Post on 27-Dec-2015
transcript
Product Positioning, Branding, and Product-
Line Strategies
Chapter Chapter SevenSeven
MMarket-Basedarket-Based Management, 4Management, 4thth editionedition
7-2
Product Positioning, Product Positioning, Branding, and Product Line Branding, and Product Line
StrategiesStrategiesChapter Seven
– Product Positioning and Product Positioning Strategies
– Product Differentiation
– Brand Name, Brand Equity, and Branding Strategies
– Product Line Expansion
7-3
Product PositioningProduct Positioning
• What is product positioning?
• Why is it important to determine a product positioning strategy?
• What is the goal of a positioning strategy?
• How does the positioning strategy affect market share?
Market Share = X
Marketing Efforts
Product Position
7-4
Product Positioning StrategiesProduct Positioning Strategies
7-5
Product Positioning Strategies Product Positioning Strategies
• Price Leadership vs. Product Differentiation
• When is price leadership appropriate?
• When is differentiation appropriate?
• Types of Differentiation
Brand Benefits
Service Benefits
Product Benefits
Trans-action Costs
Price
Customer Value
Brand Differentiation
Service Differentiation
Product Differentiation
7-6
DifferentiationDifferentiationDimensions of Product QualityDimensions of Product Quality
11. Quality Killers
4. Quality Aesthetics3. Quality Enhancers
2. Quality Drivers
Reliability
Conformance
Performance
Durability
Features
Serviceability
Appearance
Reputation
7-7
DifferentiationDifferentiationDimensions of Service QualityDimensions of Service Quality
1. Quality Killers
4. Quality Aesthetics
3. Quality Enhancers
2. Quality Drivers
Reliability
Assurance
Performance
Responsiveness
Extended Services
Customer Empathy
Appearance
Reputation
7-8
Brand DifferentiationBrand Differentiation
• What is brand identity?• How do firms develop
brand identity?• What is brand encoding?
• What is the importance/value of a brand name? (enhance positioning and differential advantage)
– Rational vs. Emotional
• How are products positioned with brand differentiation?
(Marriot, Kellogg, Hitachi)
• What are brand extensions? (Coca-Cola)
– Flanker vs. Umbrella
7-9
Brand Encoding StrategiesBrand Encoding Strategies
• Company and Brand Name • Brand and Sub-Brand Name• Company and Product Name• Company, Brand, and Product Name• Company Name, Brand Name, and Number• Brand Name and Benefit• Brand Name Only
7-10
Brand Name DevelopmentBrand Name Development
• Four ways in which new brand names are created:1. Functional or
Descriptive Names
2. Invented Names
3. Experiential Names
4. Evocative Names
Customer Problem
Company/Product Solution
Customer Benefits
Descriptive Words
Brand Name Candidates
Brand Name Tests
7-11
Brand Assets and LiabilitiesBrand Assets and Liabilities
• Brand Liabilities:
– Customer Dissatisfaction
– Environmental Problems
– Product or Service Failures
– Lawsuits and Boycotts
– Questionable Business Practices
• Brand Assets:
– Brand Awareness
– Market Leadership
– Reputation for Quality
– Brand Relevance
– Brand Loyalty
How are Brand Assets and Liabilities Measured?
7-12
Brand EquityBrand Equity
7-13
Broad Vs. Narrow Product LineBroad Vs. Narrow Product Line
7-14
Product Line Development Product Line Development
• How do firms expand their product line?
– Flanker Brands
– Umbrella Brands
– New Brands
• How do flanker brands benefit from umbrella brands?
