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Chapter Eight Product and Branding Strategy

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1 Chapter Eight Product and Branding Strategy
Marketing: An Introduction Second Canadian Edition Armstrong, Kotler, Cunningham, Mitchell and Buchwitz Chapter Eight Product and Branding Strategy Copyright © 2007 Pearson Education Canada

2 Copyright © 2007 Pearson Education Canada
Looking Ahead Define product and the major classifications of products and services. Describe the roles of product and service branding, packaging, labelling and product support services. Explain the decisions companies make when developing product lines and mixes. Identify the four characteristics that affect the marketing of a service. Discuss the additional marketing considerations that services require. Copyright © 2007 Pearson Education Canada

3 Copyright © 2007 Pearson Education Canada
Products Defined Product: any market offering that is intended to satisfy a want or need. Service: a type of product that is intangible and does not result in the ownership of anything. Experience: a type of product that combines a service or physical product with a memorable experience. Copyright © 2007 Pearson Education Canada

4 Copyright © 2007 Pearson Education Canada
What is a Product? Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need. Includes: physical objects, services, events, persons, places, organizations, ideas or some combination thereof. Copyright © 2007 Pearson Education Canada

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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. Copyright © 2007 Pearson Education Canada

6 Copyright © 2007 Pearson Education Canada
Levels of a Product Core product or benefit. Actual product. Packaging, features, design, quality level, brand name. Augmented product. Warranty, delivery, credit, installation, service. Copyright © 2007 Pearson Education Canada

7 Consumer Product Types
Convenience -- Frequent purchase, easy buy, highly available, mass promotion. Shopping -- Less frequent, brand comparison, selective distribution and promotion. Specialty -- Strong brand preference, special effort, low price sensitivity, exclusive distribution, targeted promotion. Unsought -- Low awareness, negative interest, use personal selling. Copyright © 2007 Pearson Education Canada

8 Copyright © 2007 Pearson Education Canada
Convenience Products Purchased frequently and immediately. Low priced. Mass advertising. Many purchase locations. Examples: candy, soda, newspapers. Chapter 8, page 297 Copyright © 2007 Pearson Education Canada

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Shopping Products Bought less frequently. Higher price. Fewer purchase locations. Comparison shop. Examples: furniture, clothing, cars, appliances. Chapter 8, page 297 Copyright © 2007 Pearson Education Canada

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Specialty Products Special purchase efforts. High price. Unique characteristics. Brand identification. Few purchase locations. Examples: Lamborghini, Rolex Watch. Chapter 8, page 298 Copyright © 2007 Pearson Education Canada

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Unsought Products New innovations. Products consumers do not want to think about. Require much advertising and personal selling. Examples: life insurance, cemetery plots, blood donation. Chapter 8, page 298 Copyright © 2007 Pearson Education Canada

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Industrial Products Those purchased for further processing or for use in conducting business. Does not include consumer products as they move through a distribution channel. Chapter 8, page 298 Copyright © 2007 Pearson Education Canada

13 Business Products Types
Materials and parts. Raw and manufactured materials, parts. Capital items. Buildings and equipment used in buyer’s production or operations, long useful life. Supplies and services. Operating supplies, repair and maintenance items and services. Chapter 8, page Copyright © 2007 Pearson Education Canada

14 Other Market Offerings
Organizations: Profit (businesses) and nonprofit (schools and churches). Persons: Politicians, entertainers, sports figures, doctors and lawyers. Places: create, maintain or change attitudes or behaviour toward particular places (e.g., tourism). Ideas: Public health campaigns, environmental campaigns, family planning or human rights. Chapter 8, page 300 Copyright © 2007 Pearson Education Canada

15 Copyright © 2007 Pearson Education Canada
Product Decisions Individual product decisions. Product attributes. Branding. Packaging and labelling. Product support services. Product line decisions. Product mix. Line filling. Line stretching. Copyright © 2007 Pearson Education Canada

16 Product and Service Attributes
Quality. Performance and satisfaction includes level and consistency. Features. Differentiates a product from the competition. Assessed based on value and cost. Style and design. Style equals appearance: Design is the heart of the product. Copyright © 2007 Pearson Education Canada

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Branding Creating, maintaining, protecting and enhancing products and services. A brand is a name, term, sign, symbol, design or a combination of these that identifies the maker or seller of a product or service. Chapter 8, page Copyright © 2007 Pearson Education Canada

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Branding Advantages to buyers. Product identification. Product quality. Advantages to sellers. Basis for product’s quality story. Provides legal protection. Helps to segment markets. Chapter 8, page Copyright © 2007 Pearson Education Canada

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Packaging Designing and producing the container or wrapper for a product. Developing a good package. Packaging concept. Package elements. Product safety. Environmental concerns. Chapter 8, page 304 Copyright © 2007 Pearson Education Canada

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Labelling Printed information appearing on or with the package. Performs several functions: Identifies product or brand. Describes several things about the product. Promotes the product through attractive graphics. Chapter 8, page Copyright © 2007 Pearson Education Canada

21 Product Support Services
Assess the value of current services and obtain ideas for new services. Assess the cost of providing the services. Put together a package of services that delights the customers and yields profits for the company. Chapter 8, page 307 Copyright © 2007 Pearson Education Canada

