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What Is the Product?. . . . . BrandName. QualityLevel. Packaging. Design. Features. Delivery
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1. PRODUCT STRATEGY AND BRANDING Professor Chip Besio
Cox School of Business
Southern Methodist University
2. What Is the Product?
3. Types of Products Consumer
Industrial
Other Entities
Organizations
Persons
Places
Ideas
4. Types of ProductsCONSUMER PRODUCTS
5. Types of ProductsINDUSTRIAL PRODUCTS
6. Characteristics of Services
Can’t be seen, tasted, felt, heard,
or smelled before purchase
Can’t be separated from service
providers
Quality depends on who provides
them and when, where and how
Can’t be stored for later sale or use
7. Individual Product Strategy Decisions Attributes
Packaging
Labeling
Product Support
8. Product Attributes - Where Do They Come From?
Quality
9. Packaging
10. Multi-Product Strategy Decisions Branding
Product Lines
Product Mix
Variety
Assortment
11. What Do Brands Mean to Customers?
12. Brand Equity The value your customers perceive to be uniquely associated with your brand
= Awareness + Associations
Awareness
Recall
Recognition
Associations
Perceived Quality
Image
13. Brand Awareness
14. Brand AwarenessRECOGNITION
15. Brand AwarenessRECOGNITION
16. Brand AwarenessRECOGNITION
17. Brand AwarenessRECOGNITION Free publicity in the Wall Street Journal
18. Brand AwarenessRECALL Essential for memory-based choice and customer-initiated contact
19. Brand AssociationsPERCEIVED QUALITY
20. Brand AssociationsIMAGE Brand image is the integration of all experiences with and information about a brand as perceived and remembered by customers
The whole is more than the sum of its parts
Brand image is relative easy to create, but almost impossible to change!
Example 1: K-Mart and the “Blue Light Special”
Example 2: Hyundai and product quality
21. Brand Equity ? BRAND LOYALTY Brand loyalty - the probability of choosing a brand given that you are a user of that brand - can result from:
Inertia: the general tendency to repeat previous purchases due to high switching costs, convenience, or habit
Preference: an enduring preference for a brand over and above what would be expected based on the benefits derived from the product or from a long-term relationship with the brand
22. ExampleBRAND LOYALTY In 1983, six people in Chicago died of cyanide poisoning from tampered TYLENOL capsules. J&J reacted quickly and appropriately withdrawing all capsules from the market. Tylenol shared dropped only from 37% to 35% and eventually recovered completely.
23. Brand Equity ?BETTER BUSINESS RESULTS Brands
Price Market Share
Toothpastes (6 oz.) Price Premium Share Premium
Crest $2.19 $ .44 27.2% 17.3%
Colgate $2.19 $ .37 21.8% 12.2%
Aqua-fresh $2.19 $ .24 15.1% 6.6%
Close-Up $2.14 $ .27 16.5% 8.0%
SOURCE: Park, C. S. and V. Srinivasan (1994; based on survey results)
24. Brand Equity ?BETTER BUSINESS RESULTS Brands Price Market Share
Mouthwashes (24 oz.) Price Premium Share Premium
Scope $3.83 $ .47 31.2% 13.7%
Listerine $3.79 $ .42 26.8% 11.1%
Close-Up $5.02 $ .23 2.3% .8%
Plax $4.29 $ .26 10.3% 3.4%
Colgate $5.22 $ .10 1.4% .2%
SOURCE: Park, C. S. and V. Srinivasan (1994; based on survey results)
25. Major Brand Decisions
26. Brand Strategy
27. Brand Strategy Line Extension
Existing brand names extended to new forms, sizes, and flavors of an existing product category
Brand Extension
Existing brand names extended to new product categories
Multi-brands
New brand names introduced in the same product category
New Brands
New brand names in new product categories
28. Brand StrategyBRAND EXTENSION Brand associations determine which brand extensions will be successful
29. Brand StrategyBRAND EXTENSION
30. Brand StrategyBRAND EXTENSION
31. Product Mix