
promotion, such as carrying cases and accessories, sound cards, or software.

 Consumers tend to buy them where they buy the original equipment because it is more
convenient than making further shopping trips. These items usually carry higher margins.

 Market Profile:- The product-line manager must review how the line is positioned
against competitors’ line.

 Product–line analysis provides information for two key decision areas – Product–line
length and Product–mix pricing.

 Product–Line Length:- Company objectives influence the product–line length.

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 One objective is to create a product line to induce up-selling.
Ex:- Tata Motors moved its Indica and Indigo customers to Tiago, Tigor or Zest. Maruti
moved its 800 customers to Alto, Wagon R or Swift.
 A different objective is to create a product–line that facilitates cross–selling.
Ex:- HP sells printers, scanners as well as computers.
 Still another objective is to create a product–line that protects against economic ups
and downs.
Ex:- Videocon offers white goods such as refrigerators, washing machines, televisions,
microwave ovens, air conditioners under different brand names to cater to the entry–level,
mid–level and premium segments.
 Companies seeking high market share and market growth will generally carry longer
products lines, whereas companies that emphasize high profitability will carry shorter
lines consisting of carefully chosen items.
 Product lines tend to lengthen over time. Excess manufacturing capacity puts pressure
on the product–line manager to develop new items.
 The sales force and distributors also put pressure on the company for a more complete
product line to satisfy customers. But as items are added, costs also rise (design and
engineering costs, transportation costs, and new–item promotional costs etc).
 A company lengthens its product line in two ways:-

• Line Stretching:- Every company’s product line covers a certain part of the total possible
range.
Ex:- Mercedes automobiles are located in the upper price range of the automobile
market. Line stretching occurs when a company lengthens its product line beyond its current
range. The company can stretch its line down–market, up–market or both ways.

• Down – Market Stretch:- A company positioned in the middle market may want to
introduce a lower–priced line for any of the three reasons:-

 The company may notice strong growth opportunities as mass retailers attract a
growing number of shoppers who want value–priced goods.
 The company may wish to tie up lower–end competitors who might otherwise try to
move up–market. If the company has been attacked by a low–end competitor, it often
decides to counterattack by entering the low end of the market.
 The company may find that the middle market is stagnating or declining.
 A company faces a number of naming choices in deciding to move a brand down–
market:-

 Use the parent brand name on all its offerings.

Ex:- Sony has used its name on products in a variety of price tiers.
 Introduce lower-priced offerings using a sub-brand name.
Ex:- P&G’s Charmin Basics, Gillette Good News, Plasto. Etc.
 Introduce the lower–priced offerings under a different name.
Ex:- Tata’s Sonata & Fast Track watches.
• This strategy is expensive to implement, and consumers may not accept a New Brand
that lacks the equity of the parent brand name.

 Moving down–market carries risks.

Ex:- Kodak launched Funtime film to counter lower–priced brands, but it did not price
it low enough to match the lower–priced film. It also found some of its regular customers have

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 also started buying Funtime. Finally Kodak withdrew the product and may have also lost
some of its quality image in the process.
On the other hand, Mercedes successfully introduced its C – class cars at $30,000
without injuring its ability to sell other Mercedes cars for $1,00,000.
• Up–Market Stretch:- Companies may wish to enter the high end of the market to
achieve more growth, to realize higher margins, or simply to position themselves as a
full–time manufacturers. Many marketers have spawned surprising upscale segments.
Ex:- Toyota’s Lexus, Nissan’s infinity and Honda’s Civic & CRV.
• Two–Way Stretch:- Companies serving the middle market might decide to stretch their line
in both directions.
Ex:- Titan.
• Line Filling:- A firm can also lengthen its product line by adding more items within the
present range.

 There are several motives for line Filling:- Reaching for incremental profits, trying to
Satisfy Dealers who complain about lost sales because of missing items in the line, trying to
Utilize Excess Capacity, trying to be the Leading Full–Line Company, and trying to Plug
holes to Keep out Competitors.
Branding
 Brand:- The American Marketing Association defines a brand as “A name, term, sign,
symbol or design, or a combination of them, intended to identify the goods or the
services of one seller or group of sellers and to differentiate them from those of
competitors.”

