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Product and Branding Strategies

Product and Branding Strategies. The Product and the Product Mix. Components of the Market Offering. Product Physical goods Services Experiences Events Persons Places Properties Organizations Information Ideas. What is a Product?.

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Product and Branding Strategies

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  1. Product and Branding Strategies

  2. The Product and the Product Mix Components of the Market Offering • Product • Physical goods • Services • Experiences • Events • Persons • Places • Properties • Organizations • Information • Ideas

  3. What is a Product? • A Productğanything that can be offered to a market for attention, acquisition, or consumption and that might satisfy a want or need. • Includes: • Physical Objects • Services • Events • Persons • Places • Organizations • Ideas • Combinations of the above

  4. What Is a Service? • A form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. • Examples: banking, hotel, airline, retail, tax preparation, home repairs.

  5. Products, Services, and Experiences Tangible Good With Accompanying Services Service With Accompanying Minor Goods Pure Tangible Good Hybrid Offer Pure Service Auto With Accompanying Repair Services Airline Trip With Accompanying Snacks Soap Restaurant Doctor’s Exam The Product-Service Continuum

  6. Levels of Product • Product levels--Customer value hierarchy • Core benefit • Basic product • Expected product • Augmented product • Potential product

  7. Levels of Product

  8. Product Classifications • Durability-Tangibility • Nondurable goods • Durable goods • Services

  9. Product Classifications -Consumer Products • Convenience Products • Purchased frequently& immediately • Low priced • Mass advertising • Many purchase locations • Staple goods • Impulse goods • Emergency goods • Shopping Products • Bought less frequently • Higher price • Gather product information • Comparison shopping • Suitability & Quality • Price & Style • Fewer purchase locations • Specialty Products • Special purchase efforts • High price • Unique characteristics • Brand identification • Few purchase locations • Unsought Products • New innovations • Products consumers don’t want to think about • Require much advertising & personal selling

  10. MARKETING CONSIDERATIONS

  11. Product Classifications - Industrial Products MaterialsandParts Raw materials, manufactured materials, and parts • CapitalItems Products that aid in buyer’s production or operations SuppliesandServices Operating supplies, repair, and maintenance items

  12. Product Classifications -Other Marketable Entities • Activities undertaken to create, maintain, or change the attitudes and behavior toward the following: • Organizations, • Persons, • Places, • Ideas, • etc.

  13. Product Strategy • Product Strategy decisions includes ğ decisions on: • branding, • packaging, • labeling, • and services for individual products • Product Strategy also calls ğ for managing the product lines and product mix.

  14. Individual Product Decisions Product Attributes Branding Labeling Packaging Product Support Services

  15. Product Quality Ability of a Product to Perform Its Functions(Includes Performance Quality and Conformance Quality) Product Features Help to Differentiate the Product from Those of the Competition (Value to customer; cost to company) Product Style & Design Process of Designing a Product’s Style & Function (Influences experience) Product Attributes Developing a product or service involvesğDefining the benefits that it will offer such as:

  16. Packaging • Designing and producing the container or wrapper for a product. • Packaging used to just contain and protect the product • Packaging now has promotional value

  17. Packaging • Marketers should: • Establish a packaging concept, • Develop specific elements of the package, • Tie together elements to support the positioning and marketing strategy. • Developing a good package: • Protect the elements • Ensure product safety • Market the brand • Address environmental concerns

  18. Packaging • Packaging ğ a crucial marketing tool • Self-serviceğ the package must perform many of the sales tasks • Consumer affluenceğ consumers are willing to pay a little more for convenience, appearance, and prestige for better packages • Packages contribute to instant recognition of the company or brand image • The packaging offer an opportunity for innovation

  19. Labeling • Printed information appearing on or with the package. • Performs several functions: Promotes the product through attractive graphics Describes several things about the product Identifies product or brand

  20. Product - Support Services Companies should design support services to profitably meet the needs of target customers and gain competitive advantage. How? Step 1.Survey customers to assess the value of current services and to obtain ideas for new services. Step 2.Assess costs of providing desired services. Step 3.Develop a package of services that delights customers and yields profits to the company.

  21. Product Line • Product Lineğ a group of products that are closely related; because: • they function in a similar manner, • are sold to the same customer groups, • are marketed through the same types of outlets, or • fall within given price ranges

  22. Product Mix - all the product lines offered Consistency Product Mix Width - number of different product lines Length - total number of items within the lines Depth - number of versions of each product in the line -- All of the product lines and items that a particular seller offers for sale--

  23. Product-Mix Width and Product-Line Length for Procter& Gamble Products

  24. Product Mix Decisions • 4 ways that the company can use in expanding its business: • It can add new product lines, widening its product mix • It can can lengthen each product line(becoming a more full-line company) • It can add more versions of each product, deepening its product mix • It can pursue more product line consistency -or less(depending on the strategic position that the firm wants to acquire in the market)

  25. Product Line Decisions: Product Line Analysis • Product LineAnalysis: Companies need to know the sales and profits of each item to determine which items to build, maintain, harvest or divest. • Sales/profits : A high concentration of sales in a few items means line vulnerability. • (if one of the items account for 5-6 % of sales and profit, this item may be dropped.) • Market profile : How the line is positioned against competitors’lines

  26. Product-Item Contributions to a Product Line’s Total Sales and Profits

  27. The Product and the Product Mix • Market profile: How the line is positioned against competitors’ lines. Product Map for a Paper-Product Line

  28. Product-Line Lenght • Product line lengthğ the number of items in a product line. • The 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 • Product line length is influenced by company objectives.

