Products & Brands

What is a product? Anything that can be offered to a market

for attention, acquisition, use, or consumption that might satisfy a want or need.

Include physical objects, services, events, persons, places, organizations, ideas, or mixes of these entities. iPod, Camry, BigMac. Doctor’s advice, vacation service, financial services.

Service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Levels of Product and Services

3 levels: each level adds to customer value

The core benefit. E.g. Blackberry Actual product: features, design, quality

level, a brand image, and packaging. E.g. Blackberry: actual product, its name, parts, styling, features, and packaging.

Augmented product. Offer consumer services and benefits. (warranty, instructions, quick repair and maintenance when needed)

Product and Service Classification

Consumer Product: product bought by final consumer for personal consumption

Include: Convenience product: that the customer

usually buys frequently, immediately, and with a minimum comparison and buying effort: soap, candy, newspaper, fastfood.

Shopping product: that the customer usually buy carefully on suitability, quality, price, and style: furniture, clothing, appliances, hotel, travel service.

Specialty product: consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort: Ferrari FXX, Boss, BB, Disney.

Unsought product: consumer product that the consumer either does not know about or knows about but does not normally think of buying: life insurance, blood donations, living funeral service.

Industrial Product

Product bought by individuals and organizations for further processing or for use in conducting a business.

Materials and parts (wheat, cotton, livestock, crude petroleum) (iron, cement, wires, tires, motors)

Capital items (buildings, generators, trucks etc)

Supplies and services (lubricants, coal, paper, pencils, paints, brooms, conservancy items

Product and Service Decision

Individual product decisions

Product line decisionsProduct mix decisions.

Individual Product Decisions

Product attributes: benefits that a product will offer.

Quality: “freedom from defects” “characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs”

Siemens defines quality this way: “Quality is when our customers come back and our products don’t”

Two dimensions: performance quality – Rolls Royce, Rolex, Marriot Renaissance. Conformance quality – consistence in delivering a target level of performance: Chevrolet

Product features: are a competitive tool for differentiating the company’s product from competitors’ product.

Product style and design: style is appearance of product. Design contributes to a product’s usefulness as well as its looks. “Swiffer Carpetflick”U Shaped lock by Kryptonite.

Branding

Brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service.

212 Men, Swatch etc Hardly anything goes unbranded Branding helps consumer identify

products that might benefit them. Say something about quality and consistency.

Building and managing brands are the marketer’s most important tasks.

Packaging Involves designing and producing the container

or wrapper for a product. Cluttered shelves, attracting attention,

describing the product, to making the sale. 300 items per minute. 60 % of all purchases are

made on impulse. Poorly designed packages can cost companies. Heinz bottle design. Chip Ahoy by Kraft Foods Juice packs Product safety Environmental concerns

Labeling

Labels: tags attached to products. Identifies the product or brand, Frooti stamped on orange, zenith etc.

Who made it, where it was made, when it was made, its contents, how it is to be used, how to use it safely.

Product Line Decisions

Product line: a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price range. E.g. Nike, Nestle

Product line-length: the number of items in the product line. BMW 3 series, 5, 7 series.

Downward: DaimlerChrysler Mercedes C-Class. Toyota, Nissan, Honda luxury cars.

Marriot Example

Renaissance Hotels & Resorts: top executives

Marriot: upper and middle managers Courtyard: salespeople & road warriors Fairfield: vacationers and business

travelers on tight budgets. ExecuStay: temporary housing for 30

days Residence Inn: for people who travel for a

living

Product Mix Decisions The set of all product lines and items that a

particular seller offers for sale. Colgate: oral care, personal care, home care,

and pet nutrition. Four dimensions: width, length, depth, and

consistency. Width: number of different product lines. Length: the total number of items the company

carries within its product line. 3 M markets 60,000 products, Wal Mart stocks 100 -12000 items, GE manufactures 250,000 items.