 A brand is thus a product or service whose dimensions differentiate it in some way

from other products or services designed to satisfy the same need. The differences may
be functional, rational, or tangible related to product performance of the brand.
 In other words, a brand is an assurance or guarantee that the product will perform as
the customer thinks it should, which means, that the brand has already shaped the
expectations of the customers about itself.
 The brand embodies some values that remain consistent over a period of time. The
customer expects these values to be delivered to him during each encounter he has with
the brand.
 Hence, the company must realize that building a brand is not a short term activity.
Consistency is the most valued quality of a brand.
 Branding has been around for centuries as a means to distinguish the goods of one
producer from those of another.
Ex:- In the fine arts, branding began with artists signing their works.
 Brand today play a number of important roles that improve consumers’ lives and
enhance the financial value of the firms.

 The role of Brands:- Brands identify the source or maker of a product and allow
consumers – either individuals or organizations – to assign responsibility for its
performance to a particular manufacturer or distributor.
 Consumers may evaluate the identical product differently depending on how it is
branded.
 They learn about brands through past experiences with the product.
 As consumers’ lives become more complicated, rushed and time starves, the ability of a
brand to simplify decision making and reduce the risk involved, is invaluable.
 Brands also perform valuable functions for firms:-
• They simplify product handling or tracing.

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• A brand also offers the firm legal protection for unique features or aspects of the
product.
 The brand name can be protected through registered trademarks; manufacturing processes
can be protected through patents; and packaging can be protected through copyright
and proprietary designs.
 These intellectual property rights ensure that the firm can safely invest in the brand
and reap the benefits of a valuable asset.
• Brands, signal a certain level of quality so that satisfied buyers can easily choose the
product again.
 Brand loyalty provides predictability and security of demand for the firm, and it creates
barriers to entry that make it difficult for other firms to enter the market.
 This loyalty also can translate into customer willingness to pay a higher price often
20% to 25% more than competition brands.

• To firms, brands represent enormously valued piece of legal property that can
influence consumer behavior, be bought and sold, and provide the security of
sustained future revenues to their owners.
 The Scope of Branding:- Branding is endowing products and services with the power of
a brand.
 It is all about creating differences between products. Marketers need to teach consumers
‘who’ the product is – by giving it a name and other brand elements to identify it – as
well as what the product does and why consumers should care.
 Branding creates mental structures that help consumers organize their knowledge,
about products and services in a way that clarifies their decision making and in the
process, provides value to the firm.
 For Branding strategies to be successful and brand value to be created, consumers must be
convinced there are meaningful differences among brands in the product or service category.
Ex:- Gillette, Merk, etc.
These have been leaders in their product categories for decades, due to
continuas innovation in their segment.
Gucci, Nike, Adidas and others have become leaders in their product categories by
understanding consumer motivations and decisions and creating relevant and appealing
images around their products.
 Marketers can apply branding virtually anywhere a consumer has a choice.
 It is possible to brand a Physical good (Maggi Noodles, Lux soap, Tata Indica/Indigo
automobile), a Service (ICICI bank, Jet airways, Blue Dart courier service), a Store (Big
Bazar, Pantaloon, Shopper’s stop), a Person (Aamir Khan, Sachin Tendulkar), a Place (the
state of Goa, the city of Bangalore or the country India), an Organization (UNICEF,
Automobile Association of India), or an Idea (Family Planning, Blood Donation, freedom of
speech).

 Brand Equity:- Brand equity is the added value endowed on products and services
because of their brand name.
 It may be reflected in the way consumers think, feel, and act with respect to the brand,
as well as in the prices, market share, and profitability the brand commands for the firm.
 Customer–based brand equity is the differential effect that brand knowledge has on
consumer response to the marketing of that brand.
• There are three key ingredients of customer–based brand equity:
• Brand equity arises from differences in consumer response. If no differences occur, then
the said branded product is essentially a commodity or generic version of the product.
Here competition will probably be based on price.
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• Differences in response are a result of consumer’s knowledge about the brand.

