1-Product and Branding Decisions
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Transcript of 1-Product and Branding Decisions
Product, Services, and Product, Services, and Branding StrategyBranding Strategy
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What is a Product?
• Anything that can be offered to a Anything that can be offered to a market for attention, acquisition, market for attention, acquisition, use, or consumption and that might use, or consumption and that might satisfy a want or need.satisfy a want or need.– Includes: physical objects, services, Includes: physical objects, services,
events, persons, places, organizations, events, persons, places, organizations, ideas, or some combination thereof.ideas, or some combination thereof.
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What is a Product?
• Product and Service Product and Service ClassificationsClassifications– Consumer productsConsumer products– Industrial productsIndustrial products
• Materials and partsMaterials and parts
• Capital itemsCapital items
• Supplies and servicesSupplies and services
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Consumer Products
• Products and Products and services bought services bought by final by final consumers for consumers for personal personal consumption.consumption.
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Convenience Products
•Purchased frequently and immediately
• Low priced
• Mass advertising
• Many purchase locations– Examples: candy, soda, newspapers
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Shopping Products
•Bought less frequently
• Higher price
• Fewer purchase locations
• Comparison shop – Examples: furniture, clothing, cars,
appliances
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Specialty Products
•Special purchase efforts
• High price
• Unique characteristics
• Brand identification
• Few purchase locations– Examples: Lamborghini, Rolex Watch
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Unsought Products
•New innovations
•Products consumers do not want to think about
•Require much advertising and personal selling
•Examples: life insurance, cemetery plots, blood donation
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Industrial Products
• Those purchased Those purchased for further for further processing or for processing or for use in conducting use in conducting business.business.
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Supplies and Services Operating supplies, repair,
and maintenance items
Supplies and Services Operating 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
Industrial Products
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Product and Service Decisions
• Individual ProductIndividual Product
• Product Line Product Line
• Product MixProduct Mix
• Product attributesProduct attributes– Quality, features, Quality, features,
style and designstyle and design
• BrandingBranding• PackagingPackaging• LabelingLabeling• Product support Product support
servicesservices
Key Key Decisions Decisions
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Product and Service Decisions
• Individual ProductIndividual Product
• Product LineProduct Line
• Product MixProduct Mix
• Product line lengthProduct line length– Line stretching:Line stretching: adding adding
products that are products that are higher or lower priced higher or lower priced than the existing linethan the existing line
– Line filling:Line filling: adding adding more items within the more items within the present price rangepresent price range
Key Key Decisions Decisions
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Product and Service Decisions
• Individual ProductIndividual Product
• Product Line Product Line
• Product MixProduct Mix
• Product line width:Product line width:– number of different number of different
product lines carried by product lines carried by companycompany
• Product line depth:Product line depth:– Number of different Number of different
versions of each versions of each product in the lineproduct in the line
• Product line Product line consistencyconsistency
Key Key Decisions Decisions
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Levels of a Product
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• Product Decisions and Social Product Decisions and Social ResponsibilityResponsibility– Acquisitions and mergersAcquisitions and mergers– Legal complianceLegal compliance– Product liability issuesProduct liability issues– WarrantiesWarranties
Additional Product Considerations
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Product Mix Decisions
• Product MixProduct Mix: all of the product lines and : all of the product lines and items that a particular seller offers for items that a particular seller offers for sale.sale.
• WidthWidth: the number of different product : the number of different product lines the company carries.lines the company carries.
• DepthDepth: the number of versions offered of : the number of versions offered of each product in the line.each product in the line.
• ConsistencyConsistency: how closely related the : how closely related the various lines are.various lines are.
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Individual Product Decisions
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Packaging
•Designing and producing the Designing and producing the container or wrapper for a container or wrapper for a product.product.
•Developing a good package:Developing a good package:– Packaging conceptPackaging concept– Package elementsPackage elements– Product safetyProduct safety– Environmental concernsEnvironmental concerns
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Labeling
•Printed information appearing on Printed information appearing on or with the package.or with the package.
•Performs several functions:Performs several functions:– IdentifiesIdentifies product or brand product or brand– DescribesDescribes several things about the several things about the
productproduct– PromotesPromotes the product through the product through
attractive graphicsattractive graphics
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Branding
• Creating, maintaining, protecting, Creating, maintaining, protecting, and enhancing products and and enhancing products and services.services.
