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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 0 in Chapter 11
Chapter 11
Sett ing Product and
B rand StrategyPowerPoint by Karen E. James
Louisiana State University - Shreveport
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 1 in Chapter 11
Objectives
Identify the various characteristics ofproducts.
Learn how companies build and manageproduct lines and mixes.
Understand how companies make better
brand decisions.
Comprehend how packaging andlabeling can be used as marketing tools.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 2 in Chapter 11
What is a Product?
Goods
Services
Experiences
Events
Persons
Places
Properties
Organizations
Information
Ideas
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 3 in Chapter 11
The Product and Product Mix
Potential customers judge product
offerings according to three
elements:
Product features and qual ity
Services m ix and qual i tyValue-based prices
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 4 in Chapter 11
The Product and Product Mix
The customer value hierarchy:
Core benefi t
Basic product
Expected product
Augmented product
Potent ial produ ct
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2003 Prentice Hall, Inc. Potential product
Augmented product
Expected
Product
Basic Product.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 5 in Chapter 11
Core
Benefit
Five levels of a product.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 6 in Chapter 11
The Product and Product Mix
Product
Classifications
Durabi l ity and
tangibi l i ty
Consumer goods
Industr ial goods
Nondurable
Tangible
Rapid ly consum ed
Example: Milk
Durable
Tangible
Lasts a long t ime
Example: Oven
Services
Intangible
Example: Tax p reparat ion
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 7 in Chapter 11
The Product and Product Mix
Product
Classifications
Durabi l ity and
tangibi l i ty
Consumer goods
Industr ial goods
Classified by
shopping habits:
Convenience
goods
Shopp ing goods
Special ty goods
Unsought goods
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2003 Prentice Hall, Inc.
Convenience goods and staples:
Convenience goods are products that consumerspurchase frequently with minimum effort, such assoft drinks ,snacks ,tobacco and chocolates. Sincethese are frequently purchased with little effort they
must be readily available throughout the marketarea. Thus convenience goods are serviced only bythe primary trade areas.In India the trade area for
convenience stores is found to be 1-3 kms.
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2003 Prentice Hall, Inc.
Convenience goods-staples.
Staples are that type of convenience goods that are purchasedregularly on a routine basis.eg: fmcg,rice,coffee,tea,sugar etc.
Since these items require little prepurchase planning and is
available in many markets the customers are mainly from theprimary trade areas and a little bit from the secondary areas
as well .In India the convenience and staples are mainlyprovided by the discount stores and kiranas and the trade areais found to be between 1 to 5 km,though not necessarilyconcentric.
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2003 Prentice Hall, Inc.
Shopping goods:
Shopping goods are mainly life style products that appealto a certain group of customers. Women's and men'sapparels,acessories, jewellery,smaller electronic goods etcfall in this category. Because customers are willing to
spend time searching for this item, the stores that carrythem have relatively large trade areas. These goods aremainly available at specialty stores and the trade areas inIndia are found to be between 1-20 km.
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2003 Prentice Hall, Inc.
Speciality Goods:
Speciality goods are items with unique characteristics anddemand substantial prepurchase planning. Major householdappliances,furniture,cars,purchasing a residence etc are someexamples.These items require the most extensive of purchaseplanning before a decision can be taken.Thus stores offeringthese items,mainly speciality stores ,have the
Largest trade areas .In India the extent has been found to be aslarge as 45 km and it is around 60 km in the U.S. and Europe.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 12 in Chapter 11
The Product and Product Mix
Product
Classifications
Durabi l ity and
tangibi l i ty
Consumer goods
Industr ial goods
Materials and parts
Farm produ cts
Natural p roduc ts
Component mater ials Component par ts
Capital items
Instal lat ions
Equipment
Supplies and businessservices
Maintenance and repair
Advisory serv ices
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2003 Prentice Hall, Inc.
Product Hierarchy
Need family.. Health and hygiene
Product Family..Personal care products. Product Class..Facial care ,hair care ,skin care
Product LineShampoos,creams,soaps,cosmetics
Product type..with conditioner,anti-dandruf, normal ,dry,
damaged hair recovery.
Brand..Sunsilk,Dove,Ponds
Item: Sunsilk,Dry-hair shampoo, 200 gms pack(SKU).
