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

2. 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.

3. 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.

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

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

6. 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

7. 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

8. 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

9. 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

10. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-10 Honda Insight Hybrid Automobile and Casio EXILM Digital Camera What stage of the product life cycle?

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

12. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-12 FIGURE 11-3 FIGURE 11-3 Alternative product life cycles

13. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-13 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

14. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-14 FIGURE 11-4 FIGURE 11-4 Five categories and profiles of product adopters

15. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-15 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

16. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-16 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.

17. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-17 MANAGING THE PRODUCT LIFE CYCLE  Product Modification  Market Modification Modifying the Product Modifying the Market Finding New Users Increasing Use Creating New Use Situations

18. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-18 Milk Processor Education Program What modification strategy?

19. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-19 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

20. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-20 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.

21. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-21 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.

22. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-22 BRANDING AND BRAND MANAGEMENT Branding Brand Name  Logotype or Logo

23. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-23 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

24. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-24 got2b Hair Products and Mambo Fragrances What are their brand personalities?

25. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-25 FIGURE 11-5 FIGURE 11-5 Customer-based brand equity pyramid

26. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-26 Hummer Footwear by Roper How does brand licensing create brand equity?

27. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-27 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

28. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-28 BRANDING AND BRAND MANAGEMENT Branding Strategies  Multiproduct Branding (Family/Corporate) Multiproduct Branding (Family/Corporate) Line Extension Subbranding Brand Extension

29. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-29 FIGURE 11-6 FIGURE 11-6 Alternative branding strategies

30. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-30 BRANDING AND BRAND MANAGEMENT Branding Strategies  Multibranding Multibranding  Private Branding (Private Labeling/Reseller) Fighting Brands  Mixed Branding

31. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-31 Black & Decker and DeWalt Tools What is each firm’s branding strategy and why?

32. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-32 Packaging Label CREATING CUSTOMER VALUE THROUGH PACKAGING AND LABELING Communication Benefits Functional Benefits Perceptual Benefits

33. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-33 L’eggs Sheer Energy What packaging benefits?

34. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-34 Lay’s Stax and Pringles What packaging benefits?

35. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-35 Celestial Seasonings Tea What packaging benefits?

36. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-36  Exclusivity  Branding Product (Service) MANAGING THE MARKETING OF SERVICES  Capacity Management Capacity Management

37. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-37 McDonald’s Why is a logo an important aspect of branding?

38. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-38 Pricing MANAGING THE MARKETING OF SERVICES  Off-Peak Pricing Off-Peak Pricing Place (Distribution) Promotion

39. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-39 United States Postal Service Why do service organizations advertise?

40. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-40 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.

41. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-41 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.

42. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-42 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.

43. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-43 BRAND NEWS YOU CAN USE GOING ONLINE

44. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-44 1. 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

45. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-45 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.

46. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-46 PHILADEPHIA PHILLIES, INC.: SPORTS MARKETING 101 VIDEO CASE 11

47. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-47 VIDEO CASE 11 Philadelphia Phillies

48. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-48 TABLE 1 TABLE 1 Sources of revenues for the Philadelphia Phillies VIDEO CASE 11 Philadelphia Phillies

49. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-49 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?

50. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-50 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?

51. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-51 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?

52. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-52 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?

53. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-53 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?

54. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-54 DVD PLAYERS FOLLOW THE CLASSIC PRODUCT LIFE CYCLE SUPPLEMENTAL LECTURE NOTE 11-1

55. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-55 FIGURE 11-A FIGURE 11-A DVD player product life cycle

56. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-56 ASSESSING SERVICE QUALITY SUPPLEMENTAL LECTURE NOTE 11-2

57. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-57 FIGURE 11-B FIGURE 11-B Dimensions of service quality

58. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-58 CUSTOMER CONTACT AUDITS SUPPLEMENTAL LECTURE NOTE 11-3

59. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-59 FIGURE 11-C FIGURE 11-C Customer contact audit for a car rental (green shaded boxes indicate customer activity)

60. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-60 MANAGING THE PRODUCT LIFE CYCLE IN-CLASS ACTIVITY 11-1

61. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-61 ACT II Butter Lover’s Microwave Popcorn

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

63. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-63 ACT II Microwave Popcorn (The Classics)

64. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-64 ACT II Microwave Popcorn (Special Features)

65. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-65 ACT II Microwave Popcorn (Other)

66. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-66 USING BRAINSTORMING AND N/3 TECHNIQUES FOR BREATHE RIGHT ® STRIPS IN-CLASS ACTIVITY 11-2

67. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-67 Breathe Right Strip CNSBreathe Right

68. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-68 Breathe Right Strip Instructions

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

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

71. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-71 Breathe Right Strips Brand Personality Print Ads

72. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-72 Breathe Right Strips NYC Marathon Specialty Strip and Print Ad

73. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-73 Breathe Right Strips Newspaper Free-Standing Insert (FSI) Ad

74. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-74 Breathe Right Strips Back-in-the-Sack TV Ad

75. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-75 Breathe Right Strips Snore Relief Throat Spray TV Ad

76. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-76 Breathe Right Strips Kids TV Ad

77. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-77 CUSTOMER CONTACT AUDIT FOR A SERVICE IN-CLASS ACTIVITY 11-3

78. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-78 FIGURE 11-D FIGURE 11-D Customer contact audit for Hertz Car Rental (green boxes show customer activity; orange ones show employee activity)

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

80. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-80 Product Life Cycle The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

81. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-81 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.

82. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-82 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.

83. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-83 Brand Personality A brand personality is a set of human characteristics associated with a brand name.

84. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-84 Brand Equity Brand equity is the added value a given brand name gives to a product beyond the functional benefits provided.

85. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-85 Multiproduct Branding Multiproduct branding is a branding strategy in which a company uses one name for all its products in a product class.

86. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-86 Multibranding Multibranding is a branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment.

87. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-87 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.

88. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-88 Capacity Management Capacity management involves integrating the service component of the marketing mix with efforts to influence consumer demand.

89. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 11-89 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.