Chapter 7- Product & Branding Strategy-edited

– incorporates the quality, features and design, brand name, packaging and other attributes that combine to deliver core product benefits.. Slide 7.13Product attributes • Define the bene

Slide 7.2

What is a product?

A product is anything that can be offered

to a market for attention, acquisition,

use or consumption that might satisfy a want or need

Slide 7.3

PRODUCT –

• everything that the customer

receives that is of value in terms of a perceived want, need or problem

Slide 7.4

Levels of a product

Figure 7.1 Three levels of product

– incorporates the quality, features and design, brand

name, packaging and other attributes that combine to deliver core product benefits.

• Augmented product

– incorporates the consumer services and benefits built around the core and actual products.

-Slide 7.6

Product classifications

• Products can be classified according to their durability and tangibility

– Non-durable products are goods consumed

quickly and used on one or a few occasions, e.g beer, soap

– Durable products are used over an extended

time and may last for years, e.g fridge.

• Marketers also divide products and services into two other classifications: consumer and industrial products.

Slide 7.7 Consumer products

Bought to satisfy personal and family needs

– Classified according to consumer shopping habits :

Slide 7.8

Table 7.1 Marketing considerations for consumer products

Slide 7.9

Industrial products

Products bought for further processing or the purposes of resale.

– Distinction based upon the purpose for which the product is

• Supplies and services

– Electricity to power the machines making shirts.

Slide 7.10

Organisations, persons,

places and ideas

• Marketers have broadened the

concept of product to include other marketable entities such as

organisations, persons, places and ideas

Slide 7.11

Product decisions

• Marketers make product decisions at three levels:

– individual product decisions

– product line decisions

– product mix decisions

Slide 7.13

Product attributes

• Define the benefits offered to the customer

• Product quality – Conformance and Customer driven quality – Durability, reliability, precision, ease of operation and other valued attributes.

• Product features – Features are competitive tools in differentiating the products from the competitors’ Assessed upon the basis of its customer value versus company cost.

• Product style and design

Slide 7.14

Branding

• A name, term, sign, symbol or design,

or a combination of these, intended

to identify the goods or services of one seller or group of sellers and to differentiate them from the

competitors

Slide 7.16

Branding: supplier

advantage

• Brand name makes it easier for the

supplier to process orders and track down problems.

• The supplier’s brand name and trademark provide legal protection for unique

production features that might otherwise

be copied by the opposition.

• Branding enables the supplier to attract a loyal and profitable set of customers

• Branding helps suppliers segment markets.

Slide 7.17

Branding: powerful marketing mechanism

• Leads to higher and more consistent product

quality.

• Increases innovation by giving producers an

incentive to look for more new features that can

be safeguarded by the patent.

• Branding results in more product variety and

choice for consumers.

• Branding provides consumer information about products and where to find them.

Slide 7.18

Packaging

– Innovative and attractive packaging to gain the attention of the consumer.

– Packaging is central to the marketing

considerations and the packaging concept should illustrate what the package should be

or do for the product.

• Protection of contents

• Design and presentation

• Colour, trade marks etc.

• Tamper-proof packaging

Slide 7.19

Labelling

– Identifies the product

– Conforms to legal requirements as in the case

of medical products

– Describes the key features of the product

– Promotes the product through attractiveness – Grades the quality of the product

– Unit pricing

Slide 7.20

Product support services

– Customer service is an essential element

of the product strategy, and can play a major or minor part in the product

offering.

– Product support services augment the actual products.

Slide 7.21

Product line considerations

• The product line is comprised of a group

of products that are closely related

because:

» they function in a similar manner

» are sold to the same groups

» are marketed through the same types of outlet

» fall within given price ranges

• Product line growth needs to be

planned carefully and is extended in two ways: ‘stretching’ and ‘filling’

Slide 7.23

Product line stretching

– Downward stretch

• Company initially located at the top end of the market and then

‘stretches’ downwards to pre-empt a competitor or respond to an attack Launch of C-Class by Mercedes-Benz.

Slide 7.24

Figure 7.3 Product-line stretching decisions 

Slide 7.25

Product line filling

– Increasing the product line by adding more items within the present range of the line – Reasons for product filling:

• Extra profits

• Satisfying dealers

• Using excess capacity

• Being the leading full-line company

• Plugging holes to keep out the opposition

– Care needs to be taken that the line filling

Slide 7.26

Product mix decisions

• Product mix or product assortment

consists of all the product lines and items that a particular seller offers for sale to buyers

Slide 7.274 Dimensions of the product

Slide 7.28

Product mix strategies

• Company can add new product lines, thus widening the product mix.

• Company can lengthen the existing product lines to

become a more full line company.

• It can add more product versions of each product and deepen its product mix.

