©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 0 in Chapter 11 Chapter 11 Setting Product and Brand Strategy PowerPoint by Karen E. James Louisiana State University - Shreveport

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 1 in Chapter 11 Objectives  Identify the various characteristics of products.  Learn how companies build and manage product lines and mixes.  Understand how companies make better brand decisions.  Comprehend how packaging and labeling can be used as marketing tools.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 2 in Chapter 11 What is a Product?  Goods  Services  Experiences  Events  Persons  Places  Properties  Organizations  Information  Ideas

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 3 in Chapter 11 The Product and Product Mix  Potential customers judge product offerings according to three elements: –Product features and quality –Services mix and quality –Value-based prices

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 4 in Chapter 11 The Product and Product Mix  The customer value hierarchy: –Core benefit –Basic product –Expected product –Augmented product –Potential product

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 5 in Chapter 11 The Product and Product Mix Product Classifications  Durability and tangibility  Consumer goods  Industrial goods  Nondurable –Tangible –Rapidly consumed –Example: Milk  Durable –Tangible –Lasts a long time –Example: Oven  Services –Intangible –Example: Tax preparation

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 6 in Chapter 11 The Product and Product Mix Product Classifications  Durability and tangibility  Consumer goods  Industrial goods  Classified by shopping habits: –Convenience goods –Shopping goods –Specialty goods –Unsought goods

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 7 in Chapter 11 The Product and Product Mix Product Classifications  Durability and tangibility  Consumer goods  Industrial goods  Materials and parts –Farm products –Natural products –Component materials –Component parts  Capital items –Installations –Equipment  Supplies and business services –Maintenance and repair –Advisory services

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 8 in Chapter 11 The Product and Product Mix  Product mix dimensions: –Width: number of product lines –Length: total number of items in mix –Depth: number of product variants –Consistency: degree to which product lines are related

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 9 in Chapter 11 Product-Line Decisions  Product-Line Analysis  Product-Line Length  Product-Line Modernization, Featuring, and Pruning

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 10 in Chapter 11 Brand Decisions  The AMA definition of a brand: “A name, term, sign, symbol, or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from the competition.”

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 11 in Chapter 11 Brand Decisions  Brands can convey six levels of meaning: –Attributes –Benefits –Values –Culture –Personality –User

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 12 in Chapter 11 Brand Decisions  Brand identity decisions include: –Name –Logo –Colors –Tagline –Symbol  Consumer experiences create brand bonding, brand advertising does not.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 13 in Chapter 11 Brand Decisions  Marketers should attempt to create or facilitate awareness, acceptability, preference, and loyalty among consumers.  Valuable and powerful brands enjoy high levels of brand loyalty.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 14 in Chapter 11 Brand Decisions  Aaker identified five levels of customer attitudes toward brands: –Will change brands, especially for price. No brand loyalty. –Satisfied -- has no reason to change. –Satisfied -- switching would incur costs. –Values brand, sees it as a friend. –Devoted to the brand.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 15 in Chapter 11 Brand Decisions  Brand equity refers to the positive differential effect that a brand name has on customers.  Brand equity: –is related to many factors. –allows for reduced marketing costs. –is a major contributor to customer equity.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 16 in Chapter 11 Brand Decisions Key Challenges  To brand or not  Brand sponsor  Brand name  Brand strategy  Brand repositioning  Advantages of branding: –Facilitates order processing –Trademark protection –Aids in segmentation –Enhances corporate image –Branded goods are desired by retailers and distributors

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 17 in Chapter 11 Brand Decisions Key Challenges  To brand or not  Brand sponsor  Brand name  Brand strategy  Brand repositioning  Options include: –Manufacturer (national) brand –Distributor (reseller, store, house, private) brand –Licensing the brand name

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 18 in Chapter 11 Brand Decisions Key Challenges  To brand or not  Brand sponsor  Brand name  Brand strategy  Brand repositioning  Strong brand names: –Suggest benefits –Suggest product qualities –Are easy to say, recognize, and remember –Are distinctive –Should not carry poor meanings in other languages

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 19 in Chapter 11 Brand Decisions Key Challenges  To brand or not  Brand sponsor  Brand name  Brand strategy  Brand repositioning  Varies by type of brand –Functional brands –Image brands –Experiential brands  Line extensions  Brand extensions  Multibrands  New brands  Co-branding

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 20 in Chapter 11 Brand Decisions Key Challenges  To brand or not  Brand sponsor  Brand name  Brand strategy  Brand repositioning  A brand report card can be used to audit a brand’s strengths and weaknesses.  Changes in preferences or the presence of a new competitor may indicate a need for brand repositioning.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 21 in Chapter 11 Packaging and Labeling  Packaging includes: –The primary package –The secondary package –The shipping package  Many factors have influenced the increased use of packaging as a marketing tool.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 22 in Chapter 11 Packaging and Labeling  Developing an effective package: –Determine the packaging concept –Determine key package elements –Testing: Engineering tests Visual tests Dealer tests Consumer tests

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 23 in Chapter 11 Packaging and Labeling  Labeling functions: –Identifies the product or brand –May identify product grade –May describe the product –May promote the product  Legal restrictions impact packaging for many products.