product and branding strategies. the product and the product mix product physical goods services...
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Product and Branding Strategies
The Product and the Product Mix
Product Physical goods Services Experiences Events Persons Places Properties Organizations Information Ideas
Components of the Market Offering
What is a Product?
A Product ğ anything that can be offered to a market for attention, acquisition, or consumption and that might satisfy a want or need. Includes:
Physical Objects Services Events Persons Places Organizations Ideas Combinations of the above
What Is a Service?
A form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.
Examples: banking, hotel, airline, retail, tax preparation, home repairs.
Products, Services, and Experiences
Pure Tangible
Good
Pure Service
Soap
Tangible Good With
Accompanying Services
Auto With Accompanying Repair Services
Hybrid Offer
Restaurant
Service With Accompanying Minor Goods
Airline Trip With Accompanying
SnacksDoctor’s Exam
Levels of Product
Product levels--Customer value hierarchy Core benefit Basic product Expected product Augmented product Potential product
Levels of Product
Product Classifications
Durability-Tangibility Nondurable goods
Durable goods
Services
Shopping ProductsShopping Products Bought less frequently Higher price Gather product information Comparison shopping
Suitability & Quality Price & Style
Fewer purchase locations
Convenience ProductsConvenience Products Purchased frequently& immediately Low priced Mass advertising Many purchase locations
Staple goods Impulse goods Emergency goods
Specialty ProductsSpecialty Products Special purchase efforts High price Unique characteristics Brand identification Few purchase locations
Unsought ProductsUnsought Products New innovations Products consumers don’t want to think about Require much advertising &personal selling
Product Classifications -Consumer Products
MARKETING CONSIDERATIONS
Convenience
Shopping Speciality Unsought
General Characteristics
Frequent purchase,little compar., no planning, low involvement
Less frequent purchase,much effort, planning
Strong brand preference,loyalty,little comp.,low price sens.
Little awareness,knowledge
Price/distribution
Low price, widespread distr., convenient location
Higher price,selective distribution in fewer o.let
High price,exsclusive distr.
Varies
Promotion Mass promotion
Adv.,pers. selling by producer and retailers
More carefully targeted promotion
Aggressive adv. & p.selling
Supplies and ServicesOperating supplies, repair,
and maintenance items
Supplies and ServicesOperating supplies, repair,
and maintenance items
Materials and PartsRaw materials, manufactured
materials, and parts
Materials and PartsRaw materials, manufactured
materials, and parts
Capital ItemsProducts that aid in buyer’s
production or operations
Capital ItemsProducts that aid in buyer’s
production or operations
Product Classifications - Industrial Products
Product Classifications -Other Marketable Entities
Activities undertaken to create, maintain, or change the attitudes and behavior toward the following:
Organizations, Persons, Places, Ideas, etc.
Product Strategy
• Product Strategy decisions includes ğ decisions on:
• branding, • packaging, • labeling,• and services for individual products
• Product Strategy also calls ğ for managing the product lines and product mix.
Individual Product Decisions
Product Attributes
Branding
Packaging
Labeling
Product Support Services
Product Quality Product Quality
Product FeaturesProduct Features
Product Style & Design
Product Style & Design
Ability of a Product to Perform Its Functions (Includes Performance Quality and Conformance Quality)
Ability of a Product to Perform Its Functions (Includes Performance Quality and Conformance Quality)
Help to Differentiate the Product from Those of the Competition(Value to customer; cost to company)
Help to Differentiate the Product from Those of the Competition(Value to customer; cost to company)
Process of Designing a Product’s Style & Function
(Influences experience)
Process of Designing a Product’s Style & Function
(Influences experience)
Developing a product or service involves ğ Defining the benefits that it will offer such as:
Product Attributes
Packaging
Designing and producing the container or wrapper for a product.
Packaging used to just contain and protect the product
Packaging now has promotional value
Packaging
Developing a good package:
Protect the elements Ensure product
safety Market the brand Address
environmental concerns
Marketers should: Establish a packaging
concept, Develop specific
elements of the package, Tie together elements to
support the positioning and marketing strategy.
