1. 1 Prepared for: IBM Program – UC PRODUCT AND BRANDING STRATEGY

2. Marketing Process 2

3. Component of Marketing Offering 3 Value-based price Product features & quality Services mix & quality Attractiveness of the market offering

4. PRODUCT 4

5. 5 Prod. Characteristic & Classification Product levels: Customer value hierarchy Service/benefit customers are really buying Turn the core benefit into the basic product Customers’ expectation for a specific product Exceeding customers’ expectation On a specific product All possible augmentation and transformation the prod offering might undergo in the future

6. 6 Product classifications Durability Tangibility User Consumer-Good Industrial-Good Prod. Characteristic & Classification

7. Product Classification [1] Durability & Tangibility Classification: Nondurable goods  Tangible goods normally consumed in one or a few uses.  Ex. Beverage Durable goods  Tangible goods normally survive many uses, and require more personal selling and service.  Ex. Clothe Services (intangible)  Intangible, variable, and perishable products.  Ex. Hair dresser 7

8. 8 Product Classification [2] User Consumer-Goods Classification Convenience goods Purchase frequently, immediately, with a minimum of effort (e.g. beverage) Shopping goods Comparing the alternatives based on suitability, quality, price, and style (e.g. clothe) Specialty goods Unique characteristics or brand identification for which many buyers is willing to make a special purchasing effort (e.g. car – Mercedez) Unsought goods Buyers don ’ t know about or don ’ t normally think of buying (e.g. coffin)

9. Differentiation Being different to attract people’s attention Product Design Service Form: size, shape (e.g. cleo) Feature Performance quality Durability Reliability Reparability Product return (e.g. US and European market) Ordering (e.g. online) Delivery (e.g. domino pizza) Installation (e.g. IKEA) Maintenance & repair Customer training (e.g. GE) Customer consulting

10. 10 Product System & Mix Product mix has a certain: Width  How many different product lines the firm carries Length  Total number of items in the mix Depth  How many variants are offered of each product in the line Consistency  How closely related the various product lines are in end use, production requirements, distribution channels, or some other ways

11. 11 Table 14.1: Product-Mix Width and Product-Line Length for Procter& Gamble Products Product- Line Length Product-Mix Width DetergentsToothpaste Disposable Bar SoapDiapers Paper Tissue Ivory Snow (1930) Dreft (1933) Tide (1946) Cheer (1950) Gleem (1952) Crest (1955) Ivory (1879) Kirk’s (1885) Lava (1893) Camay (1926) Pampers (1961) Luvs (1976) Charmin (1928) Puffs (1960) Banner (1982) Summit (1992) Width = 5 Product Line Depth = 2

12. 12 Product-Line Length Line Stretching Downmarket Stretch Strong growth opportunities as mass retailers attract a growing number of shoppers Tie up lower-end competitors who might otherwise try to move upmarket Find that the middle market is stagnating or declining Upmarket Stretch Enter the high end of the market for more growth, higher margins, or position themselves as full-line manufacturers. Two-Way Stretch Serving the middle market might decide to stretch their line in both directions e.g. Loreal  Maybelline; Teh Botol Sosro  Ice Tea)

13. SERVICE 13

14. Categories of Service Mix Pure tangible good Tooth paste, soap Tangible good with accompanying service Toyota Hybrid Café / restaurant Major service with accompanying minor goods and services Singapore airlines Pure service Massage, beauty salon 14

15. Characteristic of Service Intangibility Inseparability Variability Perishability 15

16. Determination of Service Quality Reliability Firm’s consistency and dependability in service performance Responsiveness Firm’s commitment to provide its services in a timely manner Assurance Firm’s competence, courtesy to its customers, and security of its operations Empathy Firm’s ability to put itself in its customer’s place Tangibles Firm’s ability to manage its tangibles 16

17. BRAND 17

18. BRAND The benefit??? Control people’s mind  easily to attract  charging higher price Easy to penetrate the market for new product (under the same brand) To identify our self from others Property Right (intellectual property) 18

19. 19 Brand Decisions Building brand identity Building brand identity requires additional decisions on the brand’s name, logo, colors, tagline, and symbol Brand equity The positive differential effect that knowing the brand name has on customer response to the product or service Customer shows a preference for one product over another when they’re basically identical

20. 20 Value of Brand Equity Competitive advantages of high brand equity: The company will have more leverage in bargaining with distributors and retailers because customers expect them to carry the brand. The company can charge a higher price than its competitors because the brand has higher perceived quality. The company can more easily launch extensions because the brand name carries high credibility. The brand offers some defense against price competition.

21. 21 Branding Decision: To Brand or Not to Brand? Branding Challenges

22. 22 Advantages Brand name makes it easier for the seller to process orders and track down problems Seller ’ s brand name and trademark provide legal protection of unique product features Branding gives the seller the opportunity to attract a loyal and profitable set of customers Branding helps the seller segment markets Strong brands help build corporate image, making it easier to launch new brands and gain acceptance by distributors and consumers

23. Brand Element Choice Criteria Memorable Meaningful Likable Transferable not carry poor meanings in other countries and languages e.g. SBY berBoedi (Javanese sees it not wise enough; Sumatera Selatanese means liar) Adaptable Protectable 23

24. Branding Strategy Develop new brand elements for the new product Apply some of its existing brand elements Combine the new brand with existing brand elements 24

25. 25 Brand-Sponsor Decisions Manufacturer brand e.g. BASF Distributor brand e.g. Acer Licensed brand name e.g. Stationery Mickey Mouse, Barbie; Apparel Playboy

26. 26 Branding Decisions Four available strategies Individual names  The firm doesn ’ t tie its reputation to the product (e.g. Paperline, Mirage, Big Boss, Sinar Dunia manufactured by Tjiwi Kimia) Blanket family names  No need for “ name ” research or large advertising cost to create brand-name recognition (e.g. Heinz, ABC) Separate family names for all products  When a firm produces quite different products (e.g. Ace Hardware, Krisbow, Index) Corporate name combined with individual product names  e.g.,Honda Jazz, Honda CRV

27. From STP Segment-by-segment invasion plan Intersegment cooperation 27

28. Selecting & Evaluating Market Segment M1M1 M2M2 M3M3 P1P1 P2P2 P3P3 M1M1 M2M2 M3M3 P1P1 P2P2 P3P3 Single-segment concentration Selective specialization Product specialization M1M1 M2M2 M3M3 P1P1 P2P2 P3P3 M1M1 M2M2 M3M3 P1P1 P2P2 P3P3 M1M1 M2M2 M3M3 P1P1 P2P2 P3P3 Market specialization Full-market Coverage

29. GAP Inc.  Gap  Gap Outlet  GapKids  babyGap  GapBody  GapMaternity  Love (Gap Accessories)  Old Navy  Old Navy Outlet  Banana Republic  Banana Republic Factory Store  Forth & Towne  Piperlime 29 Upscale: Banana Republic Mid-market: GAP Budget-priced: Old Navy and Forth & Towne

30. Telkomsel VS Indosat Pasca bayar: Halo Pra bayar: AS Simpati Internet: Telkom Flash Pasca bayar: Matrix Pra bayar: IM3 Mentari Internet: IM2 30

31. Coca-Cola Co. VS Pepsi Co. Coca Cola Diet Coke Cherry Coke Coca Cola Zero Sprite Fanta (strawberry, orange) Pepsi Cola Diet Pepsi Pepsi Wild Cherry Pepsi One 7 UP Miranda (strawberry, orange) 31