Strategic Marketing Fall 2005 Tinker AFB Campus. Chapter Eleven Setting Product and Brand Strategy. The Product and the Product Mix. Product is anything that can be offered to a market to satisfy a want or need. [Fig. 11.1, p. 212] Product Levels [Fig. 11.2, p. 213] core benefit,
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Strategic MarketingFall 2005Tinker AFB Campus Chapter Eleven Setting Product and Brand Strategy
The Product and the Product Mix Product is anything that can be offered to a market to satisfy a want or need. [Fig. 11.1, p. 212] • Product Levels [Fig. 11.2, p. 213] • core benefit, • basic product, • expected product, • augmented product (beyond expectations, where most competition takes place), and • potential product (future augmentation possibilities) • All five levels provide a customer value hierarchy
Product Hierarchy • need family • product family • product class • product line, • product type • brand • item
Product Classifications • Durability and Tangibility - nondurable goods, durable goods, and servIces • Consumer-Goods Classification - convenience, specialty, shopping, and unsought • Industrial-Goods Classification - materials and parts, capital items, and supplies and business services
Product Mix • A product mix (product assortment) is the set of all products and items that a particular sellers offers for sale to buyers. • The marketer must consider width, length, depth, and consistency.
Product-Line Decisions A product line is a group of products that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same channels, or fall within given price ranges.
Product-Line Analysis - Sales and profits of each item. • Sales and Profits - Margin differences related to core product, staples and convenience items. • Market Profile - Positioning against competitors.
Product-Line Length • A line is too short if the manager can increase profits by adding items; the line is too long if the manager can increase profits by dropping items. • Line Stretching • Downmarket stretch - enter on the low end • Upmarket stretch - enter on the high end • Two-way stretch - both directions • Line filling - adding more items (line filling and just-noticeable differences)
Line Modernization - Featuring and Pruning • Updating product line to reflect current trends and themes • Line Featuring - Select one or a few items in the line to feature. • Line Pruning - When a product is depressing profits, or a company is short of production capacity.
Brand Decisions Price premium with Brand-Name Companies. What is a brand? • A 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 and to differentiate them from those of the competition. • A brand has six levels of meaning: attributes, benefits, values, culture, personality, and user. [Table 11.1, p. 217] • Researching the position the brand occupies in the consumer mind. Key concepts include word associations, personifying the brand, and brand essence.
Brand Equity Issues related to brand name, logo, colors, tagline, and symbol. • Brand awareness, acceptability, preference and loyalty • A positive equity related to recognition, perceived quality, and emotional associations. • Provides differential effect to give the company more competitive marketing leverage. • Value of Brand Equity - Positive differential effect of brand on the customer.
Brand Equity (cont.) • Brand Valuation - Total financial value of the brand. • Competitive advantages for high brand equity: • Trade leverage in channel bargaining. • Higher price. • Line extensions easier. • Defense against price competition. • Managing Brand Equity - Mismanagement is a problem today in the quest for ever-increasing profits - brand loses focus.
Branding Challenges[Fig. 11.3, p. 219] • To Brand or Not To Brand? • Brand-Sponsor Decision • Manufacturer brand, distributor brand, licensed brand name • Brand ladder - Customer ranking of brands • Growing power of retailer brands -price orientation • Blurring of brand identity • Internet considerations
Brand Name Decision[Brand Name Strategies - Table 11.2, p. 221] • Should be connected to the brand's benefits and qualities. • Should be distinctive and easy to identify or recall. • Should provide positive images.
Line Extensions • Additional items in the same product category • Useful, but firms should avoid the "line-extension trap."
Brand Extensions • Existing brand name in a new product category. • Watch for carryover of poor images and brand dilution.
Multibrands, New Brands, and Co-Brands • Multibrands - Additional brand names in the same product category. • New Brands - New brand names in a new product category. • Co-brands - Two well-known brand names combine in one product offering.
Brand Auditing and Repositioning • Note brand report card. • Brand Repositioning - Changing customer preferences, or competition.
Packaging and Labeling Packaging - All the activities of designing and producing the container for the product. • Levels of Material - Primary, secondary, and shipping package. • Promotional Value - Self-service, Consumer affluence, Company and brand image, and Innovation opportunity. • Labeling • Identify, grade, describe, or promote the product. • Legal concerns for labels and packaging.