Packaging
Packaging ğ a crucial marketing tool
Self-service ğ the package must perform many of the sales tasks
Consumer affluence ğ consumers are willing to pay a little more for convenience, appearance, and prestige for better packages
Packages contribute to instant recognition of the company or brand image
The packaging offer an opportunity for innovation
Labeling
Identifies product or brand Identifies product or brand
Describes several things about the product
Describes several things about the product
Promotes the product
through attractive graphics
Promotes the product
through attractive graphics
Printed information appearing on or with the package.
Performs several functions:
Product - Support ServicesCompanies should design support services to profitably
meet the needs of target customers and gain competitive advantage.
How?Step 1. Survey customers to assess the value of current services and to obtain ideas for new services.
Step 2. Assess costs of providing desired services.
Step 3. Develop a package of services that delights customers and yields profits to the company.
Product Line
Product Line ğ 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 ranges
Product Mix
WidthWidth - number of different product
lines
WidthWidth - number of different product
lines
LengthLength - total number of itemswithin the lines
LengthLength - total number of itemswithin the lines
Depth Depth - number of versions of each
product in the line
Depth Depth - number of versions of each
product in the line
Product Mix - Product Mix - all the product
lines offered
Product Mix - Product Mix - all the product
lines offered
Co
nsi
sten
cy
-- A-- All of the product ll of the product lines and items that a lines and items that a particular seller offers particular seller offers for salefor sale----
Product-Mix Width and Product-Line Length for Procter& Gamble Products
PRODUCT-LINE LENGTH
Product-Mix Width
Detergents ToothpasteDisposable Bar Soap Diapers
Paper Tissue
Ivory Snow (1930)
Dreft (1933)
Tide (1946)
Cheer (1950)
Gleem (1952)
Crest (1955)
Ivory (1879)
Kirk’s (1885)
Lava (1893)
Camay (1926)
Pampers (1961)
Luvs (1976)
Charmin (1928)
Puffs (1960)
Banner (1982)
Summit (1992)
Product Mix Decisions
4 ways that the company can use in expanding its business:
It can add new product lines, widening its product mix It can can lengthen each product line (becoming a more
full-line company) It can add more versions of each product, deepening
its product mix It can pursue more product line consistency -or less
(depending on the strategic position that the firm wants to acquire in the market)
Product Line Decisions: Product Line Analysis
Product Line Analysis: Companies need to know the sales and profits of each item to determine which items to build, maintain, harvest or divest. Sales/profits : A high concentration of sales in a
few items means line vulnerability. (if one of the items account for 5-6 % of sales and
profit, this item may be dropped.) Market profile : How the line is positioned
against competitors’lines
Product-Item Contributions to a Product Line’s Total Sales and Profits
The Product and the Product Mix
Market profile: How the line is positioned against competitors’ lines.
Product Map for a
Paper-Product Line
Product-Line Lenght
Product line length ğ the number of items in a product line. The line is too short if the manager can increase profits by adding items The line is too long if the manager can increase profits by dropping items Product line length is influenced by company objectives.
Product Line Decisions: Product Line Analysis
Product Line Analysis: Companies need to know the sales and profits of each item to determine which items to build, maintain, harvest or divest.
Sales/profits : A high concentration of sales in a few items means line vulnerability.
(if one of the items account for 5-6 % of sales and profit, this item may be dropped.)
Market profile : How the line is positioned against competitors’lines
Product Line Decisions Product lines ğ tend to lenghten over time
Design/engineering costs, Inventory carrying costs order processing/ transportation/promotion costs increase
The company can adjust the length of its product line mainly in 2 ways:
Line Stretching Downmarket Upmarket Two-way
Line Filling
Product Line Decisions: Product Line Stretching
Downward stretch ğ occurs when the company moves from the high end of the market to the lower end
Upward stretch ğ when companies at the lower end of the market want to enter the higher end.
