Chapter 9: Product, Branding, and Packaging Decisions

Product complexity - Core Customer Value

The basic problem-solving benefits that consumers are seeking

• marketers must convert this to an actual product

Associated services

The non-physical attributes of the product such as product warranties, financing, product support, and after sale services 

Types of products 

Marketers will consider the type of product they are selling as this will effect how they promote, price, and distribute their product. 

• there are 2 types of product categories based on whos buying them: consumers or business

Consumer products

products and services used by people for their personal use. this can be further categorized into:

• Speciality goods/services: products or services toward which consumers show a strong preference and which they will expend considerable effort to search for the best suppliers

• Shopping goods/services: products or services for which consumers will spend time comparing alternatives 

• Convenience goods/services: products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase 

• unsought products/services: Products/services consumers do not search out or do not know about 

Product Mix 

The complete set of all products offered by a firm 

Product lines

groups of associated items, such as those that consumers use together or think of as part of a group of similar products. 

product category 

an assortment of items that the customer sees as a reasonable substitutes for one another 

Product mix breadth

The number of product lines, or variety, offered by the firm.

Product line depth

the number of products within a product line

Stock keeping units (SKU)

individual items within each product category; the smallest unit available for inventory control

Change product mix breadth and depth

• increase breadth - firms often add new product lines to capture new or evolving markets, increase sales, and compete in new venues

• Decrease breadth - sometimes necessary to delete entire product lines to address changing markets internal strategic parties 

• Increase depth - Firms may add new products within a line to adress changing consumer preference or pre empt competitors while boosting sales.

• Decrease depth - sometimes it is necessary to delete product categories to realign resources. 

Branding

• a company lives or dies based on brand awareness as consumers cant buy products they don’t know exists 

• branding gives firms a way to differentiate its product offerings from competitors 

  • Brand elements: Brand names, logos, symbols, jingles, and descriptive packaging. 

Value of Branding

Brands add value to merchandise and services beyond physical and functional characteristics or the pure act of performing the service. There are 6 values of branding.

Brands facilitate purchasing 

Brands are often easily recognized by consumers and brands help consumers make quick decisions 

Brands establish loyalty

Over time and with continued use consumers learn to trust certain brands. once consumers become loyal they wont consider switching.

Brands protect from competition

strong brands are more established and have more loyal customer base thus they are protected from competition and price competition. 

Brands Reduce marketing costs

firms with well known brands can spend relatively less on marketing costs than firms with little known brands because the brand sells itself.

Brands are assets

brands are also assets that can be legally protected through trademarks and copyrights thus constitute a unique ownership for the firm. 

Brands impact market value

Having well known brands can have a direct impact on the company’s bottom line, the value of the company is its overall monetary wealth.

Brand equity

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

• brand health must be actively monitored to maintain a positive image  

Brand Awareness

Measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements in the firm’s communications to consumers 

Perceived value

The relationship between a product or service’s benefits and its cost.

Brand associations

The mental links that consumers make between a brand and its key product attributes; can involve a logo, slogan, or famous personality. similarly

• Brand personality: Refers to a set of human characteristics associated with a brand, which has symbolic or self-expressive meanings for consumers.

Brand Loyalty

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

Brand Ownership

brands can be owned by any firm in the supply chain, weather manufacturer, wholesaler, or retailer

types of brand ownerships

• manufacture brands: Brands owned and managed by the manufacturer.

• Private-label brands (store brands): Brands developed and marketed by a retailer and available only from that retailer. 

• Generic: A product sold without brand name, typically in commodities markets 

Naming brands and product lines

there are 2 types:

• Family brands: The use of a combination of the company brand name and individual brand name to distinguish a firm’s products.

• Individual brand: The use of individual brand names for each of a firm’s products.

when choosing a brand name companies should consider

1. The brand name should be descriptive and suggestive of the benefits and qualities associated with the product 

2. the brand name should be easy to pronounce 

3. company should be able to register the brand name as a trademark and legally protect it 

4. brand should be easy to translate to other languages 

Brand extension

The use of the same brand name for new products being introduced to the same or new markets.

Brand dilution

Occurs when a 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 package or promotion.

Brand licensing

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

• licensor will receive royalty payments from the licensee 

Packaging

• an important brand element as it offers more tangible/physical benefits to consumers, manufactures, and retailers 

• packaging grabs the consumers attention, allows product to stand out from competition, and offers a promotional tool 

• plays a key role in launching a new product 

labelling 

Labels on products and packages provide information that consumer need for their purchase decision and consumption of the product 

• information provided on them must comply with general and industry specific laws and regulations