• A brand is a name, term, sign, A brand is a name, term, sign, symbol, or design, or a combination symbol, or design, or a combination of these, that identifies the maker or of these, that identifies the maker or seller of a product or service.seller of a product or service.
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Branding
• Advantages to buyers:Advantages to buyers:– Product identificationProduct identification– Product qualityProduct quality
• Advantages to sellers:Advantages to sellers:– Basis for product’s quality storyBasis for product’s quality story– Provides legal protectionProvides legal protection– Helps to segment marketsHelps to segment markets
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Branding Strategy
• Brands are powerful assets that Brands are powerful assets that must be carefully developed / must be carefully developed / managed.managed.
• Brands with strong equity have Brands with strong equity have many competitive advantages:many competitive advantages:– High consumer awareness High consumer awareness – Strong brand loyaltyStrong brand loyalty– Helps when introducing new productsHelps when introducing new products– Less susceptible to price competitionLess susceptible to price competition
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Brand Strategy
• Brand PositioningBrand Positioning
• Brand Name Brand Name Selection Selection
• Brand Brand SponsorshipSponsorship
• Brand Brand DevelopmentDevelopment
• Three levels of Three levels of positioning:positioning:– Product attributesProduct attributes
• Least effectiveLeast effective
– BenefitsBenefits– Beliefs and valuesBeliefs and values
• Taps into emotionsTaps into emotions
Key Key Decisions Decisions
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Brand Strategy
• Brand PositioningBrand Positioning
• Brand Name Brand Name SelectionSelection
• Brand Brand SponsorshipSponsorship
• Brand Brand DevelopmentDevelopment
• Good Brand Names:Good Brand Names:– Suggest something Suggest something
about the product or its about the product or its benefitsbenefits
– Are easy to say, Are easy to say, recognize and recognize and rememberremember
– Are distinctiveAre distinctive– Are extendableAre extendable– Translate well into Translate well into
other languagesother languages– Can be registered and Can be registered and
legally protectedlegally protected
Key Key Decisions Decisions
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Brand Strategy
• Brand PositioningBrand Positioning
• Brand Name Brand Name Selection Selection
• Brand Brand SponsorshipSponsorship
• Brand Brand DevelopmentDevelopment
• Manufacturer brandsManufacturer brands
• Private (store) brandsPrivate (store) brands– Costly to establish and Costly to establish and
promotepromote– Higher profit marginsHigher profit margins
• Licensed brandsLicensed brands– Name and character Name and character
licensing has grownlicensing has grown
• Co-brandingCo-branding– Advantages / Advantages /
disadvantagesdisadvantages
Key Key Decisions Decisions
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Brand Strategy
• Brand PositioningBrand Positioning
• Brand Name Brand Name Selection Selection
• Brand Brand SponsorshipSponsorship
• Brand Brand DevelopmentDevelopment
• Line extensionsLine extensions– Minor changes to Minor changes to
existing productsexisting products
• Brand extensionsBrand extensions– Successful brand Successful brand
names help introduce names help introduce new productsnew products
• MultibrandsMultibrands– Multiple product entries Multiple product entries
in a product categoryin a product category
• New brandsNew brands– New product categoryNew product category
Key Key Decisions Decisions
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Brand Equity
• The positive differential effect that The positive differential effect that knowing the brand name has on knowing the brand name has on customer response to the product or customer response to the product or service.service.
• Provides:Provides:– More brand awareness and loyaltyMore brand awareness and loyalty– Basis for strong, profitable customer Basis for strong, profitable customer
relationshipsrelationships
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Brand Positioning
• Can position brands at any of three levels.Can position brands at any of three levels.
Product Attributes
Product Benefits
Beliefs and Values
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Brand Name Selection
• Desirable qualities for a brand name Desirable qualities for a brand name include:include:
1.1. It should suggest product’s benefits and It should suggest product’s benefits and qualitiesqualities
2.2. It should be easy to pronounce, recognize, and It should be easy to pronounce, recognize, and rememberremember
3.3. It should be distinctiveIt should be distinctive
4.4. It should be extendableIt should be extendable
5.5. It should translate easily into foreign languagesIt should translate easily into foreign languages
6.6. It should be capable of registration and legal It should be capable of registration and legal protectionprotection
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Brand Sponsorship
Four OptionsCo-Branding PrivateBrands
Manufacturer’s Brands
Licensed Brands
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Line Extensions
Morton sells an entire line of salts and seasonings for every occasion.
