© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin MANAGING PRODUCTS AND BRANDS 11 C HAPTER

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Explain the product life-cycle concept and relate a marketing strategy to each stage. Recognize the differences in product life cycles for various products and their implications for marketing decisions. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Understand alternative approaches to managing a products life cycle. Describe elements of brand personality and brand equity and the criteria for the good brand name. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Explain the rationale for alternative branding strategies employed by companies. Understand the role of packaging, labeling, and warranties in the marketing of a product. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin GATORADE: A THIRST FOR COMPETITION MANAGING PRODUCTS AND BRANDS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Introduction Stage Growth Stage Maturity Stage Decline Stage Deletion Harvesting THE PRODUCT LIFE CYCLE

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Some Dimensions of the Product Life Cycle Length of the Product Life Cycle Shape of the Product Life Cycle THE PRODUCT LIFE CYCLE

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Some Dimensions of the Product Life Cycle (cont) The Product Level: Class and FormClassForm THE PRODUCT LIFE CYCLE

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Some Dimensions of the Product Life Cycle (cont) The Life Cycle and Consumers THE PRODUCT LIFE CYCLE

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 1. Advertising plays a major role in the ___________ stage of the product life cycle and _____ _________ plays a major role in maturity. introductory Concept Check sales promotion

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. How do high learning and low learning products differ? A: High learning products require significant education of the customer and extended introductory stages; low learning products require little learning by the consumer and have short introductory stages.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. What does the life cycle of a fashion product look like? A: It has the four stages, introduction through decline and then seems to return. The length of the cycle may be years.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Role of a Product Manager Modifying the Product Modifying the Market Finding New Users Increasing Use Creating New Use Situation MANAGING THE PRODUCT LIFE CYCLE

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Repositioning the Product Reacting to a Competitor’s Position Reaching a New Market Catching a Rising Trend Changing the Value Offered  Trading up Trading up  Trading down Trading down  Downsizing Downsizing MANAGING THE PRODUCT LIFE CYCLE

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. How does a product manager help manage a product’s life cycle? A: A product manager develops and executes a marketing program for the product.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What does “creating new use situations” mean in managing a product’s life cycle? A: It means finding new uses for an existing product.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. Explain the difference between trading up and trading down in repositioning. A: In trading up, value is added to the product; in trading down, value is lowered.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Branding Brand name Trade name Trademark BRANDING AND BRAND MANAGMENT

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Brand Personality and Brand EquityBrand Personality Brand Equity Creating Brand Equity BRANDING AND BRAND MANAGMENT

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Brand Personality and Brand Equity (cont) Valuing Brand Equity Licensing Picking a Good Brand Name BRANDING AND BRAND MANAGMENT

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Branding Strategies Manufacturer Branding  Multiproduct branding Multiproduct branding BRANDING AND BRAND MANAGMENT

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Manufacturer Branding (cont)  Co-branding Co-branding  Multibranding Multibranding  Eurobranding Eurobranding Private Branding Mixed Branding Generic Branding BRANDING AND BRAND MANAGMENT

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Creating Customer Value Through Packaging and Labeling PackagingLabeling Communication Benefits Functional Benefits Perceptual Benefits PACKAGING AND LABELING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Global Trends in Packaging Environmental Sensitivity Health and Safety Concerns PACKAGING AND LABELING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin  Express warranty  Limited coverage  Full coverage  Implied coverage PRODUCT WARRANTY

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. How does a generic brand differ from a private brand? A: Generic brands have no names, private brands have the name of a wholesaler or retailer.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. Explain the role of packaging in terms of perception. A: A package can connote status, economy, or quality.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. What is the difference between an expressed and an implied warranty? A: Express warranties are written statements of liabilities. Implied warranties assign the manufacturer responsibility for product deficiencies, even if the product is sold by a retailer. These are unwritten.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The stages a new product goes through in the market place: introduction, growth, maturity, and decline. Product Life Cycle

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The entire product category or industry. Product Class

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Variations of a product within the product class. Product Form

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Altering a product’s characteristic, such as its quality, performance, or appearance, to try to increase and extend the product’s sales. Product Modification

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Strategy in which a company tries to find new customers, increase a product’s use among existing customers, or create new use situations. Market Modification

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Adding value to a product (or line) through additional features or higher-quality materials. Trading Up

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Reducing the number of features, quality, or price. Trading Down

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Reducing the content of packages without changing package size and maintaining or increasing the package price. Downsizing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Activity in which an organization uses a name, phrase, design, or symbols, or combination of these to identify its products and distinguish them from competitors. Branding

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Any word, “device” (design, shape, sound, or color), or combination of these used to distinguish a seller’s goods or services. Brand Name

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A commercial, legal name under which a company does business. Trade Name

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use. Trademark

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A set of human characteristics associated with a brand name. Brand Personality

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The added value a given brand name gives to a product beyond the functional benefits provided. Brand Equity

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A contractual agreement whereby a company allows another firm to use its brand name, patent, trade secret, or other property for a royalty or fee. Licensing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The producer dictates the brand name using either a multiproduct or multibranding approach. Manufacturer Branding

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A company uses one name for all products; also called blanket or family branding. Multiproduct Branding

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The pairing of two brand names of two manufacturers on a single product. Co-Branding

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A manufacturer’s branding strategy giving each product a distinct name. Multibranding

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The strategy of using the same brand name for the same product across all countries in the European Union. Euro-Branding

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin When a company manufactures products but sells them under the brand name of a wholesaler or retailer (often called private labeling or reseller branding). Private Branding

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A firm markets products under its own name an that of a reseller because the segment attracted by the reseller is different from its own market. Mixed Branding

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A no-name product with no identification other than a description of contents. Generic Brand

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Any container in which a product is offered for sale and on which label information is communicated. Packaging

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin An integral part of the package that typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients. Label

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A statement indicating the liability of the manufacturer for product deficiencies. Warranty