Chapter 11: Product, Branding, and Packaging Decisions

Products
Anything that is of value to a consumer and can be offered through a voluntary marketing exchange.
-Tangible
-Separable (Production/Consumption)
-Less Variable
-Less Perishable
Core Customers Value
The basic-problem solving benefits that consumers are seeking. (What are the customers looking for?)
Actual Product
The physical attributes of a product including and brand names, feature/design, quality level, and packaging. (Customers can choose from three different fits–pro, performance, and touring)
Associated services
(Also called Augmented product) The non-physical attributes of the product including product warranties, financing, product services, and after-sales service.
Example: GM OnStar
Consumer products
Products and services used by people for their personal use. Marketers further classify consumer products by the way they are used and how they are purchased.
Specialty products/services
Products or services towards which the customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers.
Example: Doctors, sports, equipment; consumers expend lots of efforts.
Shopping products/services
Those for which consumers will spend time comparing alternatives, such as apparels, fragrances, and appliances.
Example: Clothes, travel; consumers expend effort in search, compare.
Convenience products/services
Those for which the consumer is not willing to spend ant effort evaluate prior to purchase.
Example: Milk and detergent; consumers expend little effort searching, little effort choosing.
Unsought products/services
Products or services consumers either do not normally think of buying or do not know about.
Example: Ice Tea Beer, Swiffer; consumers don’t know/don’t need the products. Lots of marketing effort required!
Product mix
Complete set of all products and services offered by a firm. Example: General motors (Cadillac, Chevy, Hummers)
Product lines
Groups of associated product/services offered by a company. Example: Kellogg’s, GM, Coca-Cola
Breadth
Number of product lines (ex: Procter and Gamble)
Depth
Number of products within a product line (ex: Ben and Jerry ice creams)
Change Product Mix Breath
Increase breadth (capture new markets) Ex: Opel Car/Hummers. Breath (changing market conditions)
Too much breadth in the product mix becomes costly to maintain and too many brands may weaken the firm’s reputation.
Change Product Mix Depth
Increase depth (changing consumer preference) Ex: Starbucks created a “Blondie” roast/light coffee. (pre-empt competition/boost sales)
Decrease depth (changing market conditions) Ex: coke with vanilla
Decrease Depth
Time to time. It necessary to delete products within a product line to realign the firm’s resources. (Example: Tide Basic was cheaper than Tide Regular brand–they took it out of the market because it was undermined its brand)
Decrease Breadth
Sometimes, it is necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities. (e.g., the firm drops their line of bread and focuses their attention on their dairy products)
Branding
Value. It provides a way for a firm to differentiate its product offerings from those of its competitors.
Brands Facilitate Purchases
Easily recognized by consumers, and because they signify a certain quality level and contain familiar attributes, brands help consumers make quick decisions, especially about their purchases. Brands convey information (eg, quality–cost)
Brands simplify decisions process.
Brands Establish Loyalty
Consumers trust brands (eg, quality)
Brands signal identity (ex: Polo–preppy/CAT–rugged)
Loyalty reduces price sensitivity.
Brand Protect from Competition and Price Competition
Brands are more established in the market and have a more loyal customer base, neither competitive pressures on price nor retail-level competition is as threatening to the firm. (Lacoste–golf shirts/superior quality/status among its user)
Brand are Assets
Brands are also assets that can be legally protected through trademarks and copyrights and thus constitute a unique form of ownership. It gives the potential for brand dilution.
Brands Impact Market Value
Direct impact on the company’s bottom line. The value of a company is its overall monetary worth, comprising a vast number of assets. Recognition
Brand Loyalty
Brands Convey information
Brand equity
The set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.
The value of the brand (assets minus liabilities)
Brand awareness
Measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm’s communications to consumers.
Example: Fox–motor cross and the U from the University of Miami (some people don’t know what it is)
Perceived value
Cost vs. benefit of brand. The relationship between a product’s or service’s benefits and its cost.
Example: BBQ sauce and the cost of it. Cars: different type of cars.
Brand associations
Reflect the mental links that consumers make between a brand and its key product attributes, such as logo, slogans, or famous personality. What are the brand’s ket attributes?
“Brand personality” example: CAT –rugged | Porsche –luxury
Brand loyalty
Consumers repeated choice of the same brand versus other brands. NOT just repeat purchases. Positive word of mouth.
Loyal customers: less price sensitive, easier to sell to, influence others
Branding Strategies
A variety of brand-related strategies to create and manage key brand assets, such as the decision to own the brands, establishing a branding policy, extending the brand name to other products and markets, cooperatively using the brand name with that of another firm, and licensing the brand to other firms.
Private-Label Brands
Family Brands
Exclusive Co-Brands
Manufacturer brands
Brands owned and managed by the manufacturer. (as known as national brands) Example: Coca-Cola, Sony, Nike
Private-Label brands
Known as retailer/store brands. Generic Brands, copycats brands, premium brands. Manufacturers are more willing to accommodate the needs of retailers to develop a special version of its standard merchandise offering to be sold exclusively by the retailers.
Example: Wal-Mart: Great Value: Twist and Shout cookies. The same as Oreos. CVS: cough drops are the same as Hauls
Family Brand
Its own corporate name to brand all its product lines and products so Kellogg’s incorporates the company name into the brand name of Kellogg’s Rice Krispies. They also have Special K, Foot Loops, etc.
Example: Coors Beer like Coors Light, Coors Light Iced T, etc.
Individual brand
The use of individual brand names for each of a firm’s product. To keep individual identities not readily seen as being under the same umbrella.
Exclusive Co-Brands
Hand and products lines
Brand Extension
The use of the same brand name in a different product line. The line extension enhance depth. It is an increase in the product mix’s breadth.
Example: CAT extended to shoes.
Line extension
The use the same brand name within the same product line and represents an increase in a product line’s depth.
Example: Kellogg’s Eggo Syrup was a natural extension to its product line of breakfast foods.
Brand dilution
When the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold. It hurts the brand equity.
Example: Cheetos Lip Balm (gross), Cadillac extension that failed, Lifesavers Soda line
Co-branding
The practice of marketing two or more brands together, on the same package, promotion, or store. It can enhance consumers’ perceptions of the product quality by signaling “unobservable” product quality through links between the firm’s brand and a well-known quality brand. Its designed to appeal to diverse market segments.
Successful when brands are congruent and target same customers.
oFord F150: They are very similar to Harvey Davis.
Unsuccessful when brands do not match. Ex: Snoopy car with Ford.
Brand Licensing
Manufacturers pay a licensing fee to sell a branded product. (brand name, logo, symbols, and/or characters)
EXAMPLE: Disney-give a fee for people to use their band.
Brand Repositioning
Also, known as rebranding. Marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences. (new market and new emphasis)
Example: Radio Shack-old and new (high quality)
Packaging
It needs to be consistent with brand image.
Primary package
The one the consumer uses, such as the toothpaste tub. What’s around the product (normally in bottles)
Secondary package
The wrapper or exterior carton the contains the primary package and provides the UPC label used by retail scanners. The boxed objects (Tylenol/CVS bottle)
Product’s packaging and labeling strategy
Help sell the product and facilitate its use. Labels have become increasingly important to consumers because they supply important safety, nutritional, and product usage information,