1. Chapter 9 Manage the Product

2. 12-2 Chapter Material 1.Product Lines & Product Mixes 2.Overview of Branding 3.The concept of Brand Equity 4.Types of Brands 5.Legal Protection for Brands 6.Packaging and Labeling 7.Product Quality

3. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-3 Product Planning  Product planning means developing product line and product mix strategies –Product line: Firm’s total product offering designed to satisfy a single need or desire of target customers –Product mix: The total set of all products that a firm offers for sale

4. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-4 Figure 9.3 Product Line Length and Product Mix Width

5. 11-5 Product Lines & the Product Mix Why have a product line vs. one product in a category? 1.Increased market share 2.Importance in the marketplace 3.Synergy between products 4.Spread the costs among products

6. 11-6 Product Mix Decisions Some possibilities are…  Add product lines  Add variations within product lines  Cancel products or entire lines due to poor sales or cannibalization  Alter products to extend their life

7. 12-7 Overview of Branding Brand - a name, term, symbol, design or some combination that identifies the products of one company while differentiating it from the competitions’ products. Firms build and maintain consumer loyalty and competitive advantage through branding Branding is the process of creating a product’s or a product line’s identity

8. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-8 Brand Names  A “good” brand name: –Creates a positive, memorable connotation –Positions a product by conveying an image or personality (Ford Mustang) or by describing how it works (Weedeater) –Is easy to say, spell, read, and remember –Fits the target market, product benefits, customer’s culture, and legal requirements

9. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-9 Evaluate This Brand Name! How does the brand name “PowerBar” stack-up against the criteria that distinguish a “good” brand name? How would you rate this name compared to those that are used by the competition?

10. 12-10 Brands Create a strong identity for products  Buyers respond to branding by making repeat purchases because they identify the item with the name of its producer.

11. 12-11 Brand Elements  Brand Name  Domain Name  Slogan  Character  Jingle  Symbol Can you provide an example or two for each brand element type?

12. 12-12 Q. What Brand elements for Budweiser were in this ad? What other brand elements exist for Budweiser?

13. 12-13 Q. What Brand elements of Pepsi were in this ad? What other types of brand elements exist for Pepsi?

14. 12-14 Brands provide “Brand Equity” Brand equity: added value that a certain brand gives to a product  Increases the likelihood that consumers will recognize the firm’s product when they make purchase decisions  Places products on consumers’ consideration list (or “selector” list)  Strong brand equity to can contribute to buyers’ perceptions of product quality

15. 12-15 Brands provide “Brand Equity” McDonald’s – one of the strongest Brands worldwide… Video_Ch 9\McDonalds1.mpg Video_Ch 9\McDonalds1.mpg

16. 12-16 Stages of Brand Acceptance 1.Brand recognition 1.Brand recognition: consumer knows of a brand but does not prefer it to competing brands 2.Brand preference 2.Brand preference: consumer selects one brand over competing offerings based on previous experiences with that brand 3.Brand insistence 3.Brand insistence: consumer refuses to accept alternatives and searches extensively for the desired good or service

17. 12-17 Types of Brands Manufacturers’ brand: brand name which is the same as the name of the manufacturer

18. 12-18 Manufacturers’ brand Manufacturers’ brand: Phillips products, such as light bulbs Video_Ch 9\Phillips.mpg Video_Ch 9\Phillips.mpg

19. 12-19 Private brand Private brand: brand name placed on products marketed by wholesalers and retailers –Craftsman A private brand for Sears

20. 12-20 Captive brand: national brands that are sold exclusively by a retail chain –Kmart’s captive brands include the Jaclyn Smith Label

21. 12-21 Family brand: Family brand: brand name that identifies several related products –Heinz A well known family brand

22. 12-22 Individual brand: Unique brand name that identifies a specific offering within a firm’s product line Irish Spring Sport: Colgate-Palmolive using individual branding for soaps

23. 12-23 Generic Brand  Generic Brand: branded name that has become a generically descriptive term for a class of products (ex: Kleenex) Q. What other Generic names can you think of?

24. 12-24 Generic Brands SCOTCH TAPEHANDI-WIPES JELL-OSARAN WRAP CHAPSTICKVASELINE K-YXEROX BANDAIDKLEENEX ZIPLOCTUPPERWARE BRILLOQ-TIPS PopsicleASPIRIN GOOGLEKOOL-AID

25. 12-25 Can you imagine where Pepsi would be today if it had not developed a brand name that is easy to pronounce, recognize, and remember? Finding someone in the world who is not aware of the Pepsi brand could be difficult.

26. 12-26 Co-branding Co-branding: practice of combining two strong brands, perhaps owned by different companies, to sell a product –Example: Compaq computer company teams with AMD processors

27. 12-27 You see co-branding at work in this commercial between two well know products and services: Playstation and the NFL.

28. 12-28 Brand extension Brand extension: application of a popular brand name to a new product in another product category Utility Lighter – A Bic Brand Extension

29. 12-29 Brand licensing Brand licensing: practice allowing other companies to use a brand name in exchange for a payment Nabisco Licenses Its Oreo Brand to Post Cereal

30. 12-30 Legal Protection  Trademark  Trademark: legal protection which confers the exclusive right to use a brand name, trade mark, and any slogan or product name abbreviation –The red disk, brand name, and distinctive bottle design are all Coca-Cola trademarks

31. 12-31  Oscar Mayer Received trademark protection for its slogan and Wienermobile.

32. 12-32 Legal Protection  Trade Dress  Trade Dress: visual cues related to color selections, physical layout, package shapes, labeling, and symbols used in branding to create an overall look. –Protection is comparable to trademarks –Ex: Chuck E. Cheese’s layout

33. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-33 Create Product Identity: The Package and The Label  Package: The covering or container for a product that provides product protection, facilitates product use and storage, and supplies important marketing communication  Label: descriptive part of a product’s package that list the brand-name or symbol, name and address of manufacturer or distributor, product composition in size, and recommended uses

34. 12-34 Packaging and Labeling Packaging has 3 major objectives: 1.Protect against damage, spoilage, & theft 2.Save money wherever possible 3.Assist in marketing the product! Together with the Label – a “3 second ad”

35. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-35 Figure 9.8 Functions of Packaging

36. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-36 Designing Effective Packaging  Effective packaging considers: –Packaging of other brands in same product category –Choice of packaging material and image it projects –Environmental impact of packaging –Shape and color influences on brand image

37. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-37 Labeling Regulations  Federal Fair Packaging and Labeling Act of 1966: –Aims at making labels more helpful to consumers by providing useful information  Food and Drug Administration: –Requires food labels to tell how much fat, trans fat, saturated fat, cholesterol, calories, carbohydrates, protein, and vitamins are in each product serving

38. 11-38 Quality as a product strategy Q. How do you define quality?!

39. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9-39 Figure 9.4 Product Quality

40. 11-40 Importance of Quality Quality Quality is a key component to a firm’s success in a competitive marketplace:

41. 11-41 Quality Programs 1.Total quality management 1.Total quality management (TQM): Approach that involves all employees in continually improving products and work processes to achieve customer satisfaction and world-class performance

42. 11-42 2.Worldwide Quality Programs –Malcolm Baldrige National Quality Award –ISO 9002: set of standards for quality management and quality assurance developed by the International Standards Organization in Switzerland for countries in the European Union – Six Sigma methodology: Process allowing no more than 3.4 defects per million (getting it right 99.9997% of the time)

43. 11-43 3.Benchmarking: 3.Benchmarking: Process in which an organization improves performance by continually comparing and measuring itself against the leading firms in an industry and implementing changes for quality improvement