Marketing Mix The 1st P: Product Product and Brand (Kolter and Keller Ch 10 and 12)

Kotler on Marketing The best way to hold customers is to constantly figure out how to give them more for less.

What Is a Product? Types of Products activities/ events persons/ Ideas goods/service activities/ events persons/ organization Ideas Definition of product： Anything that can provide consumer needs or benefits

Examples of Products Goods/service Persons/organizations

Examples of Products Activities/events Ideas/information

The Product and the Product Mix Figure 14.1: Components of the Market Offering Product Physical goods Services Experiences Events Persons Places Properties Organizations Information Ideas

Product ...anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need …everything, both favourable and unfavourable, tangible or intangible, received in an exchange Dibb et al (2001:49)

Product levels Augmented Customer communication Actual Delivery Brand Quality After sales service Core solution Features Packaging Personnel Design Capabilities Warranty Product Performance

The Product and the Product Mix Figure 12.2: Five Product Levels Product levels Customer value hierarchy Core benefit Basic product Expected product Augmented product

Example of Product Levels Quality of call (clear and stable) Text messages, emails, games Core benefit Basic product Wireless use Size like a piece of paper Augmented product Lower radiation than other brands Expected product Able to receive and make phone calls Potential product Dynamic

BabyCenter is not just an online merchant, it’s a metamediary

The Product and the Product Mix Consumption system Potential product Product hierarchy Need family Product family Product class Product line Product type Item General Mills’ Mycereal.com Web site

The Product and the Product Mix Product system Product mix Product classifications Durability and Tangibility Classification: Nondurable goods Durable goods Services

The Product and the Product Mix Consumer-Goods Classification: Convenience goods Staples Impulse goods Emergency goods Shopping goods Homogeneous shopping goods Heterogeneous shopping goods Specialty goods Unsought goods

Classifying products Convenience goods Shopping goods Specialty goods Unsought goods

Product classification is not only based on product categories but also on individuals and purchase motivations. EX: chocolates Unsought goods woman on diet Shopping good: for a little girl on her birthday

The Product and the Product Mix Industrial-Goods Classification Materials and parts Farm products Natural products Manufactured materials and parts Component materials Component parts Capital items Installations Equipment

The Product and the Product Mix Supplies and business services Maintenance and repair items Operating supplies Maintenance and repair services Business advisory services

The Product and the Product Mix Product mix (Product assortment) Product mix has a certain: Width Length Depth Consistency

See text for complete table Table 12.1: Product-Mix Width and Product-Line Length for Proctor& Gamble Products PRODUCT-LINE LENGTH Product-Mix Width Detergents Toothpaste Disposable 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) See text for complete table

Above case: Proctor& Gamble Products (p. 353-354) Width (different product lines) = 5 Length: Total number of items in the mix = 20 Average length across lines: 20/5 = 4 Depth: (for a particular product line) Crest comes in three sizes and two formulations = 3 X 2 = 6 Consistency: medium (consumer goods but perform different functions for the buyers)

The Product and the Product Mix Product-line length Line Stretching Downmarket Stretch The company may notice strong growth opportunities as mass retailers attract a growing number of shoppers The company may wish to tie up lower-end competitors who might otherwise try to move upmarket The company may find that the middle market is stagnating or declining Upmarket Stretch Two-Way Stretch

Product-line Length Line Stretching Upward stretch Downward stretch Higher price, higher quality products Existing product lines Downward stretch Lower price, lower quality products

Example of Line Stretching Product-line Length Example of Line Stretching Star product Stretch product line lengths of “Tomato” Stretch product line of “fresh” 「鮮採」

Brand Meaning of a Brand = + Brand Brand name Brand mark Register brand: trademark Brand Brand name Brand mark = +

Brand... …a name, term, symbol or combination which identifies, differentiates, and adds value

The brand exists mainly by virtue of a continuous process whereby the values and expectations imbued in the brand object (product or service) are set and enacted by the firm’s staff and interpreted and redefined by the consumers... brand firm’s activities consumers’ perceptions de Chernatony and Dall’Olmo Riley (1998) ”Defining a ‘brand’: beyond the literature with experts’ interpretations”, Journal of Marketing Management, 14, p 428)

Four Dimensions of Brand The most important weapon; it represents a corporation’s culture AFBP Asus laptop Attributes Functions Benefits Personalities Different functions Black/silver (color) Small size Convenient, elegant, professional Professional use

The Product and the Product Mix Commonly used research approaches to determine brand meaning: Word associations: 「瀉立停」、「蟑會滅」 Personifying the brand Laddering up the brand essence Brand essence Laddering up

Brand-Name Decision Four available strategies (Kolter) Individual names Blanket family names Separate family names for all products Corporate name combined with individual product names

Brand-name Strategies P&G ： Olay, Pert, Tide, Crest, Always Definition Pros Cons Use individual names Brands don’t affect each other Multi-markets High costs Can’t share images and reputation Individual brand SONY BMW Single name for family products For a product line Lower marketing costs Reputation share Easily affected by other negative brands Family brand Uni-President instant noodle, milk tea, coffee http://www.uni-president.com/about/1-5.asp Combine company and product name Multi-markets Reputation share Higher costs Easily affected by other negative brands Mixed brand

Brand Sponsors: Manufacturer or Retailer brands? Generic (no brand) Manufacturer Retailer individual overall family line family brand extension a.k.a. own brands private labels distributor’ brand

Brands and Private Labels: A Partnership? Retailers are becoming essential partners in many consumer-product businesses...in the right conditions, supplying private labels offers a profitable way to work with these partners. It can make good economic and strategic sense if: private label is a premium line entry barriers are low company’s brand is not market leader substantial cost economies exist Dunne and Narasimhan (1999), “The New Appeal of Private Labels”, HBR, May-June

Brand Loyalty (Preference) Aaker’s five levels of customer attitude: The customer will change brands, especially for price reasons. No brand loyalty. Customer is satisfied. No reason to change brands. Customer is satisfied and would incur cost by changing brand. Customer values the brand and sees it as a friend. Customer is devoted to the brand.

Higher Brand Equity Competitive advantages of high brand equity: More leverage in bargaining with distributors and retailers because customers expect them to carry the brand Can charge a higher price than its competitors because the brand has higher perceived quality More easily launch extensions because the brand name carries high credibility The brand offers some defense against price competition.

An Overview of Branding Decisions Branding Challenges Branding Decision: To Brand or Not to Brand? Managing Brand Equity An Overview of Branding Decisions

Desirable Qualities for a Brand Name Should suggest something about the product’s benefits Should suggest the product or service category Should suggest concrete, “high imagery” qualities Should be easy to spell, pronounce, recognize, and remember Should be distinctive Should not carry poor meanings in other countries and languages

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

Celebrity Endorsement To stimulate demand for milk, an industry trade group tapped a huge range of celebrities to show off their milk mustaches.

Celebrity Endorsers Omega uses tennis star Anna Kournikova as a celebrity endorser

Discussion Question Nike’s arrangement with Michael Jordan has provided an excellent example of a celebrity endorsement. Can you think of an endorsement campaign that backfired? What did it cost the company in the short term? What, if any, have been the lasting effects?

Packaging Packaging Primary Package Secondary Package Shipping Package Factors which have contributed to the growing use of packaging as a marketing tool Self-Service Consumer affluence Company and brand image Innovation opportunity

Labeling Functions Consumerists have lobbied for: Identification Grading Description Consumerists have lobbied for: Open dating Unit pricing Grade labeling Percentage labeling