To accompanyA Framework for Marketing Management, 2ndEdition Slide 13 in Chapter 11
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 14 in Chapter 11
The Product and Product Mix
Product mix dimensions:
Width:number of product l inesLength:total number of i tems in m ix
Depth:number of produc t var iants
Consistency:degree to whichproduc t l ines are related
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 15 in Chapter 11
Product-Line Decisions
Product-Line Analysis
Product-Line Length
Product-Line Modernization,
Featuring, and Pruning
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 16 in Chapter 11
Brand Decisions
The AMA definition of a brand:
A name, term, sign, symbol, ordesign , or a combinat ion o f these,
intended to ident i fy the goods or
serv ices of one sel ler o r g roup of
sel lers and to d if ferent iate them
from the competition.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 17 in Chapter 11
Brand Decisions
Brands can convey six levels of
meaning:
Att r ibutes
Benef i ts
Values
Culture
Personal i ty
User
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 18 in Chapter 11
Brand Decisions
Brand identity decisions include:
Name
Logo
Colors
Tagline
Symbol Consumerexperiences create brand
bonding, brand advertising does not.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 19 in Chapter 11
Brand Decisions
Marketers should attempt to create or
facilitate awareness, acceptabi l i ty,
preference, and loyaltyamongconsumers.
Valuable and powerful brands enjoy
high levels of brand loyalty.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 20 in Chapter 11
Brand Decisions
Aaker identified five levels of
customer attitudes toward brands:
Wil l change brands, especial ly for pr ice.
No b rand loyal ty .
Satisf ied -- has no reason to change.
Sat isf ied -- sw itching wou ld incur cos ts.
Values brand , sees it as a friend .
Devo ted to the brand .
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 21 in Chapter 11
Brand Decisions
Brand equ i tyrefers to the positive
differential effect that a brand name
has on customers.
Brand equity:
is related to many facto rs.
al low s for reduced market ing costs .
is a major con tr ibu tor to custom er equi ty .
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 22 in Chapter 11
Brand Decisions
Key Challenges
To brand o r not
Brand sponso r
Brand name
Brand s trategy
Brand repos i t ion ing
Advantages ofbranding:
Facil i t ates orderprocessing
Trademark protect ion
Aids in segmentat ion
Enhances co rporate
image
Branded goods are
desired by retai lers
and dist r ibutors
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 23 in Chapter 11
Brand Decisions
Key Challenges
To brand o r not
Brand sponso r
Brand name
Brand s trategy
Brand repos i t ion ing
Options include:
Manufacturer
(nat ional) brand Distr ibutor
(reseller, sto re,
house, pr ivate)
brand Licens ing the
brand name
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 24 in Chapter 11
Brand Decisions
Key Challenges
To brand o r not
Brand sponso r
Brand name
Brand s trategy
Brand repos i t ion ing
Strong brand names:
Suggest benefi ts
Suggest produ ctqual i t ies
Are easy to say,
recognize, and
remember
Are dist inct ive
Should not carry poor
meanings in other
languages
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 25 in Chapter 11
Brand Decisions
Key Challenges
To brand o r not
Brand sponso r
Brand name
Brand s trategy
Brand repos i t ion ing
Varies by type of brand
Funct ional brands
Image brands
Exper ient ia l brands
Line extensions
Brand extensions
Multibrands
New brands
Co-branding
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 26 in Chapter 11
Brand Decisions
Key Challenges
To brand o r not
Brand sponso r
Brand name
Brand s trategy
Brand repos i t ion ing
A brand repo rt cardcan be used to audita brands strengths
and weaknesses.
Changes inpreferences or the
presence of a newcompetitor mayindicate a need forbrand repositioning.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 27 in Chapter 11
Packaging and Labeling
Packaging includes:
The pr im ary package
The secondary package
The sh ipping package
Many factors have influenced theincreased use of packaging as amarketing tool.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 28 in Chapter 11
Packaging and Labeling
Developing an effective package:
Determ ine the packaging concept
Determ ine key package elements
Test ing:
Engineering tests
Visual tests
Dealer tests
Consumer tests
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 29 in Chapter 11
Packaging and Labeling
Labeling functions:
Ident i f ies the product or b rand
May ident i fy produc t grade
May descr ibe the produc t
May promote the product
Legal restrictions impactpackaging for many products.