  29. Product Line Decisions: Product Line Analysis • Product LineAnalysis: Companies need to know the sales and profits of each item to determine which items to build, maintain, harvest or divest. • Sales/profits : A high concentration of sales in a few items means line vulnerability. • (if one of the items account for 5-6 % of sales and profit, this item may be dropped.) • Market profile : How the line is positioned against competitors’lines

  30. Product Line Decisions • Product lines ğ tend to lenghten over time • Design/engineering costs, Inventory carrying costs order processing/ transportation/promotion costs increase • The company can adjust the length of its product line mainly in 2 ways: • Line Stretching • Downmarket • Upmarket • Two-way • Line Filling

  31. ProductLine Decisions:Product Line Stretching • Downward stretchğ occurs when the company moves from the high end of the market to the lower end • Upward stretchğ when companies at the lower end of the market want to enter the higher end. • Two-way stretchğ when companies in the middle range of the market decide to stretch their lines in both directions

  32. Product Line Stretching Marriott offers a full line of hotel brands, each aimed at a different market.

  33. ProductLine Decisions:Product Line Filling • Line Fillingğ increasing the product line by adding more items within the present range of the line • Main Reasons: • To reach extra profits, • To try to satisfy dealers, • To use excess capacity, • To fill up the holes in the market in order to keep out competition • To be the leading full-line company

  34. ProductLine Decisions • Line modernization • In rapidly changing product markets, modernization is carried on continously • Microprocessor and software companies • Line Featuring/Line Pruning • One or few items are selected to feature. • Sometimes, managers feature promotional models at the low end of the line to serve as “traffic builders”.

  35. Branding • A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service. Essentially; • A brandğ a seller’s promise to deliver a specific set of features, benefits and services consistently to the buyers.

  36. Most Valuable Global Brands(Interbrand, 2006)

  37. Branding • makes it easier for the seller to process orders / track down problems • brand name and trademark provide legal protection of unique product features • helps the seller segment markets • gives the seller the opportunity to attract loyal customers • results in more product variety and choice for consumers

  38. --Brand--Six Levels of Meaning User Culture Personality Attributes Benefits Values

  39. BrandEquity Devoted to Brand Values the Brand (brand as friend) Satisfied & Switching Cost (incur costby changing brands) Satisfied Customer (no reason to change brands) No Brand Loyalty (customer will change brands)

  40. BrandEquity • High brand equity - competitive advantages: • Reduced marketing costs • More trade leverage in bargaining with distributors and retailers because customers expect them to carry the brand • Charging a higher price than competitors because the brand has higher perceived quality • More easily launch extensions because the brand name carries high credibility • Offers the company some defense against price competition • A brand needs to be carefully managed so that its equity doesn’t depreciate. • Brand-equity managers

  41. Branding • Brand building tools • Public relations and press releases • Sponsorships • Clubs and consumer communities • Factory visits • Trade shows • Event marketing • Public facilities • Social cause marketing • High value for the money • Founder’s or a celebrity personality • Mobile phone marketing

  42. Brand • No brand Branding Decision Major Branding Decisions • Brand- • Sponsor • Decision • Manufac- • turerbrand • Distribu- • tor(private) • brand • Licensed • brand • Brand- • Name • Decision • Individual • branding • Blanket • family • name • Separate • family • Names • Company- • individual • names • Brand- • Strategy • Decision • Line • extension • Brand • extension • Multi- • brands • New • Brands • Co-brands • Brand- • Positio- • ning • Decision • Reposi- • tioning • No • reposi- • tioning

  43. Brand Sponsorship • Manufacturer’s brands • Also called national brands (e.g., Dogus Cay, Glade …) • Private brands • Also called store or distributor brands (e.g., Migros, Carrefour, …) • Licensed brands (Ferrari hats, Disney toys, Mc Donald's toys)

  44. Brand Name Decisions • Individual names • (e.g. Unilever: Omo, Cif) • Blanket family names • (e.g. Arçelik, Bosch, Pınar) • Separate family names for all products • (e.g.Sears: Kenmore for appliances, Craftsman for tools, Homart for home installations) • Company trade name combined with individual product names • (e.g.Kellog’s Corn Flakes,Eti Crax, Ülker Cici Bebe)

  45. Good Brand Names Lack Poor Foreign Language Meanings Distinctive Suggest Product Qualities Suggest Product Benefits Easy to: Pronounce Recognize Remember

  46. A Few Examples

  47. Product Category Line Extension Brand Extension Existing New Existing Multibrands BrandName New Brand Development Strategies New Brands

  48. Brand Positioning • Can position brands at any of three levels: • Product attributes • Product benefits • Beliefs and values

  49. Intangibility Services cannot be seen, tasted, felt, heard, or smelled before purchase Inseparability Services cannot be separated from their providers Perishability Services cannot be stored for later sale or use Variability Quality of services depends on who provides them and when, where, and how they are delivered Service Characteristics Services

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