Page 369 - Marketing Management

346 PART 5 SHAPING THE MARKET OFFERINGS

Many manufacturers make components or materials that enter final branded products but
lose their individual identity. One of the few companies that avoided this fate is Intel.
Intel’s consumer-directed brand campaign convinced many personal computer buyers to buy
only brands with “Intel Inside.” As a result, major PC manufacturers—IBM, Dell, Compaq—
purchase their chips from Intel at a premium price rather than buy equivalent chips from an
unknown supplier.
What are the requirements for successful ingredient branding? 55

1. Consumers must believe the ingredient matters to the performance and success of the end
product. Ideally, this intrinsic value is easily seen or experienced.
2. Consumers must be convinced that not all ingredient brands are the same and that the ingre-
dient is superior.
3. A distinctive symbol or logo must clearly signal that the host product contains the ingredient.
Ideally, this symbol or logo functions like a “seal” and is simple and versatile, credibly commu-
nicating quality and confidence.
4. A coordinated “pull” and “push” program must help consumers understand the advantages of
the branded ingredient. Channel members must offer full support such as consumer advertis-
ing and promotions and—sometimes in collaboration with manufacturers—retail merchan-
dising and promotion programs.

Packaging, Labeling,Warranties,

and Guarantees

Some product packages—such as the Coke bottle and Red Bull can—are world famous. Many
marketers have called packaging a fifth P, along with price, product, place, and promotion.
Most, however, treat packaging and labeling as an element of product strategy. Warranties
and guarantees can also be an important part of the product strategy and often appear on the
package.

Packaging
Packaging includes all the activities of designing and producing the container for a product.
Packages might have up to three layers. Cool Water cologne comes in a bottle (primary package) in
a cardboard box (secondary package) in a corrugated box (shipping package) containing six dozen
bottles in cardboard boxes.
The package is the buyer’s first encounter with the product.A good package draws the consumer
in and encourages product choice. In effect, they can act as “five-second commercials”for the prod-
uct. Packaging also affects consumers’ later product experiences when they go to open the package
and use the product at home. Some packages can even be attractively displayed at home. Distinctive
packaging like that for Kiwi shoe polish, Altoids mints, and Absolut vodka is an important part of a
brand’s equity. 56
Various factors contribute to the growing use of packaging as a marketing tool:

• Self-service. An increasing number of products are sold on a self-serve basis. In an average su-
permarket, which may stock 15,000 items, the typical shopper passes some 300 products per
minute. Given that 50 percent to 70 percent of all purchases are made in the store, the effective
package must perform many sales tasks: attract attention, describe the product’s features, cre-
ate consumer confidence, and make a favorable overall impression.
• Consumer affluence. Rising 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, they can create a billboard effect, such as Garnier Fructis with its bright
green packaging in the hair care aisle.
• Innovation opportunity. Unique or innovative packaging such as resealable spouts can bring
big benefits to consumers and profits to producers.