Product Strategies & Branding

Product

It is the sum of the physical, psychological and sociological satisfactions the buyer derives from purchase, ownership and consumption

Product Definition – impact on firm

The survival, profitability and long-run growth of the firm depends on how the product is defined: Tangible Product

Extended Product Generic Product

Classification of Consumer Goods

Characteristics & Marketing Considerations

Convenience Shopping Specialty

Consumer time & effort

Very little Considerable Cannot generalize

Planning time Very little considerable Considerable

How soon want is satisfied after it arises

Immediately Relatively long time Relatively long time

Are price and quality compared?

No Yes No

Price Usually low High High

Frequency of purchase

Usually frequent Infrequent Infrequent

Importance Unimportant Often very important

Cannot generalize

Product Strategies

Individual Product Strategies Product Line Strategies Product Mix Strategies

Product Scope Strategies

Product Adoption and Diffusion• Diffusion process describes the adoption of an innovation over time.

Individual Product Strategies

Innovators2.5%

•Venturesome, highly educated, use multiple information sources

Early Adopters13.5%

Leaders in social setting, slightly above-average education

Early Majority

34%

Deliberate, many informal social contacts

Late Majority34%

Skeptical, below average social status

Laggards16%

Fear of debt, neighbors & friends are information sources

Product Life Cycle

Individual Product Strategies

Awareness & trial Primary demand

& secondary demand

Price Skimming or penetration

Build consumer preference for brand

Distribution expands

CA emphasized in communication strategies

Incentives to consumers

New uses for the product

Continually introduce new & improved versions

MaintainingHarvestingDeleting

Product Mix & Product Line, Width & Depth - KRAFT

Country time lemonadeCrystal LightKool-AidSugar free Kool-AidTang

Entenmann’sHostess SnacksKrema CandyOrowheat

Alpha BitsFruit & FiberGrape NutsHoneycombPebblesPost 40% Bran FlakesPost Raisin BranPost ToastiesSmurf Berry Crunch

BeveragesBaked GoodsBreakfast Cereals

Width of Product Mix

Depth

of P

roduct Lin

e

Increasing product line Downward – stretch Upward – stretch Two-way stretch Line filling

Decreasing product line

Product Line Strategies

Strategic alternatives Objective: Growth Add or delete product lines Synergy between new and existing product lines Assess risk & evaluate profit potential

Product Mix Strategies

Branding

A distinguishing name and/ or symbol (such as logo, trademark, or package design) intended to identify the goods or services of either one seller or a group of sellers, and to differentiate those goods or services from those of competitors.

A brand thus signals to the customer the source of the product, and protects both the customer and the producer from competitors who would attempt to provide products that appear to be identical.”

(Aaker,

1991:7)

Branding

Factors Contributing to the Strength of a Brand

Product Quality when products do what they do very wellConsistent advertising and other marketing communications in which brands tell their story often and well.Distribution intensity whereby customers see the brand wherever they shop.Brand personality where the brand stands for something.

Branding Strategies

Several taxonomies presented for classifying brand strategies:

Olins Classification

Corporate identities only or monolithic Corporate name with a subsidiary name Endorsed

Branding Strategies

Several taxonomies presented for classifying brand strategies:

Laforet & Saunders Classification

Corporate Branding – could be monolithic (Yamaha) or endorsed (Nestle)

Mixed Branding – could be endorsed or dual brands House of Brands or Branded

Brand Equity

Marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name.

(Aaker, 1991)

Brand Equity

Perspectives of Brand Equity Customer Perspective (such as attitudes,

image, awareness, knowledge) Corporate Perspective (such as price, market

share, revenue, cash flows)

Brand Equity

Keller further divides the customer based brand Equity into Brand Awareness and Brand Image

Brand Awareness

Brand recognition & Brand recall

Brand Equity

Brand Image

A set of perceptions in the consumer’s mind about the brand as reflected by the brand associations

(Keller, 1993)

Brand Equity Model - Aaker

Brand EquityName

Symbol

Brand Loyalty

Name Awareness

Perceived Quality

Brand Associations

Market Behavior

Provides value to customer by enhancing customer’s:• Interpretation/ processing of information• Confidence in the purchase decision.•Use satisfaction

Provides value to firm by enhancing:• Efficiency & effectiveness of marketing programs• Brand Loyalty• Price/ margins• Brand extensions• Competitive advantage