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Prepared for:IBM Program – UC

PRODUCT AND BRANDING STRATEGY

Marketing Process

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Component of Marketing Offering

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Value-based price

Product features & quality

Services mix & quality

Attractivenessof the market

offering

PRODUCT

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Prod. Characteristic & Classification

Product levels: Customer value hierarchy

Service/benefit customers are really buying

Turn the core benefit into the basic product

Customers’ expectation for a specific product

Exceeding customers’ expectationOn a specific product

All possible augmentation and transformation the prod offering might undergo in the future

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Product classifications Durability Tangibility User

Consumer-Good Industrial-Good

Prod. Characteristic & Classification

Product Classification [1] Durability & Tangibility Classification:

Nondurable goods Tangible goods normally consumed in one or a few uses. Ex. Beverage

Durable goods Tangible goods normally survive many uses, and require

more personal selling and service. Ex. Clothe

Services (intangible) Intangible, variable, and perishable products. Ex. Hair dresser

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Product Classification [2] User

Consumer-Goods Classification Convenience goods

Purchase frequently, immediately, with a minimum of effort (e.g. beverage)

Shopping goodsComparing the alternatives based on suitability, quality, price, and style (e.g. clothe)

Specialty goodsUnique characteristics or brand identification for which many buyers is willing to make a special purchasing effort (e.g. car – Mercedez)

Unsought goodsBuyers don’t know about or don’t normally think of buying (e.g. coffin)

Differentiation Being different to attract people’s attention

Product Design Service

Form: size, shape (e.g. cleo)

Feature

Performance quality

Durability

Reliability

Reparability

Product return (e.g. US and European market)

Ordering (e.g. online)Delivery (e.g. domino pizza)

Installation (e.g. IKEA)

Maintenance & repair

Customer training (e.g. GE)

Customer consulting

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Product System & Mix Product mix has a certain:

Width How many different product lines the firm carries

Length Total number of items in the mix

Depth How many variants are offered of each product in the line

Consistency How closely related the various product lines are in end use,

production requirements, distribution channels, or some other ways

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Table 14.1: Product-Mix Width and Product-Line Length for Procter& Gamble Products

Product-Line Length

Product-Mix Width

Detergents ToothpasteDisposable Bar Soap Diapers

Paper Tissue

Ivory Snow (1930)

Dreft (1933)

Tide (1946)

Cheer (1950)

Gleem (1952)

Crest (1955)

Ivory (1879)

Kirk’s (1885)

Lava (1893)

Camay (1926)

Pampers (1961)

Luvs (1976)

Charmin (1928)

Puffs (1960)

Banner (1982)

Summit (1992)

Width = 5 Product Line

Depth = 2

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Product-Line Length Line Stretching

Downmarket Stretch Strong growth opportunities as mass retailers attract a growing

number of shoppers Tie up lower-end competitors who might otherwise try to move

upmarket Find that the middle market is stagnating or declining

Upmarket Stretch Enter the high end of the market for more growth, higher

margins, or position themselves as full-line manufacturers. Two-Way Stretch

Serving the middle market might decide to stretch their line in both directions

e.g. Loreal Maybelline; Teh Botol Sosro Ice Tea)

SERVICE

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Categories of Service Mix Pure tangible good

Tooth paste, soap Tangible good with accompanying service

Toyota Hybrid

Café / restaurant Major service with accompanying minor goods and

services Singapore airlines

Pure service Massage, beauty salon

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Characteristic of Service Intangibility Inseparability Variability Perishability

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Determination of Service Quality Reliability

Firm’s consistency and dependability in service performance

Responsiveness Firm’s commitment to provide its services in a timely

manner Assurance

Firm’s competence, courtesy to its customers, and security of its operations

Empathy Firm’s ability to put itself in its customer’s place

Tangibles Firm’s ability to manage its tangibles

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BRAND

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BRAND The benefit??? Control people’s mind easily to attract

charging higher price Easy to penetrate the market for new

product (under the same brand) To identify our self from others Property Right (intellectual property)

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Brand Decisions

Building brand identity Building brand identity requires additional

decisions on the brand’s name, logo, colors, tagline, and symbol

Brand equity The positive differential effect that knowing the

brand name has on customer response to the product or service

Customer shows a preference for one product over another when they’re basically identical

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Value of Brand Equity Competitive advantages of high brand

equity: The company will have more leverage in bargaining

with distributors and retailers because customers expect them to carry the brand.

The company can charge a higher price than its competitors because the brand has higher perceived quality.

The company can more easily launch extensions because the brand name carries high credibility.

The brand offers some defense against price competition.

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Branding Decision: To Brand or Not to Brand?

Branding Challenges

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Advantages Brand name makes it easier for the seller to process

orders and track down problems Seller’s brand name and trademark provide legal

protection of unique product features Branding gives the seller the opportunity to attract a loyal

and profitable set of customers Branding helps the seller segment markets Strong brands help build corporate image, making it

easier to launch new brands and gain acceptance by distributors and consumers

Brand Element Choice Criteria Memorable Meaningful Likable Transferable

not carry poor meanings in other countries and languages e.g. SBY berBoedi (Javanese sees it not wise enough; Sumatera

Selatanese means liar)

Adaptable Protectable

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Branding Strategy Develop new brand elements for the new

product Apply some of its existing brand elements Combine the new brand with existing

brand elements

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Brand-Sponsor Decisions

Manufacturer brand

e.g. BASF

Distributor brand

e.g. Acer

Licensed brand name

e.g. Stationery Mickey Mouse, Barbie; Apparel Playboy

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Branding Decisions

Four available strategies Individual names

The firm doesn’t tie its reputation to the product (e.g. Paperline, Mirage, Big Boss, Sinar Dunia manufactured by Tjiwi Kimia)

Blanket family names No need for “name” research or large advertising cost to create

brand-name recognition (e.g. Heinz, ABC) Separate family names for all products

When a firm produces quite different products (e.g. Ace Hardware, Krisbow, Index)

Corporate name combined with individual product names

e.g.,Honda Jazz, Honda CRV

From STP

Segment-by-segment invasion plan

Intersegment cooperation

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Selecting & Evaluating Market Segment

M1 M2 M3

P1

P2

P3

M1 M2 M3

P1

P2

P3

Single-segment concentration

Selective specialization

Product specialization

M1 M2 M3

P1

P2

P3

M1 M2 M3

P1

P2

P3

M1 M2 M3

P1

P2

P3

Market specialization

Full-market Coverage

GAP Inc. Gap Gap Outlet GapKids babyGap GapBody GapMaternity Love (Gap

Accessories) Old Navy Old Navy Outlet Banana Republic Banana Republic

Factory Store Forth & Towne Piperlime 29

Upscale:

Banana Republic

Mid-market: GAP

Budget-priced:

Old Navy and

Forth & Towne

Telkomsel VS Indosat

Pasca bayar: Halo Pra bayar:

AS Simpati

Internet: Telkom Flash

Pasca bayar: Matrix Pra bayar:

IM3 Mentari

Internet: IM2

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Coca-Cola Co. VS Pepsi Co. Coca Cola

Diet Coke Cherry Coke Coca Cola Zero

Sprite Fanta

(strawberry, orange)

Pepsi Cola Diet Pepsi Pepsi Wild Cherry Pepsi One

7 UP Miranda

(strawberry, orange)

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