MK11 10 9 2013 Chapter 11 Product anything that is of value to a consumer and can be offered through a voluntary marketing exchange Can be goods services places or ideas organizations people communities Complexity and Types of Products Complexity of Products Center of product core customer value defines the basic problem solving benefits that customers are seeking Actual product brand name features design quality level packaging Associated services augmented product nonphysical aspects of the product o Product warranties financing product support after sale service Types of Products Consumer products o Products and services used by people for their personal use o Specialty products services Those for which customers express such a strong preference that they will expand considerable effort to search for the best suppliers o Shopping products o Convenience products o Unsought products Products or services for which consumers will spend a fair amount of time comparing alternatives Those products or services for which consumer is not willing to spend any effort to evaluate prior to purchase Products consumers either do not normally think of buying or do not know about at all Product Mix and Product Line Decisions Product mix the complete set of all products and services offered by a affirm Product lines groups of associated items that consumers tend to use together or think of as part of a group of similar products or services Breadth represents a count of the number of product lines offered by a firm Depth equals the number of products within a product line Increase depth o Add items to address changing consumer preferences or to preempt competitors while boosting sales Decrease depth Decrease breadth o Realigns firm s resources protect brand name o Address changing market conditions or meet internal strategic priorities Increase Breadth o Capture new or evolving markets and increase sales Customers must know about products and brand name Differentiates you from competitors with name URLs logos and symbols characters slogans Branding and jingles sounds Value of Branding for the Customer Brands facilitate purchases o Help consumers make quicker decisions already know quality Brands establish loyalty Brands protect from competition and price competition Brands are assets o Legally protected through trademarks and copyrights Brands impact market value Brand Equity for the Owner Brand equity the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service 4 aspects of brand to determine its equity o Brand awareness measures how many consumers in a market are familiar with the brand and what it stands for and have an opinion about it o Perceived value the relationship between a product s or service s benefits and its cost Often based on competition o Brand associations Reflect the mental links that consumers make between a brand and its key product attributes o Brand loyalty Branding Strategies Brand Ownership Can be owned by any firm in the supply chain Manufacturer brands national brands o Owned and managed by the manufacturer o More control Retailer store brands private label brands Naming Brands and Product Lines Family brands o Products developed by retailers o Some manufacture own products some develop design and contract with manufacturer o When all products are sold under one family brand individual brands benefit from overall brand awareness Individual brands o Individual names for each of its products Brand and Line Extensions Brand extension the use of the same brand name in a different product line o Increase in product mix s breadth Line extension the use of the same brand name within the same product line o Increase in product line s depth Brand dilution core brand is believed to hold Should consider o The brand extension adversely affects consumer perceptions about the attributes the o Fit between product class of core brand and that of extension o Evaluate consumer perceptions of the attributes of the core brand and seek out similar attributes for extension o Refrain from extending the brand name to too many products and product categories o Consider whether the brand extension will be distanced from the core brand Co branding Brand Licensing The practice of marketing two or more brands together on the same package promotion or store o Combining restaurants o Need to make sure they are somewhat related A contractual arrangement between firms whereby one firm allows another to use its brand name logo symbols and or characters in exchange for a negotiated fee Licensor the firm that provides the right to use its brand Licensee obtains right to use brand pays royaltee payments o Movie memorabilia Brand Repositioning o Costly and risky Packaging Brand repositioning rebranding refers to a strategy in which markets change a brand s focus to target new markets or realign the brand s core emphasis with changing market preferences Primary package the one the consumer uses seek convenience in terms of storage use and consumption Secondary package wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners o Find additional information here o Add consumer value by facilitating the convenience of carrying using and storing the product Attracts consumers attention promotional tool Allows for same product to appeal to different markets with different sizes Can redesign to make more ecological wrap rage a great frustration with packaging that makes it seemingly impossible to get at the actual products Secondary packages often have to get packed into bigger boxes for shipping Can help suppliers save costs Can be subtle and reduce amount in pack Product Labeling Identify product and brand Must comply with laws and regulations Communication tool to give consumer s benefits Chapter 13 Service any intangible offering that involves a deed performance or effort that cannot be physically possessed Customer service specifically refers to human or mechanical activities firms undertake to help satisfy their customers needs and wants Services Marketing Differ From Product Marketing Intangible Can t be touch tasted or seen Difficult to convey benefits Must employ symbols and images to promote to potential customers Inseparable Production and Consumption Services are produced and consumed at the same time that is they are inseparable Can t try beforehand can t return High risk