Chapter 9 - Product, Branding, and Packing Decisions Flashcards
Complexity of Products
There is more to a product than its physical characteristics or its basic service function
In the complexity -
Core customer value -
the basic problem-solving benefits that consumers are seeking
Associated services (or augmented product) -
- include the non-physical aspects of the product, such as product warranties, financing, product support, and after-sale service
- When developing or changing their product, marketers start with the core customer value to determine what their potential customers are seeking
Types of Products
- consumer products
are products and services used by people for their personal use
Speciality products/ services
- are products or services toward which customers show such a strong preference that they will expend considerable effort to search for the best suppliers
- Luxury cars, legal or medical professionals, or designer apparel
Shopping products/ services
products/ services - such as furniture, apparel fragrances, appliances, and travel alternatives - for which consumers will spend a fair amount of time comparing alternatives
- Buying new shoes/ clothes
Convenience goods/ services -
consumer is not willing to spend any effort to evaluate prior to purchase. They are frequently purchased commodity items, usually bought with little thought
- Common beverages, bread, soap
Unsought products/ services
consumers do not usually think of buying or do not know about. Due to their nature, these products require a lot of marketing effort and various forms of promotion
Funeral services, fire extinguishers
Product mix
the complete set of all products offered by a firm
Product mix typically consists of various product lines - which are groups of associated items, such as items that consumers use together or think of as part of a group similar products
Product category
an assortment of items that the customer sees as reasonable substitutes for one another
Brands
the names, terms, designs, symbols, or any other features that identify one seller’s good or service as distinct from those of other sellers
Product mix breadth -
(variety) represents the number of product lines offered by the firm
Product line depth
the number of product categories within a product line
Canada goose - offers parkas, vests, hoodies, etc
Stock keeping units (SKUs) -
- the smallest unit available for inventory control
- Adding unlimited numbers of new products can have adverse consequences - too much variety in the product mix can be too costly to maintain, and having too many brands may dilute the overall reputation
Increase Breadth -
- Firms often add new product lines to capture new or evolving markets, increase sales, and compete in new venues
Decrease Breadth
sometimes it is necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities
Increase Depth -
firms may add new products within a line to address changing consumer preferences or pre-empt competitors while boosting sales
Decrease Depth -
sometimes it is necessary to delete product categories to realign resources - eliamite unprofitable items and refocus their marketing efforts on more profitable items
Branding
A company lives or dies based on brand awareness - Branding provides a way for a firm to differentiate its product offerings from those of its competitors -
brand names, characters, slogans, jingles, and even distinctive packages constitute the various brand elements firms use, which they usually choose to be easy for consumers to recognize and remember
Brand name
the spoken component of branding, it can either describe the product or service/ product characteristics and/ or be composed of words invented or derived from the colloquial or contemporary language
Urls
uniform resource locators or domain names, the location of pages on the internet
logos/ symbols -
s - logos are visual branding elements that stand for corporate names or trademarks. Symbols are logos without words
Nike swoosh, mercedes star
Characters
brand symbols that can be human, animal, or animates
Pillsbury doughboy
Slogans
short phrases used to describe the brand or persuade consumes about some characteristics of the brand
Jingles
audio messages about the brand that are composed of words or distinctive music
Value of Branding
- brands faciliate purchasing
- establish loyalty
- protect from competition and price competition
- reduce marketing costs
- brands are assets
- impact market value
Brands Facilitate Purchasing
Brands are often easily recognized by consumers and, because they signify a certain quality level and contain familiar attributes, brands help consumers make quick decisions
Brands Establish Loyalty -
Over time and with continued use, consumers learn to trust certain brands
Brands Protect From Competition and Price Competition
Because strong brands are more established in the market and have more loyal customer base, neither competitive pressures on price nor retail- level competition is as threatening to the firm
Brands Reduce Marketing Costs -
- Firms with well known brands spend relativity less on marketing costs than firms with little-known brands because the brand sells itself
Brands are Assets
Brands are also assets that can be legally protected through trademarks and copyrights and thus constitute a unique ownership for the firm - firms sometimes have to fight to keep their brands pure
Brands Impact Market Value
Having a well-known brand can have a direct impact on the company’s bottom line
The value of a company is its overall monetary worth, comprising a vast number of asses - when the brand loses value, it also threatens other assets
Branding
- brand equity
of the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service
- Brand health must be actively managed to maintain a positive image
- Brands are assets that the firm can build, manage, and harness over time to increase its revenue, profitability, and overall value
Brand Awareness
measures how many consumer in a market are familiar with the brand and what it stands for, and have an opinion about that brand
Perceived Value -
is the relationship between a product or service’s benefits and its costs
Customers usually determine the offerings value in relationship to that of its close competitors
Brand Associations
reflect the mental links that consumers make between a brand and its key product attributes, such as a logo, slogan, or famous personality
Brand Loyalty -
occurs when a consumer buys the same brand’s products or service again and again over time, as a result brand-loyal customers are an important source of value for firms
Brand Ownership Strategies
- manufacture brands
- private label brands (store brands)
- generic
Manufacturer brands
are owned and managed by the manufacturer - By owning their brands, manufacturers retain more control over their marketing strategy, are able to choose the appropriate market segments and positioning for the brand, and can build the brand and thereby create their own brand equity
private label brands (store brands) -
brands developed and marketed by a retailer and available only from that retailer
Generic
products are those sold without brand names, typically in commodities markets - in these markets the popularity and acceptance of generic products has declined and consumers question the quality and origin of the products, and retailers have found better profit potential and the ability to build brand equity with manufacturer and store brand
Brand Name Strategies
- family brand
- individual brand
Family brand
the use of combination of the company brand name and individual brand name to distinguish a firm’s products
Ex - Kelloggs
Individual brand
the use of individual brand names for each of a firm’s products
Choosing a name
when it comes to naming new products, companies should consider the following - descriptive and suggestive of the benefits/qualities, easy to pronounce, recognize and remember, easy to translate into different languages
Brand Extension
- refers to the use of the same brand name for new products being introduced to the same or new markers
Brand extension pros
Good when brand name is already established, company spends less time developing consumer brand awareness, perception is carried to new brand, produces complementary products - synergy exists and increase overall sales
Brand dilution
occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold
-
Try to avoid brand dilution
Carefully evaluate the fit between the product class of the core brand and that of the extension
Evaluate customer perception and seek out similar extensions
Refrain from extending the brand name to too many products - damage brand equity
Cobranding
is the practice of marketing two or more brands together, on the same package or promotion
Enhances consumer perceptions of product quality
Brand Licensing
- Contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee
- Effective form of attracting visibility for the brand and thereby building brand equity
Packaging
- Packaging is an important brand element with more tangible or physical benefits than the other brand elements because packages come in different types and offer a variety of benefits to consumers, manufacturers, and retailers
- Packaging attracts the consumers attention, enables products to stand out from their competitors and offers a promotional tool
- Affect consumers and drive impulse buying
Labeling
- Labels on products and packages provide information that consumers need for their purchase decisions and consumption of the products
They identify the product and brand, labels are also an important element of branding and can be used for promotion
Labels are communication tools - elements are how the manufacturers to communicate the benefits of the product