Two-way stretch ğ when companies in the middle range of the market decide to stretch their lines in both directions
Marriott offers a full line of hotel brands, each aimed at a different market.
Product Line Stretching
Product Line Decisions:Product Line Filling
Line Filling ğ increasing the product line by adding more items within the present range of the line
Main Reasons: To reach extra profits, To try to satisfy dealers, To use excess capacity, To fill up the holes in the market in order to
keep out competition To be the leading full-line company
Product Line Decisions
Line modernization In rapidly changing product markets, modernization
is carried on continously Microprocessor and software companies
Line Featuring/Line Pruning One or few items are selected to feature. Sometimes, managers feature promotional models at
the low end of the line to serve as “traffic builders”.
Branding
A 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.
Essentially; A brand ğ a seller’s promise
to deliver a specific set of features, benefits and services consistently to the buyers.
Most Valuable Global Brands(Interbrand, 2006)
Rank /brand Origin Value($m) Change1. Coca-Cola US 67,000 -1%2. Microsoft US 56,926 -5%3. IBM US 56,201 5%4. GE US 48,907 4%5. Intel US 32,319 -9%6. Nokia Finland 30,131 14%7. Toyota Japan 27,941 12%8. Disney US 27,848 5%9. Mc Donlad's US 27,501 6%10. Mercedes Germany 21,795 9%11. Citi US 21,458 7%12. Marlboro US 21,350 1%13. Hewlett Packard US 20,458 8%14. American Express US 19,641 6%15. BMW Germany 19,617 15%
Branding
makes it easier for the seller to process orders / track down problems
brand name and trademark provide legal protection of unique product features
helps the seller segment markets gives the seller the opportunity to attract
loyal customers results in more product variety and choice for
consumers
--Brand--Six Levels of Meaning
Attributes Benefits Values
Culture
User
Personality
Brand Equity
No Brand Loyalty(customer will change brands)
No Brand Loyalty(customer will change brands)
Satisfied Customer(no reason to change brands)
Satisfied Customer(no reason to change brands)
Satisfied & Switching Cost(incur cost by changing brands)Satisfied & Switching Cost(incur cost by changing brands)
Values the Brand(brand as friend)
Values the Brand(brand as friend)
Devoted to Brand
Devoted to Brand
Brand Equity
High brand equity - competitive advantages: Reduced marketing costs More trade leverage in bargaining with distributors and retailers
because customers expect them to carry the brand Charging a higher price than competitors because the brand has
higher perceived quality More easily launch extensions because the brand name carries
high credibility Offers the company some defense against price competition
A brand needs to be carefully managed so that its equity doesn’t depreciate.
Brand-equity managers
Branding
Brand building tools Public relations and
press releases Sponsorships Clubs and consumer
communities Factory visits Trade shows Event marketing
Public facilities Social cause
marketing High value for
the money Founder’s or a
celebrity personality Mobile phone
marketing
Major Branding Decisions
Brand-SponsorDecision
• Manufac-turer brand
• Distribu-tor (private)
brand
• Licensedbrand
Brand-SponsorDecision
• Manufac-turer brand
• Distribu-tor (private)
brand
• Licensedbrand
Brand-Name
Decision
• Individualbranding
• Blanketfamilyname
• SeparatefamilyNames
• Company-individual
names
Brand-Name
Decision
• Individualbranding
• Blanketfamilyname
• SeparatefamilyNames
• Company-individual
names
Brand-StrategyDecision
• Lineextension
• Brandextension
• Multi-brands
• NewBrands
•Co-brands
Brand-StrategyDecision
• Lineextension
• Brandextension
• Multi-brands
• NewBrands
•Co-brands
Brand-Positio-ning
Decision
• Reposi-tioning
• Noreposi-tioning
Brand-Positio-ning
Decision
• Reposi-tioning
• Noreposi-tioning
• Brand
• No brand
• Brand
• No brand
BrandingDecision
Brand Sponsorship
Manufacturer’s brands Also called national brands
(e.g., Dogus Cay, Glade …)
Private brands Also called store or distributor brands
(e.g., Migros, Carrefour, …)
Licensed brands (Ferrari hats, Disney toys, Mc Donald's toys)
Brand Name Decisions
Individual names (e.g. Unilever: Omo, Cif)
Blanket family names (e.g. Arçelik, Bosch, Pınar)
Separate family names for all products (e.g.Sears: Kenmore for appliances, Craftsman for tools,
Homart for home installations) Company trade name combined with
individual product names (e.g.Kellog’s Corn Flakes,Eti Crax, Ülker Cici Bebe)
Good Brand Names
SuggestProductBenefits
Distinctive
Lack PoorForeign
LanguageMeanings
SuggestProductQualities
Easy to:PronounceRecognizeRemember
A Few ExamplesBrand English Translation
Frank Perdue (poultry products)
Slogan: ‘It takes a strong man to make a tender chicken'
Slogan in Spanish: ‘It takes an aroused man to make a chicken affectionate.'
