Part 4 PRODUCT AND PRICE DECISIONS

10: Product, Branding, and Packing Concepts 11: Business Markets and Buying Behavior 12: Developing and Managing Prices 13: Marketing Channels and Supply-Chain Management 14: Retailing, Direct Marketing, and Wholesaling

Chapter 10 Product, Branding, and Packaging Concepts Professor Jason C. H. Chen, Ph.D. School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

Marketing Applications

2. Tabasco pepper sauce is a product that has entered the maturity stage of the product life cycle. Name products that would fit into each of the four stages: introduction, growth, maturity, and decline. Describe each product and explain why it fits in that stage.   A sample answer should include the following explanations for product life cycles: Introduction—a product’s first appearance in the market, when sales start at zero and profits are negative Growth—sales rise rapidly, profits reach a peak, and then they start to decline Maturity—sales curve peaks and starts to decline and profits continue to fall Decline—sales fall rapidly

3. Generally buyers go through a product adoption process before becoming loyal customers. Describe your experience in adopting a product you now use consistently. Did you go through all the stages of the process?   Students’ answers will vary based on their experiences, but they should go through some of the following stages of the product adoption process. Awareness—the buyer becomes aware of the product. Interest—the buyer seeks information and is receptive to learning about the product. Evaluation—the buyer considers the product’s benefits and decides whether to try it. Trial—the buyer examines, tests, or tries the product to determine if it meets his or her needs. Adoption—the buyer purchases the product and can be expected to use it again

8. It is helpful to think of a total product offering as having a combination of three interdependent elements: the core product itself, its supplemental features, and its symbolic or experiential value. For example, Southwest Airlines does not just offer safe passage to your destination (core product). It also offers two free checked bags (supplemental product offerings) and tries to create a fun environment to emphasize its culture of “luv” (experiential product offerings). Use the following matrix to list the core products, supplemental benefits, and experiential benefits for the four different companies.

Supplemental Benefits Experiential Benefits   Core Products Supplemental Benefits Experiential Benefits BMW Starbucks McDonald’s Whole Foods Automobiles BMW car care products The status associated with driving a BMW Privileges associated with using a Starbucks card Standardized service and stylish, inviting stores High-quality coffee beverages Fast food Happy Meals, free Wi-Fi, drive-through facilities Speed of delivery, consistent quality Organic foods Catering and holiday orders Feelings of health and wellness

Internet Exercise Goodyear In addition to providing information about the company’s products, Goodyear’s website helps consumers find the exact products they want and will even direct them to the nearest Goodyear retailer. Visit the Goodyear site at www.goodyear.com.

1. How does Goodyear use its website to communicate information about the quality of its tires?   The Goodyear website provides information on the features and benefits of each tire and allows for side-by-side comparisons for each vehicle. Goodyear also includes a section on every tire page entitled “Why Goodyear is the right choice” that explains the company’s legacy and how tires are manufactured. The company also provides general information including checklists for how to purchase quality tires.

2. How does Goodyear’s website demonstrate product design and features?   Each tire page lists its features and benefits as well as the benefits of buying tires from Goodyear. Goodyear has developed symbols for tire features such as sport performance, fuel-efficiency, or all-weather tires so that consumers know important information at a glance. The website also indicates which tires are recommended for particular vehicles.

3. Based on what you learned at the website, describe what Goodyear has done to position its tires.   In general, Goodyear has positioned itself as a brand that is knowledgeable, cares about consumers, and wants them to buy the best quality tires, and those quality tires are made by Goodyear.

Video Case 10.1 New Belgium Brews up strong Brand Equity

Summary   New Belgium Brewing Company started on a bike trip through Belgium and has become one of the most successful craft breweries in the United States. New Belgium has built its remarkable success on great products, a fun brand image, and a strong commitment to sustainability and quality. This case should help students recognize that even relatively small businesses can build strong brands by staying focused on the firm’s values and philosophies.

1. What has New Belgium Brewing done to increase brand recognition and brand preference?   New Belgium Brewing has used a variety of methods to increase brand recognition and preference. For example, its specially-designed watercolor labels and packaging showcase the brand with a touch of nostalgia and instant recognition. Its sponsorships and philanthropy also increase brand recognition and, through association with causes, help to build brand preference on the basis of a company that cares about people and the planet. In addition, New Belgium Brewing’s advertising and social media activities communicate the brand and what it stands for.

2. How is New Belgium Brewing using packaging to support its brand image?   New Belgium essentially uses a family branding policy in that each beer carries the New Belgium brand name in addition to the product item name. The beer labels are each different (different product name, ingredients, graphic art), but are all similar in appearance and overall design, making it relatively easy to recognize a New Belgium label on a cooler shelf. The nostalgic watercolor images help reinforce the New Belgium brand’s image, reputation for quality, and sense of joy and fun in making and enjoying the product.

3. Assess New Belgium’s brand equity in terms of awareness, quality, associations, and loyalty.   New Belgium Brewing has high brand awareness, thanks to years of word-of-mouth communications by satisfied customers and its various communications campaigns. The company works hard to communicate the high quality of its craft-brewed beers, available only in selected areas. This sets the brand apart from beers that are mass-produced and available in wide distribution. New Belgium Brewing also uses packaging, labeling, communications, and sponsorships to reinforce brand associations with old-fashioned goodness and with good causes, which strengthens the brand. Finally, the company enjoys high brand loyalty and has been able to use this strength to spread the brand message to new customers through new media.