22 Product Line Decisions
Group of closely related products because they function in a similar manner and are sold to similar segments with similar marketing mixes. Product line length refers to the number of items in the product line. Chapter 8, page 307 Copyright © 2007 Pearson Education Canada

23 Product Line Decisions
Line stretching. Adding products to the line outside of current range. Can stretch upwards, downwards or both ways. Line filling. Adding more products within current range. Customers must see a difference or they will get confused by too many choices. Chapter 8, page 308 Copyright © 2007 Pearson Education Canada

24 Copyright © 2007 Pearson Education Canada
Product Mix Decisions Product mix. All of the product lines and items that a particular seller offers for sale. Width. Number of different product lines the company carries. Depth. Number of versions offered of each product in the line. Consistency. How closely related the various lines are. Copyright © 2007 Pearson Education Canada

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Brand Equity The positive differential effect that knowing the brand name has on customer response to the product or service. Provides: More brand awareness and loyalty. Basis for strong, profitable customer relationships. Copyright © 2007 Pearson Education Canada

26 Major Brand Strategy Decisions
Brand positioning. Attributes, benefits, beliefs and values. Brand name selection. Selection, protection. Brand sponsorship. Manufacturer’s brand, private brand, licensing, co-branding. Brand development. Line extension, brand extension, multi-brands, new brand. Copyright © 2007 Pearson Education Canada

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Brand Positioning Can position brands at any of three levels. Product attributes. Product benefits. Consumer beliefs and values. Copyright © 2007 Pearson Education Canada

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Brand Name Selection It should suggest product’s benefits and qualities. It should be easy to pronounce, recognize and remember. It should be distinctive. It should be extendable. It should translate easily into foreign languages. It should be capable of registration and legal protection. Copyright © 2007 Pearson Education Canada

29 Copyright © 2007 Pearson Education Canada
Brand Sponsorship Manufacturer’s brand Brand sponsored and promoted by the producer of the good, such as Kellogg’s, Maytag or IBM. Private brand Brand created and owned by a reseller of a product or service such as President’s Choice. Copyright © 2007 Pearson Education Canada

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Brand Sponsorship Licensing. Selling the use of established brand names or identities to companies. Co-branding. Using the established brand names of two different companies on the same product. Copyright © 2007 Pearson Education Canada

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Four Brand Strategies Line extension Brand Multi- brands New brands Existing Product category Copyright © 2007 Pearson Education Canada

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Brand Development Line extension. Introduction of additional items in a given product category under the same brand name (e.g., new flavors, forms, colors, ingredients or package sizes). Brand extension. Using a successful brand name to launch a new or modified product in a new category. Copyright © 2007 Pearson Education Canada

33 Copyright © 2007 Pearson Education Canada
Brand Development Multi-brands. Offers a way to establish different features and appeal to different buying motives. New brands. Developed based on belief that the power of its existing brand is waning and a new brand name is needed. Also used for products in new product category. Copyright © 2007 Pearson Education Canada

34 Copyright © 2007 Pearson Education Canada
Brand Management Managing long-term brand equity. Deliver a full brand experience to customers. Train employees to deliver the brand experience. Rebrand if needed to meet changing customer needs. Appoint brand equity managers. Chapter 8, page Copyright © 2007 Pearson Education Canada

35 Service Characteristics
Intangibility. Cannot be seen, tasted, felt or smelled before purchasing. Inseparability. Consumed when it is provided and cannot be separated from the provider. Variability. Quality depends on who provides. Perishability. Cannot be stored or resold. Copyright © 2007 Pearson Education Canada

36 The Service-Profit Chain
Internal service quality. Superior employee selection and training. Quality work environment. Support for those dealing with customers. Satisfied and productive service employees. Greater service value. Satisfied and loyal customers. Repeat purchasing and word of mouth advertising. Healthy service profits and growth. Copyright © 2007 Pearson Education Canada

37 Major Service Marketing Tasks
Managing service differentiation. Develop a differentiated offer, delivery and image. Managing service quality. Be customer obsessed, set high service quality standards, have good service recovery, empower front-line employees. Managing service productivity. Train current employees or hire new ones, increase quantity and sacrifice quality, harness technology. Copyright © 2007 Pearson Education Canada

38 Responsible Product Decisions
Social responsibility in product decisions. Competition Act. Hazardous Products Act. Food and Drug Act. Patent laws. Issues for discontinuing products. Legal and ethical dangers of defective product design. Chapter 8, page 326 Copyright © 2007 Pearson Education Canada

39 Global Product Marketing
Decide which products and services to introduce. Decide how much to standardize or adapt. Packaging presents new challenges. Service marketers face special challenges. Trend toward global service companies will continue. Chapter 8, page 326 Copyright © 2007 Pearson Education Canada

40 Copyright © 2007 Pearson Education Canada
Looking Back Define product and the major classifications of products and services. Describe the roles of product and service branding, packaging, labelling and product support services. Explain the decisions companies make when developing product lines and mixes. Identify the four characteristics that affect the marketing of a service. Discuss the additional marketing considerations that services require. Chapter 8, page 291 Copyright © 2007 Pearson Education Canada


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