 Brand knowledge consists of all the thoughts, feelings, images, experiences, beliefs,
and so on that become associated with the brand.
 In particular, brands must create strong, favorable, and unique brand associations with
customers.
Ex:- Volvo, H.P, Harley–Davidson.
• The differential response by consumers that makes up brand equity is reflected in
perceptions, preferences, and behavior related to all aspects of the marketing of a brand.
Stronger brands lead to greater revenue.

 The challenge for marketers in building a strong brand is therefore ensuring that customers
have the right type of experiences with products, services and their marketing programs to
create the desired brand knowledge.

 Some Key Benefits of Brand Equity:-

 Improved perceptions of product performance.
 Greater loyalty.
 Less vulnerable to competitive marketing actions.
 Less vulnerable to marketing crises.
 Larger margins.
 More inelastic consumer response to price increases.
 More elastic consumer response to price decreases.
 Greater trade cooperation and support.
 Increased marketing communications effectiveness.
 Possible licensing opportunities.
 Additional brand extension opportunities.
 Brand Elements:- Brand elements are those trademark able devices that identify and
differentiate the brand.

 Most of the strong brands employ multiple brand elements.

Ex:- Nike has the distinctive ‘swoosh’ logo, the empowering ‘just do it’ slogan, and the
‘Nike’ name based on the winged goddess of victory.

• Brand Element Choice Criteria:- There are six main criteria for choosing brand elements.

 The first three – Memorable, Meaningful, and Likable – are ‘Brand building’.

 The latter three – Transferable, Adaptable, and Protectable – are ‘Defensive’ and deal
with how to leverage and preserve the equity in a brand element in the face of
opportunities and constraints.
• Memorable:- How easily is the brand element recalled and recognized? Is this true at
both purchase and consumption?
 Short brand names such as Lux, LG, Taj are memorable brand elements.
• Meaningful:- Is the brand element credible and suggestive of the corresponding
category? Does it suggest something about a product ingredient or the type of person
who might use the brand?
Ex:- Fair & Lovely fairness cream, Close–Up toothpaste, Mother’s Recipe pickles. Etc.
• Likable:- How aesthetically appealing is the brand element? Is it likable visually, verbally,
and in other ways?
 Concrete brand names such as Scorpio, Splendor etc. evoke much imagery.

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• Transferable:- Can the brand element be used to introduce new products in the same or
different categories?

 Although initially an online book seller, Amazon.com was smart enough not to call itself
“Books ‘R’ Us.” The Amazon is famous as the world’s biggest river, and the name suggests the
wide variety of goods that could be shipped, an important descriptor of the diverse range of
products the company now sells.

• Adaptable:- How adaptable and updatable is the brand element?

 Lifebuoy, launched in the year 1895, with its brick red color and the cresylic perfume,
underwent several changes over the years.
The biggest change took place in the year 2002, when the brand was re-launched with
new formulations, colour, fragrance, and packaging to make the brand contemporary.
With the re-launch, Lifebuoy made a conscious shift in its positioning from the
victorious male concept of health to a warmer and more versatile benefit of health for the
entire family.
 Although the product formulation, packaging, and other brand elements have changed to
synchronize with the changing consumer perceptions and preferences, the brand continues
to maintain its core value proposition of ‘health’.

• Protectable:- How legally protectable is the brand element? How competitively

protectable?
 Names that become synonymous with product categories – such as Kleenex, Surf, Scotch
Tape, Xerox, Fiberglass – should retain their trademark rights and not become generic.

 Co–Branding and Ingredient Branding:-

• Co–Branding:- In Co–branding which is also known as Dual branding or Brand building

– two or more well–known brands are combined into a joint product or marketed
together in some fashion.

 One form is same–company Co–Branding, as when Gillette India jointly promotes its
Gillette Mach 3 Turbo saving system and Gillette Shaving Gel.
Eureka Forbes jointly promotes its water purifier Aquagrard and vacuum cleaner
Euroclean.
 Another form is joint venture Co–Branding, as in the case of Indian Oil and Citibank co–
branded credit cards.
 Further there is multiple–sponsor Co–branding, such as Taligent, a one-time technological
alliance of Apple, IBM, and Motorola.
 Finally, there is retail co–branding where two retail establishments, such as fast-food
restaurants, use the same location as a way to optimize both space and profits.
 The main advantage of co-branding is that a product may be convincingly positioned by
virtue of the multiple brands.
 Co-branding can generate greater sales from the existing target market as well as
opening additional opportunities for new consumers and channels.
 It can also reduce the cost of product introduction, because it combines two well-known
images and speeds adoption.
Ex:- The automobile industry has well adopted the Co-Branding.
 The potential disadvantages of co-branding are the risks and lack of control in becoming
aligned with another brand in the minds of consumers.