Chevy Nova Name: Nova Name's meaning in Spanish: ‘It doesn't go.'
Schweppes Tonic Water
Name: Schweppes Tonic Water
Name's translation in Italian: ‘Schweppes Toilet Water'
Coors Beer Slogan: ‘Turn it loose' Slogan in Spanish: ‘You will suffer from diarrhea'
Brand Development Strategies
BrandExtension
NewNew
Bra
nd
Nam
e
Product Category
LineExtension
ExistingExisting
ExistingExisting
MultibrandsNewNew NewBrands
Brand Positioning
Can position brands at any of three levels:
Product attributes
Product benefits Beliefs and
values
ServicesServices
Inseparability
Services cannotbe separated
from theirproviders
Inseparability
Services cannotbe separated
from theirproviders
Perishability
Services cannotbe stored for
later sale or use
Perishability
Services cannotbe stored for
later sale or use
Intangibility
Services cannotbe seen, tasted,
felt, heard, orsmelled before
purchase
Intangibility
Services cannotbe seen, tasted,
felt, heard, orsmelled before
purchase
Variability
Quality ofservices dependson who providesthem and when,where, and how
they are delivered
Variability
Quality ofservices dependson who providesthem and when,where, and how
they are delivered
Service CharacteristicsService Characteristics
ServicesServices
Inseparability
“Increaseproductivity of
providers”
Inseparability
“Increaseproductivity of
providers”
Perishability
“Match supplyand demand”
Perishability
“Match supplyand demand”
Intangibility
“Use cues tomake it tangible”
Intangibility
“Use cues tomake it tangible”
Variability
“Standardizeservice
production& delivery”
Variability
“Standardizeservice
production& delivery”
Overcoming Service ChallengesOvercoming Service Challenges
ServicesServices
Satisfied and Loyal
Customers
Satisfied and Loyal
Customers
Greater ServiceValue
Greater ServiceValue
Healthy Service Profits
and Growth
Healthy Service Profits
and Growth
Satisfied and
Productive ServiceEmployees
Satisfied and
Productive ServiceEmployees
Internal Service Quality
Internal Service Quality
The Service-Profit Chain
Three Types of Marketingin Service Industries
Internalmarketing
CompanyCompany
CustomersCustomers
Externalmarketing
EmployeesEmployees Interactivemarketing
Cleaning/maintenance
services
Financial/bankingservices
Restaurantindustry
Services Marketing
External marketing: Traditional marketing via the 4 “P’s”
Internal marketing: Effective training and motivation of customer contact
employees
Interactive marketing: Delivering interactions during the service encounter that
are satisfying to the buyer
Marketing Strategies for Service Firms
Managing Service Differentiation Develop differentiated offer, delivery and image.
Managing Service Quality Become “Customer obsessed”, Develop high service quality standards, have good service recovery, Empower front-line employees.
Managing Service Productivity Train current or new employees better, Work on quality as well as quantity, Utilize technology.