Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-1 MANAGING PRODUCTS, SERVICES, AND BRANDS C HAPTER

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1.Explain the product life cycle concept. 2.Identify ways that marketing executives manage a product’s life cycle. 3.Recognize the importance of branding and alternative branding strategies.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-3 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 4.Describe the role of packaging and labeling in the marketing of a product. 5.Recognize how the four Ps framework applies to services.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-4 GATORADE: AN UNQUENCHABLE THIRST FOR COMPETITION

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-5 Gatorade TV Ad What is effective product & brand management?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-6 THE PRODUCT LIFE CYCLE Product Life Cycle  Primary Demand Introduction Stage  Selective Demand  Skimming Pricing Strategy  Penetration Pricing Strategy

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-7 FIGURE 11-1 FIGURE 11-1 How stages of the product life cycle relate to a firm’s marketing objectives and marketing mix actions

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-8 FIGURE 11-2 FIGURE 11-2 Product life cycle for the stand-alone fax machine for business use: 1970–2008

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-9 THE PRODUCT LIFE CYCLE  Repeat Purchasers Growth Stage  Deletion  Harvesting Maturity Stage Decline Stage

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Honda Insight Hybrid Automobile and Casio EXILM Digital Camera What stage of the product life cycle?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide THE PRODUCT LIFE CYCLE  Length of the Product Life Cycle Some Dimensions of the Product Life Cycle  Shape of the Product Life Cycle Generalized Life Cycle High-Learning Product Fashion Product Low-Learning Product Fad

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide FIGURE 11-3 FIGURE 11-3 Alternative product life cycles

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide THE PRODUCT LIFE CYCLE Some Dimensions of the Product Life Cycle  Diffusion of Innovation Innovators Early Adopters Late Majority Early Majority Laggards  The Life Cycle and Consumers

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide FIGURE 11-4 FIGURE 11-4 Five categories and profiles of product adopters

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Concept Check 1. Advertising plays a major role in the __________ stage of the product life cycle, and _____________ plays a major role in maturity. introductory sales promotion

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Concept Check 2. How do high-learning and low-learning products differ? A: A high-learning product requires significant customer education and there is an extended introductory period. A low-learning product requires little customer education because the benefits of purchase are readily understood, resulting in immediate sales.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide MANAGING THE PRODUCT LIFE CYCLE  Product Modification  Market Modification Modifying the Product Modifying the Market Finding New Users Increasing Use Creating New Use Situations

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Milk Processor Education Program What modification strategy?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide MANAGING THE PRODUCT LIFE CYCLE Repositioning the Product  Product Repositioning Trading Up Trading Down Downsizing  Reacting to a Competitor’s Position  Catching a Rising Trend  Changing the Value Offered

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Concept Check 1. What does “creating new use situations” mean in managing a product’s life cycle? A: Finding new uses or applications for an existing product.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Concept Check 2. Explain the difference between trading up and trading down in repositioning. A: Trading up involves adding value to the product (or line) through additional features or higher- quality materials. Trading down involves reducing the number of features, quality, or price, or downsizing—reducing the content of packages without changing package size and maintaining or increasing the package price.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide BRANDING AND BRAND MANAGEMENT Branding Brand Name  Logotype or Logo

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide BRANDING AND BRAND MANAGEMENT Brand Personality and Brand Equity  Brand Personality Brand Personality Brand Licensing  Brand Equity Brand Equity  Creating Brand Equity  Valuing Brand Equity

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide got2b Hair Products and Mambo Fragrances What are their brand personalities?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide FIGURE 11-5 FIGURE 11-5 Customer-based brand equity pyramid

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Hummer Footwear by Roper How does brand licensing create brand equity?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide BRANDING AND BRAND MANAGEMENT Picking a Good Brand Name  Suggest the Product Benefits  Be Memorable, Distinctive, and Positive  Fit the Company or Product Image  Have No Legal or Regulatory Restrictions  Be Simple and Emotional  International: Be Nonmeaningful

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide BRANDING AND BRAND MANAGEMENT Branding Strategies  Multiproduct Branding (Family/Corporate) Multiproduct Branding (Family/Corporate) Line Extension Subbranding Brand Extension

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide FIGURE 11-6 FIGURE 11-6 Alternative branding strategies

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide BRANDING AND BRAND MANAGEMENT Branding Strategies  Multibranding Multibranding  Private Branding (Private Labeling/Reseller) Fighting Brands  Mixed Branding

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Black & Decker and DeWalt Tools What is each firm’s branding strategy and why?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Packaging Label CREATING CUSTOMER VALUE THROUGH PACKAGING AND LABELING Communication Benefits Functional Benefits Perceptual Benefits

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide L’eggs Sheer Energy What packaging benefits?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Lay’s Stax and Pringles What packaging benefits?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Celestial Seasonings Tea What packaging benefits?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide  Exclusivity  Branding Product (Service) MANAGING THE MARKETING OF SERVICES  Capacity Management Capacity Management

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide McDonald’s Why is a logo an important aspect of branding?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Pricing MANAGING THE MARKETING OF SERVICES  Off-Peak Pricing Off-Peak Pricing Place (Distribution) Promotion

