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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)

Consumer Goods Classification

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

Price - ____________

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


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Consumer Goods Classification

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

Price: ___________

Implications: brand; type of retailer ___________


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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; _________________


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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


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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


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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.


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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:

____________________________________


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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


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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


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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


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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


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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


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Brand Management / Strategies

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


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Brand Management / Strategies

Product Category

Existing New

Line Brand

Existing extensionextension

Brand Name

New MultibrandsNew brands


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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


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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 –


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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)


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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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