– Brand Awareness
– Known Quality
– Market Reach
– Product Mix
7-15
Product Line Extensions and Product Line Extensions and EnhancementsEnhancements
• Vertical Brand-Line Extensions• Horizontal Brand-Line Extensions• New Product-Market Brand Extensions• Co-Branding
• Product Bundling• Product Unbundling• Effects of all product-line enhancements
– Scale– Substitution
7-16
TakeawaysTakeaways//ReviewReview
• Product Positioning
• Product Differentiation
– Quality – Service– Brand
• Brand Encoding Strategies
• Brand Name Development
• Brand Equity
• Product Line Enhancements
• Effects of Enhancing Product Line
7-17
Marketing Performance ToolsMarketing Performance Tools
Impact of Product Line Substitution
Price Core Brand Flanker A Flanker B
$3.49
$2.99 Core Brand Multi-Grain Reduced Fat
$1.49
$0.99
$0.49
$0.00
Product Line
7-18
Marketing Performance ToolsMarketing Performance Tools
Impact of Product Line Substitution
From - To Core Brand Flanker A Flanker B
Umbrella X 0.1 0.25
Flanker A 0.05 X 0.2
Flanker B 0.1 0.05 X
7-19
Marketing Performance ToolsMarketing Performance Tools
Impact of Product Line Scale Effects
Area of Core Multi- Reduced Product
Performance Brand Grain Fat Line
Volume
Primary Demand 50,000,000 10,000,000 20,000,000 80,000,000
Core Brand 32,500,000 5,000,000 12,500,000
Multi-Grain 500,000 7,500,000 2,000,000
Reduced Fat 2,000,000 1,000,000 17,000,000
Net Volume 35,000,000 13,500,000 31,500,000 80,000,000
Wholesale Price per Unit $1.95 $1.95 $1.95 $1.95
Sales $68,250,000 $26,325,000 $61,425,000 $156,000,000
Variable Cost per Unit $0.95 $1.00 $1.05 $1.00
Margin per Unit $1.00 $0.95 $0.90 $0.95
Total Contribution $35,000,000 $12,825,000 $28,350,000 $76,175,000
7-20
Marketing Performance ToolsMarketing Performance Tools
Impact of Product Line Scale EffectsArea of Core Multi- Reduced Product
Performance Brand Grain Fat Line
Volume
Primary Demand 50,000,000 20,000,000 10,000,000 80000000
Core Brand 32,500,000 5,000,000 12,500,000
Multi-Grain 500,000 7,500,000 2,000,000
Reduced Fat 2,000,000 1,000,000 17,000,000
Net Volume 35,000,000 13,500,000 31,500,000 80,000,000
Wholesale Price per Unit $1.95 $1.95 $1.95 $1.95
Sales $68,250,000 $26,325,000 $61,425,000 $156,000,000
Variable Cost per Unit $0.95 $1.00 $1.05 $1.00
Margin per Unit $1.00 $0.95 $0.90 $0.95
Total Contribution $35,000,000 $12,825,000 $28,350,000 $76,175,000
Manufacturing Overhead $17,500,000 $6,750,000 $15,750,000 $40,000,000
Gross Profit $17,500,000 $6,075,000 $12,600,000 $36,175,000
Fixed Marketing Expenses $4,375,000 $1,687,500 $3,937,500 $10,000,000
Variable Brand Expenses $3,412,500 $789,750 $1,842,750 $6,045,000
Total Marketing Expenses $7,787,500 $2,477,250 $5,780,250 $16,045,000
Net Marketing Contribution $9,712,500 $3,597,750 $6,819,750 $20,130,000
Marketing ROS 14.2% 13.7% 11.1% 12.9%
Marketing ROI 124.72% 145.23% 117.98% 125.46%
7-21
Marketing Performance ToolsMarketing Performance Tools
Assessing Brand Assets
Brand Assets Below Somewhat About Somewhat Top Brand
Average Below Average Above Performer Asset
0 5 10 15 20 Score
Brand Aw areness 0
Market Leadership 0
Reputation for Quality 0
Brand Relevance 0
Brand Loyalty 0
Total Brand Assets 0
7-22
Marketing Performance ToolsMarketing Performance Tools
Assessing Brand Liabilities
Brand Liabilities Below Somewhat About Somewhat Top Brand
Average Below Average Above Performer Liability
0 5 10 15 20 Score
Customer Dissatisfaction 0
Environmental Problems 0
Product Failures/Recalls 0
Law suits and Boycotts 0
Questionable Practices 0
Total Liabilities Assets 0