Marketing Exam 2 Review Chapter 11 Product Branding and Packaging Decisions Under Armor expanding the brand to shoes and women s apparel Product can be good service place idea organization person or community Core customer value want customers get out of buying the product o Actual product brand name quality level packaging features design o Associated services financing product warranty product support Types of products consumer o Specialty strong preference ex Specialty bikes o Shopping comparing alternatives ex Cars o Convenience no effort needed to buy it ex Coke o Unsought knowledge do not normally think of buying know about ex GPS Product mix has multiple product lines ex Kelloggs o Breadth of product lines offered ex Cookies and crackers o Depth of products within a product line ex Cheez it and Keebler Depths changing o Increase changing to customer preferences preempt competition by boosting sales ex Bank of American eChecking for online users o Decrease realign the firm s resources unprofitable or low margin products focus marketing efforts on more profitable products ex Tide Basic deleted by P G because of fear that it would undermine its high quality brand with such a low price Breadth changing o Increase adding new product lines to capture new or evolving markets increase sales of existing products ex adding a jam line to boost bread sales o Decrease deleting a product line because of changing market conditions meeting internal strategic priorities Brands add value customers o Brands facilitate purchases certain level of quality and attributes that help customers make quick decisions ex Coke vs Pepsi o Brands establish loyalty trusting the brand and the company ex Amazon s customer service specifically with the stolen PS3 o Brands protect from competition and price competition somewhat protection from price competition ex Lacoste golf shirts have superior quality o Brands are assets trademarks and copyrights ex Tootsie roll and Footsyroll o Brands impact market value earning potential of the brand over the next 12 brand dilution months Brands add value equity for the owner o Brand awareness the more aware customers are of the product the easier the purchase done through publicity and advertising ex Kleenex is a brand of tissue Branding strategies o Perceived value perceived benefit of the product vs its costs ex High end brands at Target for lower costs o Brand associations mental links between a brand and its attributes logos slogans famous personality ex Hallmark slogan and TV channel about caring the very best for someone o Brand loyalty repeatedly buying the same products over and over again rewards for loyal customers ex airline miles low marketing costs to reach loyal customers positive WOM from loyal customers no switch to competition o Brand ownership manufacturer brands Nike or retail private brands Kroger o Naming brands and product lines family brands ex name all products with Kellogg s individual brands ex Kellogg s Cheez its o Brand breadth and line depth extension increasing a products breadth Colgate selling toothbrushes instead of just toothpaste and depth Kellogg s breakfast cereal line sells Eggo Syrup conceptions carry over less money developing combined synergy to increase overall sales Lay s chips and dip watch out for brand dilution o Co branding can enhance quality by signaling unobservable product quality through link between firms and well known quality brand ex Yum brands puts Pizza Hut and Taco Bell together o Brand licensing attracting visibility for the brand and thereby building brand equity while also generating additional revenue ex NFL logos on clothing o Brand repositioning expensive but sometimes necessary with changing times ex Ivory soap Packaging and labeling o Primary one that the consumer uses toothpaste tube o Secondary exterior wrapper or carton that has the UPC code toothpaste box o Strategy to reposition and attract new customers or keep current markets o Wrap rage environmental reasons easily opened o Labels are easy to use as a communication tool Oprah Case Study o Oprah Winfrey brands offers multitudes of fans on self improvement personal growth and destiny o Viewers believe Oprah used to endorse her favorite products o Live her best life through her own brand Chapter 12 Developing New Products Lego developed new product line of storytelling blocks that appealed to girls Why do firms create new products o Changing customer needs create and deliver value ex Frogbox moving boxes o Market saturation without new products the value of the firm will decline ex Revamping of car models each year with new innovations also offers an open for new products to be tested out in saturated markets o Managing risk through diversity spreading out he products in different industries decreases the risk of total loss o Fashion cycles short life cycles of new trendy products o Improving business relationships improve relationships with suppliers Diffusion of innovation o Pioneers completely new market or radically change a market Apple iPod first mover advantage become the most recognizable to customers and greatest market share for a long length of time o High failure rate neglecting testing wrong target poor positioning o Innovators first to buy on the block gain acceptance 2 5 percent of market early adopters purchase product after careful review 13 5 percent of market early majority most crucial to determine if a product succeeds or fails little risk and low costs 34 percent of market late majority last buyers sales level off or decline 34 percent of market laggards avoid change and rely on traditional products 16 percent of market o Firms can predict when certain types of customers will buy their new product or service slowing of process relies on relative advantage the new product has compatibility of consumer features easiness of observability and communication least complex and easiest to try o Idea generation development of new product ideas with internal research and development consortia buying research rights from other firms brainstorming sessions outsourcing to design based firms reverse engineering of competitors products customer input o Concept testing presented to potential buyers or users to obtain their reaction helps firms avoid unnecessary costs of the product o Product development creation of a prototype testing through alpha and beta o Market testing premarket potential customers complete survey about the product
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