• The company can pursue more product line consistency,

or less, depending upon whether it wants to have a

strong reputation in a single field or in several fields.

Slide 7.29

Branding strategy

• Branding viewed as the major enduring asset

of a company, outlasting products.

• Powerful assets that must be developed and managed.

• Branding is an important element of the

tangible product

• particularly in consumer markets as a means of linking items within a product line or emphasising the

Slide 7.30

Brand equity

• Brands represent the consumers’

perceptions and feelings about products and their performance

• The real value of branding is the ability to capture consumer preference and loyalty.

• Brands vary in power and value and have

varying degrees of brand awareness , brand preference and brand loyalty

Slide 7.31

Brand equity

• Brand equity is defined as the value

of the brand, based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations and other assets such as patents, trademarks and

channel relationships

Slide 7.32

Brand valuation

• Placing values on brands is difficult.

• Not always incorporated into the balance sheet

asset valuations

• Interbrand , the branding consultancy utilise the

estimated economic earnings; which is equal to the brand’s future operating profits minus a capital and tax charge, as the valuation method for brands.

– However, this does not measure future growth and thus the following marketing insight illustrates other methods:

Slide 7.33

– Customers buy benefits not features These features must be

translated into functional and emotional benefits.

Slide 7.35

Brand name selection

• A good name contributes significantly

to the success of a brand

• Given the global market, great care needs to be taken regarding the

translation of the brand name as

illustrated:

Slide 7.36

Desirable qualities for a

brand name

• Should suggest something about the product’s

features and benefits.

• Easy to pronounce, recognise and remember.

• Brand name must be distinctive.

• Must translate easily and accurately into other

major languages.

• Must be capable of registration and legal protection.

– Once selected, the brand name needs to be legally

protected and registered with the appropriate Trade Marks Register.

Slide 7.37

Brand sponsorship

• Manufacturer’s brand (national brand)

– Brand created and owned by the producer of the product

or service.

• Private brand (middleman, distributor or store brand)

– A brand created and owned by a reseller of a product or service.

Slide 7.38

Manufacturers’ brand

versus private brand

• The brand battles rage between

manufacturers’ brands and private brands Winners of the battle focus

on one simple rule: achieve success through delivering superior value to target customers

Slide 7.39

Manufacturers’ brand

versus private brand

• Retailers have many advantages:

– They control the stock on the shelf

– Which products to feature in promotions – They price store brands lower than the manufacturers’ brands

– Appeal to budget conscious consumers

– Higher profit margins generated

Slide 7.40

Brand licensing

• Branding is costly and time consuming and in an effort

to short circuit the process, some organisations seek licensing agreements for big brands especially in

emergent markets.

• The fastest growing licensing category is corporate

brand licensing, a form of licensing whereby a firm

rents a corporate trademark or logo made famous in one product or service category, and uses it in a

related category

Slide 7.41

Co-branding

• Co-branding occurs when two established

brand names of different companies are used

on the same product or service.

– creates broader consumer appeal.

– greater brand equity.

– allows companies to enter new markets with minimal risk or investment.

• It also has limitations:

Slide 7.42

Figure 7.5 Brand development strategies

flavours, forms, colours, added ingredients or package size.

– Danger of overextending the brand and losing meaning.

– Danger of cannibalisation of own products.

Slide 7.44

Brand development

– Using a successful brand name to launch a new or

modified product in a new category.

– Gives new product greater recognition and faster

acceptance.

– Save high advertising costs due to familiar brand name – Must ensure the appropriateness of the new product to the brand and market to customers that value the

brand.

– Guard against confusing the consumer

– Establishes different features and appeals to different

market segments and buying motives.

– Some companies develop multiple brands for different

families of products This is called range branding and is illustrated by the Matsushita Group with its ranges of

Technics™, National™, Panasonic™ and Quasar™.

– In corporate branding the firm makes its company name the dominant brand identity across all products, e.g Johnson & Johnson™.

Slide 7.46

Brand development

• New brands

– Some companies create a new brand for

a new product if their existing brands

do not fit or seem appropriate.

Slide 7.47

Managing brands

• Active management of brands.

• Positioning needs to be continuously

communicated and the brand experience

Slide 7.48

Brand management

• Every customer touch-point must be

committed to customer service excellence and to the safeguarding and development

of the brand.

• Re-branding of brands is an expensive and long process not entered into lightly and often associated with mergers and

acquisitions

regulations, patent protection,

product quality and safety and

product warranties

perceptions of service providers

impact satisfaction levels: while

unethical behaviour damages the

supplier, ethical behaviour is expected.

Standardisation and all the

associated cost savings are the ideal but in the highly fragmented global market there are multiple needs and local nuances to consider

Slide 7.52International product

decisions

international markets, including

regulatory and environmental

adaptations