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Brand Development
• Line ExtensionLine Extension: introduction of : introduction of additional items in a given product additional items in a given product category under the same brand category under the same brand name (e.g., new flavors, forms, name (e.g., new flavors, forms, colors, ingredients, or package colors, ingredients, or package sizes).sizes).
• Brand ExtensionBrand Extension: using a successful : using a successful brand name to launch a new or brand name to launch a new or modified product in a new category.modified product in a new category.
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Brand Development
• MultibrandingMultibranding: offers a way to : offers a way to establish different features and establish different features and appeal to different buying motives.appeal to different buying motives.
• New BrandsNew Brands: developed based on : developed based on belief that the power of its existing belief that the power of its existing brand is waning and a new brand brand is waning and a new brand name is needed. Also used for name is needed. Also used for products in new product category.products in new product category.
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Services Marketing
• ServicesServices– Account for 70%of India gross Account for 70%of India gross
domestic product.domestic product.– Service industries include business Service industries include business
organizations, government, and organizations, government, and private not-for-profit organizations.private not-for-profit organizations.
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Services Marketing
• Characteristics of ServicesCharacteristics of Services– IntangibilityIntangibility
• Consumers look for service quality signalsConsumers look for service quality signals
– InseparabilityInseparability• Services can’t be separated from providersServices can’t be separated from providers
– VariabilityVariability• Employees and other factors result in variabilityEmployees and other factors result in variability
– PerishabilityPerishability• Services can’t be inventoried for later saleServices can’t be inventoried for later sale
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What is a Service?
• A form of product that consists of A form of product that consists of activities, benefits, or satisfactions activities, benefits, or satisfactions offered for sale that are essentially offered for sale that are essentially intangible and do not result in the intangible and do not result in the ownership of anything.ownership of anything.– Examples: banking, hotel, airline, retail, Examples: banking, hotel, airline, retail,
tax preparation, home repairs.tax preparation, home repairs.
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The Product-Service Continuum
Sugar Restaurant College Education
Pure Tangible Good
Pure Service
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Other Market Offerings
• Organizations: Profit (businesses) and Organizations: Profit (businesses) and nonprofit (schools and churches).nonprofit (schools and churches).
• Persons: Politicians, entertainers, sports Persons: Politicians, entertainers, sports figures, doctors, and lawyers.figures, doctors, and lawyers.
• Places: create, maintain, or change Places: create, maintain, or change attitudes or behavior toward particular attitudes or behavior toward particular places (e.g., tourism).places (e.g., tourism).
• Ideas (social marketing): Public health Ideas (social marketing): Public health campaigns, environmental campaigns, campaigns, environmental campaigns, family planning, or human rights.family planning, or human rights.
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Product and Service Attributes
Quality Quality
FeaturesFeatures
Style & DesignStyle & Design
Performance and Satisfaction Includes Level & ConsistencyPerformance and Satisfaction Includes Level & Consistency
Differentiates a product from the competition; assessed based on
value and cost
Differentiates a product from the competition; assessed based on
value and cost
Style = AppearanceDesign = heart of the product
Style = AppearanceDesign = heart of the product
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Nature and Characteristics of a Service
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The Service-Profit Chain
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Major Service Marketing Tasks
• Managing Service Differentiation:Managing Service Differentiation:– Develop a differentiated offer, delivery, and Develop a differentiated offer, delivery, and
image.image.
• Managing Service Quality:Managing Service Quality:– Be customer obsessed, set high service quality Be customer obsessed, set high service quality
standards, have good service recovery, standards, have good service recovery, empower front-line employees.empower front-line employees.
• Managing Service Productivity:Managing Service Productivity:– Train current employees or hire new ones, Train current employees or hire new ones,
increase quantity and sacrifice quality, harness increase quantity and sacrifice quality, harness technology.technology.
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THANK YOUTHANK YOU