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Setting Product and Brand Strategy (Chapter 11). Consumer Goods Classification 1. Convenience goods : purchased , immediately, minimum of effort Price - ____________ Implications: readily available, many outlets, brand name, packaging, mass advertising. Consumer Goods Classification.

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setting product and brand strategy chapter 11
Setting Product and Brand Strategy (Chapter 11)

Consumer Goods Classification

1. Convenience goods: purchased , immediately, minimum of effort

Price - ____________

Implications: readily available, many outlets, brand name, packaging, mass advertising

consumer goods classification
Consumer Goods Classification

2. Shopping goods: comparison shopping for suitability, quality, price, and style

Price: ___________

Implications: brand; type of retailer ___________

consumer goods classification3
Consumer Goods Classification

3. Specialty goods: unique characteristics or brand identification; special purchasing effort; frequency of purchase is low

Price: _________

Implications: brand; type of retailer (store name)

4. Unsought goods: consumers _________ or do not normally think of buying

Implications: advertising; _________________

product mix decisions
Product Mix Decisions

Procter & Gamble\'s Product Mix

Baby Care

Beauty Care

Fabric & Home

Food &

Health Care

Care

Beverage

  • Width – number of product lines
  • Length – total number of items the company carries product lines
  • Depth – number of versions offered of each product in line

Six Toothpastes

in Line

Crest Multicare

Crest Cavity

Protection

Crest Tartar

Protection

product management challenge
Product Management Challenge

Should product line be extended, maintained, or reduced? Why?

Should new product lines be added to the mix? Should existing lines be deleted?

Organizational objectives: ____________________ etc.

Projections/trends – external environment

product line length issues
Product Line Length Issues

Lengthen/shorten product line (vary products within a given line)

Lengthening product lines could mean higher market share and market growth (customer satisfaction)

But, longer lines result in : design, engineering, inventory carrying, new promotion, etc.

product line length issues7
Product Line Length Issues

1. Growth strategies: line stretching

downmarket stretch: enter low end of the market (Sony Value Line)

upmarket stretch: enter high-end (Toyota-Lexus; Honda-Acura)

two-way stretch: both directions (Marriott:

____________________________________

product line length issues8
Product Line Length Issues

2. Line modernization:improvements to encourage customer to higher valued, higher priced items

3. Pruning: product from the line

Product is not selling

Limited production capacity

adding deleting product lines
Adding/Deleting Product Lines

Adding product lines (expanding width)

1. Response to ________________

2. Increase growth/profits AND ___________

3. Economical use of resources: Spread operational costs over a series of products; reduce average production and marketing costs

Deleting product lines

brand management strategies
Brand Management / Strategies

Brand: one of the most fundamental pieces of information customers use to simplify choices and reduce purchase risk.

name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers to differentiate them from those of competitors

brand management strategies11
Brand Management / Strategies

Brand Equity: marketplace value of a brand based on reputation and goodwill

  • Value to customer: interpretation/processing of information, confidence in purchase decision, use satisfaction
  • Value to firm: marketing programs, brand loyalty, prices/margins, brand extensions, trade leverage, competitive advantage
brand equity implications
Brand Equity Implications
  • Trade leverage in bargaining with retailersbecause customers expect them to carry the brand
  • Company can charge price because brand has higher perceived quality
  • Easier to launch extensions because brand name carries high _________________
  • Brand offers defense against price competition
brand management strategies13
Brand Management / Strategies

- company attaches corporate name to a product either to enter a new market segment or a different product class

brand management strategies14
Brand Management / Strategies

Product Category

Existing New

Line Brand

Existing extensionextension

Brand Name

New MultibrandsNew brands

brand management strategies15
Brand Management/Strategies

Line extension – company introduces additional items in a given product category under the same brand name (existing brand name; existing product category)

New flavors, forms, colors, ingredients, package sizes

brand management strategies16
Brand Management/Strategies

Brand extension – successful brand name is used to launch new or modified products in a new product class (new product category; existing brand name)

Honda: snowblowers, lawnmowers

Mattel: Barbie Doll brand –

brand management strategies17
Brand Management/Strategies

Multibrands: establish different features and appeal to different buying motives (existing product category; new brand name)

NewBrands: create a new name in a new product (new product category; new brand name)

brand management strategies18
Brand Management/Strategies

Dual branding (co-branding) - integrating two or more branded products

VISA & American Airlines

Pillsbury Cookie Dough & Nestle Chocolate

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