chapter 11: product, branding, packaging decisions

product

anything that is of value to a consumer and can be offered through a voluntary marketing exchange

what four things are components of a product?

1. core customer value

2. actual product

3. associated services or augmented product

what is product complexity (draw it out) - exhibit 11.1

core customer value (definition)

defines the basic problem solving benefits that consumers are seeking

actual product (definition)

includes brand name, features/design, quality level, packaging

associated services or augmented product (definition)

nonphysical aspects of the product (ex: product warranty, financing, product support, after-sale service)

what are the types of products (4)

1. specialty products/services

2. shopping products/services

3. convenience products/services

4. unsought products/services

consumer products

products and services used by people for their personal use

specialty products/services (definition)

those for which customers express such a strong preference that they will expend considerable effort to search for the best supplierss

shopping products/services (definition)

products or services for which consumers will spend a fair amount of time comparing alternatives, such as furniture, apparel, fragrances, appliances, and travel

convenience products/services (definition)

are those products or services for which the consumer is not willing to expend any effort to evaluate prior to purchase

unsought products/services (definition)

products or services that consumers either do not normally think of buying or do not know about; require lots of marketing effort and various forms of promotion

product mix (definition)

complete set of all products and services offered by a firm

product lines (definition)

which are groups of associated items that consumers tend to use together or think of as part of a group of similar products or services (usually in a product mix)

breadth (definition)

represents a count of the number of product lines offered by the firm (in a product mix)

depth (definition)

equals the number of products within a product line (in a product line)

cannibalize

take away sales from the other brand, with no net sales, profit, or market share increase (in a product mix)

why would firms want to increase depth?

Firms might add items to address changing consumer preferences or to preempt competitors while boosting sales

why would firms want to decrease depth?

Depth From time to time, it is also necessary to delete products within a product line to realign the firm's resources

why would firms want to decrease breadth?

Sometimes it is necessary to delete entire product lines so address changing market conditions or meet internal strategic priorities

why would firms want to increase breadth?

Firms often add new product lines to capture to capture new evolving markets and increase sales

what are the advantages that brands provide firms and consumers

• facilitate purchases

• establish loyalty

• protect from competition and price competition

• are assets

• affect market value

what makes a brand (6 things)

• brand name

• URLs

• logos/symbols

• characters

• slogans

• singles/sounds

what are the components of brand equity

• brand awareness

• perceived value

• brand association

• brand loyalty

brand equity

the set of assets and labilities linked to a brand that add or subtract from the value provided by the product or service

brand awareness

measures how many consumers in a market are familiar with the brand and what it stands for and have an opinion about it

perceived value

• the relationship between a product's or service's benefits and its cost

• customers usually determine the offering's value in relation to the value of its close competitors

brand association

reflect the mental and emotional links that consumers make between a brand and its key product attributes, such as a logo and its valuable brand color, a slogan, or a famous personality

brand loyalty

occurs when a customer buys the same brand’s product or service repeatedly over time rather than buying from multiple suppliers within the same category

what are the types of branding strategies used by firms?

whether to use manufacturer brands or retailer/store brands, how to name brands and product lines, whether or not to extend the brand name to other products and markets, should the brand name be used with another firm or licensed to another firm, and whether or not the brand should be repositioned.

brand ownership is divided into what 2 categories?

• manufacturer/national brands

• retailer/store brands or private-label brands

manufacturer/national brands

owned and managed by the manufacturer where they develop the merchandise, produces it to ensure consistent quality and invests in a marketing program to establish an appealing brand image

retailer/store brands or private-label brands

• products developed by retailers

• retailers manufacture their own products, in other cases they develop the design and specifications for their retailer/store brands and then contract with manufacturers to produce those products

family brands

the individual brands benefit from the overall brand awareness associated with the family name

individual brands

a firm can use individual brand names for each of its products

brand extension

the use of the same brand name in a different product line

• increase in the product’s mix’s breadth

line extension

use of the same brand name within the same product line and represents an increase in a product line's depth

brand dilution

occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold

cobranding

the practice of marketing two or more brands together on the same pack-age, promotion, or store

• can enhance consumers' perceptions of product quality by signaling unobservable product quality through links between the firm's brand and a well-known quality brand

brand licensing

is a contractual arrangement between firms whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee

brand repositioning or rebranding

rebranding, refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand's core emphasis with changing market preferences

primary package

one the consumer uses; from the primary package consumers typically seek convenience in terms of storage, use and consumption

• (ex: toothpaste tube)

secondary package

• the wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners

• consumers can use this to find additional product info that might not be available in the primary package

what are the roles of packaging

• attracts consumers’ attention

• offers a promotional tool

• enables products to stand out from their competitors

• allows for the same product that appeal to different markets with different sizes

• repositioning of a product

• target new market

sustainable packaging

a product packaging that has less of a negative impact on the environment

describe the components of a product (paragraph form)

The product itself is important, but so are its associated services, such as support or financing. Other elements combine to produce the core customer value of a product: the brand name, quality level, packaging, and additional features

identify the types of consumer products

• speciality

• shopping

• convenience

• unsought products

Explain the difference between a product mix's breadth and a product line's depth

Breadth, or variety, entails the number of product lines that a company offers. Depth involves the number of categories within one specific product line

Identify the advantages that brands provide firms and consumers

Brands play important roles in enabling people to make purchase decisions more easily and encouraging customer loyalty. For firms specifically, they also constitute valuable assets and improve a company's bottom line and help protect against competition

Explain the various components of brand equity (paragraph form)

Brand equity summarizes the value that a brand adds or subtracts from the offering's value. It comprises brand awareness, or how many consumers in the market are familiar with the brand; brand associations, which ar the links consumers make between the brand and is image; and brand loyalty, which occurs when a consumer will only buy that brand's offer. Brand equity as encompasses the concept of perceived value, which s subjective measure that consumers develop to asses the costs of obtaining the brand

Determine the various types of branding strategies used by firms (paragraph form)

Firms use a variety of strategies to manage their brands. First, they decide whether to offer manufacturer and/or private-label brands. Second, they have a choice of using an overall family brand or a collection of product line or individual brands. Third, to reach new markets or extend their current market, they can extend their current brands to new products. Fourth, firms can co-brand with another brand to create sales and profit synergies for both. Fifth, firms with strong brands have the opportunity to license their brands to other firms. Finally, as the marketplace changes, it is often necessary to reposition a brand

Distinguish between brand extension and line extension

Whereas a brand extension uses the same brand name for a new product that gets introduced into new or the same markets, a line extension is simply an increase of an existing product line by the brand

Indicate the advantages of a product's packaging and labeling strategy

Similar to brands, packaging and labels help sell the product and facilitate its use. The primary package holds the product, and its label provides product information. The secondary package provides additional consumer information on its label and facilitates transportation and storage for retailers as well as their customers. Labels have become increasingly important to consumers because they supply important safety, nutritional, and product usage information