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Setting Product and Brand Strategy (Chapter 11)

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)

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  1. 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

  2. Consumer Goods Classification 2. Shopping goods: comparison shopping for suitability, quality, price, and style Price: ___________ Implications: brand; type of retailer ___________

  3. 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; _________________

  4. 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

  5. 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

  6. 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.

  7. 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: ____________________________________

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. Brand Management / Strategies - company attaches corporate name to a product either to enter a new market segment or a different product class

  14. Brand Management / Strategies Product Category Existing New Line Brand Existing extensionextension Brand Name New MultibrandsNew brands

  15. 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

  16. 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 –

  17. 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)

  18. 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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