Depth: the number of versions offered of each product in the line. Colgate toothpastes 11 varieties: Colgate Total, Colgate Tartar Control, Colgate 2 in 1, Colgate Cavity Protection, Colgate Sensitive, Colgate Fresh Confidence, Colgate Max Fresh, Colgate Simply White, Colgate Sparkling White, Colgate Kids Toothpaste, Colgate Baking Soda.

Consistency: refers to how closely related the various product lines are in end use, production requirements, distribution channels.

Branding Strategy

Major asset of a company. Are more than names and symbols. They

represent consumers’ perceptions and feeling about a product and its performance. Brands exist in the minds of consumers.

Real power: to capture consumer preference and loyalty.

Coca-Cola, Tide, Nike, Harley-Davidson, Disney forge deep connections with customers.

Powerful brand has high brand equity. The positive differential effect that knowing

the brand name has on customer response to the product or service.

To what extent people are willing to pay more for the brand.

A brand with strong brand equity is a very valuable asset. Brand valuation is the process of estimating the total financial value of a brand. Coca-Cola $67 billion, Microsoft $ 57 billion, IBM $ 56 billion.

Brand can: provide competitive advantage. Brand awareness and loyalty. Bargaining with resellers. Brand extensions launch. Protection against fierce price competition. Profitable customer relationship.

Branding Strategies

Brand positioning: Position product in target

customers’ mind Product Attributes Desirable benefits – Volvo, FedEx,

Lexus, Nike Strong beliefs and values – strong

brands engage customers on a deep, emotional level (empower socially)

Brand name selection: Good name can add to product success Should relate to product benefits and

qualities – Lexus, Jaguar, Swift, Off!, Knorr, Haleeb, MilkPack

Easy to pronounce: IBM, AT & T, Voda fone, KFC, Burger King

Distinct, Z-4, GTR, Oracle Brand name identified with product

category: Xerox, Kleenex, Scotch Tape, Formica, Fiberglass

Brand Sponsorship

A product may be launched as:

Manufacturer’s brandPrivate brandLicensed brandCo-brand

Brand Development

Line extensions: Extending an existing brand name to new forms, colors, sizes, ingredients, or flavor of an existing product: Nestle Pure Life

Coke: Diet Coke, Diet Coke with Splenda, Coca Cola Zero

Diet Cherry Coke, Diet Coke with Lemon, Diet Coke with Lime, Diet Coke Black Cherry Vanilla, Caffeine Free Diet Coke – Coca Cola C – 2.

Brand Extensions

Extending an existing brand name to a new product category

Kimberly – Clark – Huggies Brand: Shampoos, Lotions, Baby Wash

Brinks – Brinks Home Security System

Multi BrandsNew Brands

Additional Brands in the same category

P& G: different features for different buyers

Existing wane – new brands needed

Matsushita – Panasonic, Technics, JVC, Quasar

Product Life Cycle

Product launch – happy lifeCover costsEarn profitsLength not know in advanceCoca-Cola, Gillette, Budweiser,

American Express, Wells-Fargo, and Tabasco

PLC – S Curve

Introduction Stage

Product launchTakes timeSlow growthNegative profitsHigh promotion and

distribution cost

Growth Stage Product, if satisfies market, enters

growth stage Sales climb quickly Early adopters continue, new join

through favorable word of mouth New competitors enter market Competition – increase in sale points Spread of sales, unit cost reduces Sustain rapid growth New market segments Prices may be lowered to attract more

customers (iPod)

Maturity

At some point sale slows down, product enters maturity stage

Lasts longer Marketing management most of the time

deals with mature products More producers selling the same product Greater competition Prices down, increase in sales promotion Drop in profit Well established competitors stay

Maturity

Product manager should modify market, product and marketing mix

Market: increase consumption of product, new users, present users

Product: quality, features, style (milk pak, Honda City)

Four Ps

Decline Stage Eventually dip Oat meal, VHS tapes, VCR, Tape recorders Reasons: technology, consumer tastes,

increased competition, profits decline, withdrawal from market

Furthermore: Weak product costly to firm Management time Price adjustments Advertising/sales efforts Reputation of other co products affected Old Spice/ co can sell brands