Product, Services, and Branding Strategies

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Product, Services, and Branding Strategies

• Marketing Management

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Cosmetics Industry

• Cosmetics companies sell billions of dollars
  worth of products
• Consumers buy more than just a particular smell

• The promise, image, company, name, package, and
  ingredients are all part of the product, as are
  the stores where it is sold.

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Definition

• Product
• Anything offered to a market for attention,
  acquisition, consumption or use that might
  satisfy a need or want.

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Definition

• Service
• Any activity or benefit that one party can offer
  to another that is essentially intangible and
  does not result in the ownership of anything.

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What is a Product?

• Products, Services, Experiences
• Market offerings, pure tangible goods, pure
  services, experiences

Experiences include zoos and aquariums
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Three Levels of Product
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What is a Product?

• Product and service classifications fall into two
  broad classes based on the types of buyers who
  use them
• Consumer products
• Industrial products

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What is a Product?

• Product and Service Classifications
• Industrial products are those purchased for use
  in conducting a business or those purchased as
  ingredients or components to be used in
  manufacturing.
• Materials and parts
• Capital items
• Supplies and services

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Industrial products also include business
services, such as landscaping, technology, food
services, or custodial.
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What is a Product?

• Product and Service Classifications
• Products also include organizations, persons,
  places, and ideas
• Organizational marketing makes use of
  corporate image advertising
• Person marketing applies to political
  candidates, entertainment sports figures, and
  professionals
• Place marketing relates to tourism
• Social marketing campaigns promote ideas

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Product Service Decisions

• Product attributes
• Quality, features, style and design
• Branding
• Packaging
• Labeling
• Product support services

Key Decisions

• Individual Product
• Product Line
• Product Mix

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Individual Product and Service Decisions
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Product Service Decisions

• Innovative product design can help revitalize a
  company, such as with the Apple iMac.

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Product Service Decisions

• Brand
• A name, term, sign, symbol, design, or a
  combination of these, that identifies the maker
  or sellers of a product or service.

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Product Service Decisions

• Packaging involves designing a container or
  wrapper for a product

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Product Service Decisions

• Many aspects of a food products label are
  dictated by law

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Product Service Decisions

• Product line length
• Line stretching adding products that are higher
  or lower priced than the existing line
• Upwards
• Downwards
• Two-way
• Line filling adding more items within the
  present price range

Key Decisions

• Individual Product
• Product Line
• Product Mix

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Product Line Decisions

• How many products in the line?
• How should products be targeted and
  differentiated?
• How should resources be allocated?

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Product Line Decisions

• Upwards
• Reasons?
• Risks?
• Downwards
• Reasons?
• Risks?
• Cannibalization

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Product Service Decisions

• Product mix width
• Number of different product lines carried by
  company
• Product line depth
• Number of different versions of each product in
  the line
• Product mix consistency

Key Decisions

• Individual Product
• Product Line
• Product Mix (Assortment)

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Branding Strategy

• Brands are powerful assets that must be
  carefully developed and managed.
• Both Tiger Woods and Nike can be considered
  brands

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Branding Strategy

• Brands with strong equity have many competitive
  advantages
• High consumer awareness
• Strong brand loyalty
• Helps when introducing new products
• Less susceptible to price competition

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Major Brand Strategy Decisions
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Brand Strategy

• Three levels of positioning
• Product attributes
• Least effective
• Benefits
• Beliefs and values
• Taps into emotions

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

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Brand Strategy

• Good Brand Names
• Suggest something about the product or its
  benefits
• Are easy to say, recognize and remember
• Are distinctive
• Are extendable
• Translate well into other languages
• Can be registered and legally protected

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

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Brand Strategy

• Manufacturer brands

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

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Brand Strategy

• Private (store) brands
• Costly to establish and promote
• Higher profit margins

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

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Brand Strategy

• Licensed brands
• Name and character licensing has grown

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

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Brand Strategy

• Co-branding
• Advantages
• Broader consumer appeal
• Greater brand equity
• Efficient means of expansion into new product
  categories
• Limitations
• Complex legal contracts
• Requires careful coordination of IMC
• Requires that partners trust one another

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

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Brand Strategy

• Line extensions
• Minor changes to existing products
• Brand extensions
• Successful brand names help introduce new
  products
• Multibrands
• Multiple product entries in a product category
• New brands
• New product category

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

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Brand DevelopmentStrategies
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Brand Equity
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Notion of Brand Equity

• Brand equity is the set of brand assets and
  liabilities linked to a brand, its name and
  symbol, that add to or subtract from the value
  provided by a product or service to the firm and
  the firms customers.

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Sources of Brand Equity

• Brand awareness
• Depth (likelihood to be recognized/recalled)
• Breadth (variety of consumption situations)
• Brand Image
• Strength
• Favorability
• Uniqueness of brand associations

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Benefits of Brand Equity

• Greater loyalty
• Less vulnerable to competitive actions
• Less vulnerable to marketing crises
• Larger margins
• Less price sensitivity
• Greater trade cooperation
• Increased communication effectiveness
• Licensing opportunities
• Brand extension opportunities

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Assessing Brand Equity

• Financial-market methods (e.g., Interbrand)
• Dollar metric
• Balanced scorecard - YR BrandAsset Valuator
• Knowledge (how familiar?)
• Esteem (your personal regard)
• Relevance (how relevant is the brand?)
• Differentiation (difference from other brands)

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Brand Extensions Types

• Same product, different form
• Distinctive taste/ingredient/component
• Companion products
• Same customer franchise
• Expertise
• Attribute/benefit(s)/lifestyle owned or
  reflected by core brand
• Designer image/status

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Brand Extensions Advantages

• Instant recognition
• Facilitate new product acceptance
• Reduce perceived risk
• Increase odds of gaining distribution
• Reduce marketing costs
• Increase efficiency of promotional expenditures
• Provide feedback benefits to parent brand
• Enhance brand image
• Revitalize brand
• Bring new customers to brand franchise

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Brand Extensions Disadvantages

• Confuse customer
• Hurt parent brand image
• Dilute brand meaning
• Forgo chance to develop a successful new brand

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Conditions for extension to work

• Consumers have some awareness of and positive
  associations about parent brand
• At least some of these will be evoked by brand
  extension (fit)
• Negative associations are not transferred from
  parent brand
• Negative associations are not created by brand
  extension

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Brand Strategy
Line Extensions May Feature Different Things

• Flavors
• Colors

• Forms
• Ingredients

• Package Sizes

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Services Marketing

• Services
• Account for 86 of Hong Kongs GDP
• Service industries include business
  organizations, government, and private
  not-for-profit organizations.

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Four Services Characteristics
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Three Types of Marketing in Services Industries

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Services Marketing

• Service Firm Marketing Strategies
• The Service-Profit Chain
• Internal Marketing service firms train and
  effectively motivate their employees to work
  as a team to satisfy the customer
• Interactive Marketing recognizes that service
  quality depends heavily on the quality of
  buyer-seller interaction

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Services Marketing

• Service Firm Marketing Strategies
• Managing Service Differentiation

British Airways differentiates its service by
offering first-class world travelers private
demi-cabins
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Services Marketing

• Service Firm Marketing Strategies
• Managing Service Quality
• One method of differentiation
• Customer retention is often the best measure
• Top service firms are customer obsessed
• Service recovery and employment empowerment
  are key
• Managing Service Productivity
• Many methods of enhancing productivity
• Key is to avoid reducing quality