1. McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin LEARNING OBJECTIVES 10-2 Learning Objectives How do firms adjust their product lines to changing market conditions? Why are brands valuable to firms? How do firms implement different branding strategies? How do a product’s packaging and label contribute to a firm’s overall strategy?

3. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-3 iPod Anticipation

4. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-4 Air Jordan Moved beyond athletic endorsement to creation of entire line NBA fees fueled interest Priced at $125 Nike/Air Jordan Website

5. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-5 Product Assortment Product Assortment and Product Line Decisions

6. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-6 Product Assortment and Product Line Decisions Product Line Breadth Number of product lines Depth Number of categories within a product line

7. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-7 Change Product Mix BreadthProduct Mix Increase Breadth – True Religion Brand Jeans now are a lifestyle brand with apparel, belts, swimwear and fragrances Decrease Breadth – Due to competitive changes, TCBY is now focusing on Yogurt.

8. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-8 Change Product Mix Depth Increase Depth  Band-Aid now has over 40 products to heal cuts. Decrease Depth  McCormick spices eliminates dozens of products each year.

9. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-9 Product Line Decisions How is this changing the product mix? Does it increase breadth or depth? Is this research or advertising?

10. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-10 Within each product line, there are often multiple: A. product categories. B. primary packaging parts. C. product breadth. D. product assortment. E. private label brands.

11. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-11 The same types of decisions can be used for services Product Line Decisions for Services

12. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-12 Check Yourself 1. Why change product line depth? 2. What is the difference between product line breadth versus depth? 3. Why change product line breadth?

13. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-13 A brand can use: Name, logo symbols, characters, slogans, jingles and even distinctive packages. Branding Oscar Meyer Commercial

14. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-14 What Makes a Brand? Branding Brand name URLs Logos and symbols SlogansCharactersJingles

15. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-15 Value of Branding for the Customer and the Marketer Facilitate PurchasingEstablish LoyaltyProtect from CompetitionReduce Marketing CostsAre AssetsImpact Market Value

16. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-16 History in Advertising

17. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-17 Brand EquityBrand Equity: Awareness

18. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-18 Brand Equity: Perceived ValuePerceived Value How do discount retailers like Target, T.J. Maxx, and H&M create value for customers?

19. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-19 Brand Equity: Brand AssociationsBrand Associations

20. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-20 One of the dangers of hiring celebrities like Mel Gibson to endorse a company’s products is that when they engage in embarrassing behavior, to the degree that they are associated with the company’s brands, their actions hurt: A. brand equity. B. brand awareness. C. brand recognition. D. corporate brand category depth. E. all of the above.

21. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-21 Brand Equity: Brand LoyaltyBrand Loyalty Consumers are often less sensitive to price Marketing costs are much lower Firm insulated from the competition

22. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-22 1. How do brands create value for the customer and the firm? 2. What are the components of brand equity? Check Yourself

23. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-23 Brand Ownership Manufacturer brands or national brands Private-label brands or Store Brands Premium Generic Copycat Exclusive co-branded

24. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-24 Brand Ownership Private Label

25. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-25 Brand Ownership Exclusive Co-brands

26. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-26 Naming Strategies Corporate or family brand  The Gap Corporate and product line brands  Kellogg’s Corn Flakes Individual lines  Mr. Clean (Proctor & Gamble)

27. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-27 Brand Extension State Farm Website

28. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-28 Which of the following is a potential benefit of brand extension? A. It allows the perception of a brand with a quality image to be carried over to the new product. B. It lowers marketing costs. C. It can boost sales of the core brand. D. The firm can spend less on creating brand awareness and associations. E. all of the above.

29. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-29 Brand Dilution Evaluate the fit between the product class of the core brand and the extension. Evaluate consumer perceptions of the attributes of the core brand and seek out extensions with similar attributes. Refrain from extending the brand name to too many products. Is the brand extension distanced enough from the core brand?

30. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-30 Co-branding

31. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-31 Brand Licensing

32. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-32 Brand Repositioning How is this repositioning?

33. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-33 Check Yourself 1. What is the difference between manufacturer, private/label, and generic brands? 2. What is co-branding? 3. What are some advantages and disadvantages of brand extensions?

34. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-34 Packaging What other packaging do you as a consumer find useful?

35. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-35 Chianti that comes in wicker-clad bottles and tortillas that come in zip lock bags are examples of brand _____________ that differentiate these companies’ products from their competitors’ offerings. A. names B. slogans C. symbols D. characters E. packaging

36. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-36 Product Labeling

37. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-37 Glossary A brand association reflects the mental links that consumers make between a brand and its key product attributes, such as a logo, slogan, or famous personality. Return to slide

38. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-38 Glossary Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold. Return to slide

39. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-39 Glossary Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service. Return to slide

40. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-40 Glossary A brand extension refers to the use of the same brand name for new products being introduced to the same or new markets. Return to slide

41. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-41 Glossary Brand licensing is a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee. Return to slide

42. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-42 Glossary Brand loyalty occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buy from multiple suppliers within the same category. Return to slide

43. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-43 Glossary Brand repositioning or rebranding refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences. Return to slide

44. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-44 Glossary Co-branding is the practice of marketing two or more brands together, on the same package or promotion. Return to slide

45. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-45 Glossary Perceived value of a brand is the relationship between a product or service’s benefits and its cost. Return to slide

46. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-46 Glossary Product assortment or product mix is the complete set of all products offered by a firm. Return to slide

47. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-47 Glossary Product lines are groups of associated items, such as items that consumers use together or think of as part of a group of similar products. Return to slide

48. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 10-48 Glossary Product mix or product assortment is the complete set of all products offered by a firm. Return to slide