#10: product strategy and branding

What is the market-based approach to brand valuation?

Valuation based on an estimate of the amount for which the brand can be sold.

What is the income-based approach to brand valuation?

Valuation based on future net revenues attributable to the brand

What is the formulary approach to brand valuation?

Valuation based on multiple criteria such as profitability

What is a brand?

A perception in consumers’ minds about relevance and value

What three things should brands do?

Resonate with customers, differentiate from competitors, and motivate employees

What is one advantage of branding for marketers?

It allows them to distinguish their products from others.

How does branding help consumers?

It helps them identify products to buy again and avoid those they do not want.

Why is branding useful when introducing new products?

Strong brands make it easier to gain customer acceptance.

How does branding help consumers express themselves?

It enables expression of personality

What is the correct order of the brand equity development process?

Brand awareness → brand image → brand loyalty → brand equity.

What is brand awareness?

When consumers know about the brand.

What is brand image?

A definite impression consumers have about a brand.

What is brand loyalty?

When consumers purchase only their favored brand.

How does brand loyalty build equity for new products?

Loyalty transfers to new offerings (e.g.

How do consumers help shape a brand?

By co-creating meaning through use

Why is a brand more than just a logo?

Because it represents a relationship with customers.

What is an example of brand co-creation?

Corona beer with the lime wedge ritual.

What defines a functional brand?

It satisfies functional needs and differentiates through performance or economy.

What defines an image brand?

It creates value through a projecting a distinct and admired image (ex. apple, nike)

What defines an experiential brand?

It focuses on consumer feelings and multi-sensory experiences.

What are the three components of brand positioning?

Competitive frames of relevance, points of difference, and points of parity.

What are competitive frames of relevance?

The nature of competition and definition of the target market.

What are points of difference (PODs)?

Attributes that are desirable to consumers and differentiate from competitors.

What are points of parity (POPs)?

Category credentials that allow the brand to be considered legitimate.

What does straddle positioning achieve?

Points-of-parity with competitors while achieving points-of-difference.

What must consumers understand when introducing a new brand?

What the new brand replaces or improves upon.

How do you build equity for new brands?

By building on an important benefit or consumer insight.

At what two levels does brand equity exist?

Differentiating feature and differentiating emotion.

What is a product?

A bundle of attributes that satisfies wants or needs.

What are tangible product attributes?

Size

What are intangible product attributes?

Price

What are the three levels of a product?

Actual product, core product, and augmented product.

Give an example of a core product.

The personal benefit of an American Girl doll (child joy or parent meaning).

What is the core idea behind competitive angles?

Successful products have competitive angles, “differentiate or die”.

What are the three main criteria for a competitive angle?

Unique/different, lifts consumer over a hurdle, and makes a personal connection

What is the “need to believe”?

Identifying the significant pain point the product solves.

Why must the pain point be significant?

Big problems = big opportunities; no one pays to solve a non-problem.

What is the “reason to believe”?

Demonstrating product benefits in a compelling way (“seeing is believing”).

What does it mean to “dominate situations”?

Winning key usage or buying situations where the product delivers superior value.

What is “quantifiable support”?

Facts and figures that provide credibility and support claims.

Why is quantifiable support especially important?

It matters for analytical buyers and high-risk purchases.

What is a “unique product claim”?

The feature that makes the product distinctly better or more memorable.

What are common sources for idea generation?

Customers

What is idea screening?

Identifying whether ideas risk missing opportunities (Type I error) or pursuing bad ones (Type II error).

In which stage does the new product development process most often break down?

Concept testing with potential customers.

What two components make up a marketing strategy?

Target market + marketing mix (product, place, price, and promotion).

What occurs during the business analysis stage of new product development?

Forecasting

What happens during the product development stage?

Creation of the product or prototype.

What is the purpose of market testing?

To test the product in several markets

What is a product?

A bundle of attributes that satisfies consumers' wants or needs.

What are examples of tangible product attributes?

Size

What are examples of intangible product attributes?

Price

What is a consumer product?

A product purchased by final consumers for personal consumption.

What are convenience products?

Inexpensive items requiring little shopping effort (ex. groceries).

What are shopping products?

Moderately expensive items requiring comparison and shopping effort (ex. fridge).

What are specialty products?

Products requiring extensive search; consumers are reluctant to accept substitutes (ex. car).

What are unsought products?

Products buyers do not actively seek out (ex. life insurance).

What is a business/industrial product?

A product purchased for further processing or for use in conducting business.

What are materials and parts in industrial product classifications?

Items used in manufacturing that become part of the final product (ex. noodles and carrots in chicken noodle soup).

What are capital items?

Products that aid in production or operations (ex. technology).

What are services and supplies in business products?

Operating supplies

What is a product item?

A specific version of a product.

What is a product line?

A group of closely related product items.

What is a product mix?

All products an organization sells.

What premise states that products eventually stop selling?

Products have limited life.

What premise explains that products move through different sales stages?

Sales pass through distinct stages with different marketing implications.

How do sales and profits behave across the PLC?

They vary at different stages.

Why are different strategies required throughout the PLC?

Each life-cycle stage demands different marketing actions.

What is the goal of the introduction stage?

Gain awareness and encourage trial.

What strategies occur in the growth stage?

Maximize market share, add features and improve quality, add channels and markets

What is the goal during the maturity stage?

Maximize profit and modify the market/marketing mix.

What occurs in the decline stage?

Reduce expenditures; choose to milk the brand, maintain, harvest, or drop