Chapter 08 Product, Services, and Brands: Building Customer Value

Topics to Cover Product and Services Decisions Branding Strategy: Building Strong Brands

Product and Service Decisions Product Line Decisions Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

Product and Service Decisions Product Line Decisions Product line length is the number of items in the product line Managers need to Analyze their product lines periodically to assess each product item’s sales and profits Understand how each item contributes to the line’s overall performance

Product and Service Decisions Product Line Decisions A company can expand the product line length in two ways Line stretching Line filling

Product and Service Decisions Product Line Decisions Line stretching Occurs when a company lengthens its product line beyond its current range. Companies can stretch its product line downward, upward or both ways.

Product and Service Decisions Product Line Decisions Line filling Involves adding more items within the present range of the line. Reasons include reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company.

Product and Service Decisions Product Line Decisions The company should ensure that the new items are noticeably different from the existing ones.

Product and Service Decisions Product Mix Decisions Product mix (or Product Portfolio) consists of all the products and items that a particular seller offers for sale

Product and Service Decisions Product Mix Decisions Four important dimensions of Product Mix Width Length Depth Consistency

Product and Service Decisions Product Mix Decisions Width – refers to the number of different product lines the company carries. Length – refers to the total number of items the company carries within its product line.

Product and Service Decisions Product Mix Decisions Depth – refers to the number of versions offered of each product in the product line. Consistency – refers to how closely related the various lines are in end use, production requirements, distribution channels or some other way.

Brand Equity The differential effect that knowing the brand name has on customer’s response to the product or its marketing The measure of the brand’s ability to capture customer preference and loyalty. Branding Strategy: Building Strong Brands

A brand has positive brand equity when consumers react more favorably to it than to generic or unbranded version of the same product. Powerful Brands has High Brand Equity Branding Strategy: Building Strong Brands

Brand represents the consumer’s perceptions and feelings about a product and its performance. It is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers Branding Strategy: Building Strong Brands

Branding poses challenging decisions to the marketers.

Marketers need to position their brands clearly in the minds of consumers. Brand strategy decisions include: Product attributes Product benefits Product beliefs and values Branding Strategy: Building Strong Brands Brand Positioning

Product attributes – At the lowest level – Attributes are least important in this category as competitors can easily copy attributes. – Customers are not interested in the attributes, they are interested in what the attributes can do for them. Branding Strategy: Building Strong Brands Brand Positioning

Product benefits – Better be positioned by associated brand name with the desirable benefit. – Leaving technical benefits and talking about factors like hygiene, health etc. Branding Strategy: Building Strong Brands Brand Positioning

Product beliefs and values – Strongest brands go beyond attribute or benefit positioning – These brands pack an emotional wallop (punch). – Focus on creating surprise, passion and excitement surrounding a brand. Branding Strategy: Building Strong Brands Brand Positioning

When positioning a brand, the marketer should establish – a mission for the brand and – a vision of what the brand must be and do. Branding Strategy: Building Strong Brands Brand Positioning

A brand is the company’s promise to deliver a specific set of features, benefits, services and experiences consistently to the buyers. The brand promise must be simple and honest Branding Strategy: Building Strong Brands Brand Positioning

A good name can add greatly to the product’s success. Finding the best brand name is a difficult task. Naming is a measure of instinct. Branding Strategy: Building Strong Brands Brand Name Selection

Desirable qualities 1.Suggest benefits and qualities 2.Easy to pronounce, recognize, and remember 3.Distinctive 4.Extendable 5.Translatable for the global economy 6.Capable of registration and legal protection Branding Strategy: Building Strong Brands Brand Name Selection

Manufacturer has four sponsorship options. Manufacturer’s brand (National brand). Private brand (Store brand or Distributor brand). Licensed brand Co-brand Branding Strategy: Building Strong Brands Brand Sponsorship

National Brands Vs Store Brands Sony – SonyBravia (National Brand) Wall-Mart (Store Brand) Branding Strategy: Building Strong Brands Brand Sponsorship

Licensing (Licensed brand) – Some companies spend millions to create their own brand while some take the license (by paying a fee) of an established brand which is proven. – Name and character licensing has grown rapidly in the recent years. Branding Strategy: Building Strong Brands Brand Sponsorship

Co-branding – Occurs when two established brand names of different companies are used on the same product. – In most co-branding situations, one company licenses another company’s well known brand to use in combination with its own. Branding Strategy: Building Strong Brands Brand Sponsorship