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 Consumer expectations about the level of involvement and commitment with co-brands are
likely to be high, so unsatisfactory performance could have negative repercussions for
both brands.
 For co-branding to succeed, the two brands must separately have brand equity –
adequate brand awareness and a sufficiently positive brand image.
 Research studies show that consumers are more apt to perceive co-brands favorably if
the two brands are complementary rather than similar.
• Ingredient Branding:- Ingredient branding is a special case of Co-Branding. It creates
brand equity for materials, components, or parts that are necessarily contained within other
branded products.
Ex:- Intel Processors, Lucus automobile parts.
 Ingredient brands try to create enough Awareness and Preference for their product so
consumers will not buy a ‘host’ product that doesn’t contain the ingredient.

 Packaging:- Packaging can be defined as all the activities of Designing and Producing
the containers for a product.

 Packages might include up to three levels of material.

Ex:- Cool Water cologne comes in a bottle (Primary package) in a cardboard box
(secondary package) in a corrugated box (shipping package) containing six dozen boxes.
 Well-designed packages can build brand equity and drive sales.
 The package is the buyer’s first encounter with the product and is capable of turning
the buyer on or off. Packaging also affects consumers’ later product experiences.
 Various factors have contributed to the growing use of packaging as a marketing
tool:-

• Self – Service:- An increasing number of products are sold on a self-service basis. In an

average supermarket, which stocks 15,000 items, the typical shopper passes by some 300 items
per minute. Given that 50% to 70% of all purchases are made in the store, the effective
package must perform many of the sales tasks: Attract attention, Describe the
product’s features, Create consumer confidence, and Make a favorable overall
impression.

• Consumer Affluence:- Rising consumer affluence means consumers are willing to pay a
little more for the Convenience, Appearance, Dependability, and Prestige of better
packages.
• Company and Brand Image:- Packages contribute to instant recognition of the
company or brand.
 In the store, packages for a brand can create a visible billboard effect, such as Garnier
Fructis and their bright green packaging in the hair care aisle.

• Innovation Opportunity:- Innovative packaging can bring large benefits to consumers

and profits to producers.
 Companies are incorporating unique materials and features such as re-sealable spouts and
openings.
Ex:- Calcium Sandoz bottles, targeted at children and women, have been designed to
make them attractive to the target customer.
 From the perspective of both the firm and consumers, packaging must achieve a number
of objectives:-
• Identify the brand.
• Convey descriptive and persuasive information.
• Facilitate product transportation and protection.
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• Assist at-home storage.
• Aid product consumption.

 The packaging elements must harmonize with each other and with pricing,
advertising, and other parts of the marketing program.
 Packaging changes can give immediate impact on sales.
Ex:- Book publishing industry, where customers often quite literally choose a book by
its cover.
 After the company designs its packaging, it must test it.
 Engineering tests ensure that the package stands up under normal conditions; Visual tests,
that the script is legible and the colors harmonious; Dealer tests, that dealers find the
packages attractive and easy to handle; and Consumer tests, that buyers will respond
favorably.
 Eye tracking by hidden cameras can assess how much consumers notice and examine
packages.
 Although developing effective packaging may cost considerable amount of money and
take several months to complete, companies must pay attention to the growing
environmental and safety concerns about packaging.
 Labeling:- A label may be a simple tag attached to the product or an elaborately
designed graphic that is part of the packaging.

 It might carry only the brand name, or a great deal of information.

 The type of label also depend on the legal requirement.
 Labels perform several functions such as:-

• The label identifies the product or brand.

• The label might also grade the product.
• The label might describe the product: Who made it, Where it was made, When it was
made, What it contains, How it is to be used, and How to use it safely.
• The label might also promote the product through attractive graphics.

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