MKTG Chapter 10: Managing Successful Products, Services, and Brands

Brand Equity

added value a brand name gives to a product beyond the functional benefits provided; gives brand competitive advantage; higher WTP

Brand purpose

the reason why a brand exists, the place it has in consumers' lives, the solution it provides to consumers, and the brand's role in making society better off; focuses on a brand's underlying values and beliefs and its identity and meaning

Brand Personality

a set of human characteristics associated with a brand name; what counts is how a brand is perceived in the eyes of consumers

Brand Licensing

a contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company (licensee) for a royalty or fee

Multiproduct branding

a company uses one name for all of its products in a product class

Product line extensions

practice of using a current brand name to enter a new market segment in its product class

Subbranding

combines corporate or family brand with a new brand

Brand extension

practice of using a current brand name to enter a different product class

Co-branding

practice of pairing two or more strong brands to facilitate the marketing of joint product or service for their mutual benefit

Brand dilution

occurs when consumers no longer associate a brand with a specific product or service or start thinking less favorably about the brand

Multibranding

involves giving each product a distinct name when each brand is intended for a different market segment

Fighting brands

introduce new product brands as defensive moves to counteract and confront competitor brands

Private Branding

when a company manufactures products but sells them under the brand name of a wholesaler or retailer; private labeling/reseller brand

Mixed Branding

where a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market

Packaging

component of a product that refers to any container in which it is offered for sale and on which label information is conveyed

Label

an integral part of the package that typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients

Seven Ps of Services Marketing

expanded marketing mix concept for services that includes the four Ps (product, price, promotion, and place/distribution) as well as people, physical environment, and processes

Off-Peak Pricing

charging different prices during different seasons of the year and different times of the day or during different days of the week to reflect variations in demand for the service

Capacity Management

integrating the service component of the marketing mix with efforts to influence consumer demand

Product Life Cycle

describes the stages of a new product goes through in the marketplace: introduction, growth, maturity, and decline

Introduction

creates consumer awareness and stimulate trial

Primary Demand

desire for the product class rather than for a specific brand, since there are few competitors with the same product (intro)

Selective Demand

preference for a specific brand (intro)

Skimming Strategy

setting an initial high price to help the company recover the costs of development and capitalize on the price insensitivity of early buyers (intro)

Penetration Pricing

setting an initial price low to discourage competitive entry and build unit volume (intro)

Growth Stage

characterized by rapid increases in sales where competitors appear; changes appear in the product during this stage, like differentiating a company’s brand from competitors and improving or adding features; important to broaden distribution

Repeat Purchasers

people who tried the product, were satisfied, and bought again (growth)

Maturity Stage

characterized by a slowing of total industry sales or product class revenue, and marginal competitors begin to leave the market, and fewer new buyers enter the market; find new buyers and usage

Decline Stage

occurs when sales drop; tend to consume a disproportionate share of management and financial resources relative to their future worth

Deletion

dropping the product from a company’s product line (most drastic) (decline)

Harvesting

(decline) when a company retains the product but reduces marketing costs, and maintains ability to meet customer request and promote goodwill

High Learning Product

significant customer education is required and there is an extended introductory period; e.g. Tesla, iPhones

Low Learning Product

little learning is required by the consumer and the benefits of purchase are readily understood; easily imitated by competitors and marketing strategy is to broaden distribution quickly; iPhone Face ID commercial

Fashion Product

style of the times; fashion is the one thing that comes and goes

Fad Product

typically novelties and have short life cycle; silly bands, fidget spinners, Gangnam Style

Product Class

refers to the entire product

Product Form

pertains to variations of a product within the product class

Diffusion of Innovation

when a product diffuses, or spreads, through the population

Product Modification

altering one or more of a product’s characteristics, such as quality, performance, or appearance, to increase the product’s value to customers and increase sales

Product Bundling

the sale of two or more separate products in one package (increase value to consumers)

Market Modification

strategies by which a company tries to find new customers, increase a product’s use among existing customers, or create new use situations

Product Repositioning

changes the place a product occupies in a consumer’s mind relative to competitive products

Trading Up

adding value to the product (or line) through additional features or higher-quality materials

Trading Down

reducing a product’s number of features, quality, or price

Brand Manager

manages the marketing efforts for a close-knit family of products or brands

Points-of-Difference

attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competing brand (20%)

Points-of-Parity

associations that are not necessarily unique to the brand but may be shared with other brands (80%)

Points of Parity/Difference Example - Sunny D

shows kids drinking it, parents opening the fridge and displaying competitors, portrayed Sunny D as the healthy alternative that tasted good, and showed associations with other brands as tasty drink kids love

Product Life Cycle

(1) introduction, to inform (2) growth, to persuade (3) maturity, to remind like Coca-Cola, more fun and exciting (4) decline, to phase out

Decline Stage Two Choices

Discontinue brand or reposition brand (change brand image to try to "restart" and make it successful again (ex. subway)

3 Ways to manage a product through its life cycle

(1) modifying the product (2) modifying the market (3) repositioning the product

3 Aspects of the Product Life Cycle

(1) length of cycle (2) shape of their sales curve (3) difference between product classes and forms

Common reasons for resisting a product

usage barriers, value barriers, risk barriers, or psychological barriers

Consumers benefit the most from branding...

consumers assign personality traits to products and choose items that are consistent with their own desired self-image