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide United States Postal Service Why do service organizations advertise?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Concept Check 1. What is the difference between a line extension and a brand extension? A: A line extension is the practice of using a current brand name to enter a new market segment in its product class. A brand extension is the practice of using a current brand name to enter a completely different product class.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Concept Check A: A package’s color, shape, and graphics can connote status, economy, and product quality. 2. Explain the role of packaging in terms of perception.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Concept Check 3. How do service businesses use off- peak pricing? A: Service businesses charge different prices during different times of the day or days of the week to reflect variations in demand for the service.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide BRAND NEWS YOU CAN USE GOING ONLINE

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Visit the brandchannel.com website. Pick a brand appearing in Chapter 11 and find a feature or debate pertaining to it either in the archives or from the current page. Summarize the views expressed in brandchannel.com. Going Online

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Going Online 2. Click the “papers” icon and read a paper on a topic covered in Chapter 11. Compare and contrast the views in this paper with the coverage found in the chapter.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide PHILADEPHIA PHILLIES, INC.: SPORTS MARKETING 101 VIDEO CASE 11

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide VIDEO CASE 11 Philadelphia Phillies

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide TABLE 1 TABLE 1 Sources of revenues for the Philadelphia Phillies VIDEO CASE 11 Philadelphia Phillies

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide VIDEO CASE 11 Philadelphia Phillies 1. (a) What is the “product” that the Phillies market? (b) What “products” are the Phillies careful not to market?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide VIDEO CASE 11 Philadelphia Phillies 2. How does the “quality” dimension in marketing the Philadelphia Phillies differ from that in marketing a consumer product such as a breakfast cereal or cake mix?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide VIDEO CASE 11 Philadelphia Phillies 3. When David Montgomery talks about reducing the “inventory of seats” in the new versus old stadium, what does he recognize as (a) advantages and (b) disadvantages?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide VIDEO CASE 11 Philadelphia Phillies 4. Considering all five elements of the promotional mix (advertising, personal selling, public relations, sales promotion, and direct marketing), what specific promotional activities should the Phillies use? Which should be used off-season? On-season?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide VIDEO CASE 11 Philadelphia Phillies 5. What kind of special promotion gift days (with premiums) and event days (no premiums) can the Phillies use to increase attendance by targeting these segments: (a) 14 and under, (b) 15 and over, (c) other special fan segments, and (d) all fans?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide DVD PLAYERS FOLLOW THE CLASSIC PRODUCT LIFE CYCLE SUPPLEMENTAL LECTURE NOTE 11-1

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide FIGURE 11-A FIGURE 11-A DVD player product life cycle

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide ASSESSING SERVICE QUALITY SUPPLEMENTAL LECTURE NOTE 11-2

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide FIGURE 11-B FIGURE 11-B Dimensions of service quality

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide CUSTOMER CONTACT AUDITS SUPPLEMENTAL LECTURE NOTE 11-3

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide FIGURE 11-C FIGURE 11-C Customer contact audit for a car rental (green shaded boxes indicate customer activity)

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide MANAGING THE PRODUCT LIFE CYCLE IN-CLASS ACTIVITY 11-1

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide ACT II Butter Lover’s Microwave Popcorn

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-62

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide ACT II Microwave Popcorn (The Classics)

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide ACT II Microwave Popcorn (Special Features)

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide ACT II Microwave Popcorn (Other)

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide USING BRAINSTORMING AND N/3 TECHNIQUES FOR BREATHE RIGHT ® STRIPS IN-CLASS ACTIVITY 11-2

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Breathe Right Strip CNSBreathe Right

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Breathe Right Strip Instructions

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-69

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-70

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Breathe Right Strips Brand Personality Print Ads

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Breathe Right Strips NYC Marathon Specialty Strip and Print Ad

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Breathe Right Strips Newspaper Free-Standing Insert (FSI) Ad

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Breathe Right Strips Back-in-the-Sack TV Ad

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Breathe Right Strips Snore Relief Throat Spray TV Ad

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Breathe Right Strips Kids TV Ad

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide CUSTOMER CONTACT AUDIT FOR A SERVICE IN-CLASS ACTIVITY 11-3

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide FIGURE 11-D FIGURE 11-D Customer contact audit for Hertz Car Rental (green boxes show customer activity; orange ones show employee activity)

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-79

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Product Life Cycle The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Branding Branding is a basic decision in marketing products in which an organization uses a name, phrase, design, or symbols, or combination of these to identify its products and distinguish them from those of competitors.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Brand Name A brand name is any word, device (design, shape, sound, or color), or combination of these used to distinguish a seller’s goods or services.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Brand Personality A brand personality is a set of human characteristics associated with a brand name.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Brand Equity Brand equity is the added value a given brand name gives to a product beyond the functional benefits provided.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Multiproduct Branding Multiproduct branding is a branding strategy in which a company uses one name for all its products in a product class.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Multibranding Multibranding is a branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Packaging Packaging is a component of a product that refers to any container in which it is offered for sale and on which label information is conveyed.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Capacity Management Capacity management involves integrating the service component of the marketing mix with efforts to influence consumer demand.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide Off-Peak Pricing Off-peak pricing consists of charging different prices during different times of the day or days of the week to reflect variations in demand for the service.