ISE Marketing Chapter 11: Managing Successful Products, Services, and Brands

Brand development index (BDI)

(% of a brand's total U.S. sales in a market segment/% of the total U.S. population in a market segment)x100 100+ = good <100 = not so good

Category development index (CDI) formula

(% of a product category's total U.S. sales in a market segment/% of the total U.S. population in a market segment)x100 100+ = good <100 = not so good

Package and label designers face four challenges. They are ...

(1) the continuing need to connect with customers; (2) environmental concerns; (3) health, safety, and security issues; and (4) cost reduction.

Some important aspects of product life cycles are :

(1) their length, (2) the shape of their sales curves, and (3) the difference between product classes and forms.

The Case of Electric-Powered Cars

- About 1.4 percent of cars sold in 2021 were all-electric-powered cars. - Industry analysts cite the usage barrier for disappointing sales. They note that prospective buyers believe these cars are not compatible with existing driving habits, such as driving long distances for vacation or holidays. - Analysts also mention a value barrier. Consumers have not recognized the superiority of all-electric cars that warrant an average price premium of $12,000 over comparably equipped cars with internal combustion engines. - Third, a risk barrier exists due to buyer uncertainty about the actual cost of all-electric-powered car ownership. - According to one auto industry analyst, "The innovators and early adopters have purchased all-electric vehicles, but mainstream consumers have not followed." Not surprisingly, all-electric-powered cars remain in the introductory stage of the product life cycle in the United States, the second-largest car buying country after China. - All-electric cars are forecasted to remain in this stage until 2027 when they are expected to enter the growth stage.

Companies attempt to overcome thee barriers in numerous ways. For example...

- Manufacturers of all-electric-powered cars provide low-cost leasing options to overcome usage, value, and risk barriers. - Other companies provide warranties, money-back guarantees, extensive usage instructions, demonstrations, and free samples to stimulate initial trial of new products. For instance, software developers offer demonstrations downloaded from the Internet. Skin care consumers can browse through the Skin Advisor site at www.olay.com to find out how certain skin care products will look based on a selfie submitted by the consumer. - Free samples are one of the most popular means to gain consumer trial. In fact, 71 percent of consumers consider a sample to be the best way to evaluate a new product.

LO 11-3 Recognize the importance of branding and alternative branding strategies.

A basic decision in marketing products is branding, in which an organization uses a name, phrase, design, symbols, or a combination of these to identify its products and distinguish them from those of its competitors. Product managers recognize that brands offer more than product identification and a means to distinguish their products from competitors. Successful and established brands take on a brand personality and acquire brand equity—the added value a given brand name gives to a product beyond the functional benefits provided— that is crafted and nurtured by marketing programs that forge strong, favorable, and unique consumer associations with a brand. A good brand name should suggest the product benefits, be memorable, fit the company or product image, be free of legal restrictions, and be simple and emotional. Companies can and do employ several different branding strategies. With multiproduct branding, a company uses one name for all its products in a product class. A multibranding strategy involves giving each product a distinct name. A company uses private branding when it manufactures products but sells them under the brand name of a wholesaler or retailer. Finally, a company can employ mixed branding, where it markets products under its own name(s) and that of a reseller

Market modification strategies

A company tries to find new customers, increase a product's use among existing customers, or create new use situations.

mixed branding

A firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market. ***Diverse companies such as Del Monte, Whirlpool, and Dial produce private brands of pet foods, home appliances, and soap, respectively.

Communication Benefits packaging/label

A major benefit of packaging is the label information it conveys to the consumer, such as directions on how, where, and when to use the product and the source and composition of the product, which is needed to satisfy legal requirements of product disclosure. ***For example, the labeling system for packaged and processed foods in the United States provides a uniform format for nutritional and dietary information. Many packaged foods contain informative recipes to promote usage of the product. Campbell Soup estimates that the green bean casserole recipe on its cream of mushroom soup can accounts for $20 million in soup sales each year! Other information consists of seals and symbols, either government-required or commercial seals of approval (such as the Good Housekeeping Seal).

Cost Reduction

About 80 percent of packaging material used in the world consists of paper, plastics, metal, and glass. As the cost of these materials rises, companies are constantly challenged to find innovative ways to cut packaging costs while delivering value to their customers. Many food and personal care companies have replaced bottles and cans with sealed foil packages, such as StarKist's tuna, salmon, and chicken single-serve pouches. Pouches cut packaging costs by 10 to 15 percent

private branding

Also called private labeling, or reseller (store) branding Used when a company manufactures products but sells them under the brand name of a wholesaler or retailer. *** Rayovac, Paragon Trade Brands, and ConAgra Foods are major suppliers of private-label alkaline batteries, diapers, and grocery products, respectively. Costco, Amazon, Walmart, and Kroger are large retailers that have their own brand names. Private branding is popular because it typically produces high profits for manufacturers and resellers. Consumers also buy them. It is estimated that one of every five items purchased at U.S. supermarkets, drugstores, and mass merchandisers bears a private brand.

Label

An integral part of the package and typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients.

The packaging component of a product refers to...

Any container in which it is offered for sale and on which label information is conveyed.

A brand name

Any word, device (design, sound, shape, or color), or combination of these used to distinguish a seller's products or services. Well-known devices used to distinguish brands apart from a name include symbols (the Nike swoosh), logos (the white apple used by Apple), and characters (Charlie the Tuna for StarKist).

selective demand

As more competitors launch their own products and the product progresses along its life cycle, company attention is focused on creating selective demand, the preference for a specific brand.

Finding New Customers examples

As part of its market modification strategy, LEGO Group offers a new line of products to attract consumers outside of its traditional market. Known for its popular line of construction toys for young boys, LEGO Group has introduced a product line for young girls called LEGO Friends. Harley-Davidson has tailored a marketing program to encourage women to take up biking, thus doubling the number of potential customers for its motorcycles.

Environmental Concerns

Because of widespread global concern about the growth of solid waste and the shortage of viable landfill sites, the amount, composition, and disposal of packaging material continue to receive much attention. For example, PepsiCo, Coca-Cola, and Nestlé have decreased the amount of plastic in their beverage bottles to reduce solid waste. Recycling packaging material is another major thrust. Procter & Gamble's Tide Eco-Box has 60 percent less plastic in its packaging, and its Spic and Span liquid cleaner is packaged in 100 percent recycled material. Other firms, such as Walmart, emphasize the use of less packaging material. Over the past decade, the company has worked with its 600,000 global suppliers to reduce overall packaging and shipping material by 5 percent.

Advantages to multiproduct branding

Capitalizing again on brand equity, consumers who have a good experience with the product will transfer this favorable attitude to other items in the product class with the same name. Therefore, this brand strategy makes possible product line extensions, the practice of using a current brand name to enter a new market segment in its product class.

Catching a Rising Trend

Changing consumer trends can also lead to product repositioning. Growing consumer interest in foods that offer health and dietary benefits is an example. Many products have been repositioned to capitalize on this trend. Quaker Oats makes the FDA-approved claim that oatmeal, as part of a low-saturated-fat, low cholesterol diet, may reduce the risk of heart disease. Calcium-enriched products, such as Kraft American cheese and Ben's Original Calcium Plus rice, emphasize healthy bone structure for children and adults. Weight-conscious consumers have embraced low-fat and low-calorie diets in growing numbers. Today, most food and beverage companies offer reduced-fat and low-calorie versions of their products.

Four factors that trigger the need for a repositioning action

Changing the Value Offered Reacting to a Competitor's Position Reaching a New Market Catching a Rising Trend

Maturity Stage

Characterized by a slowing of total industry sales or product class revenue. Also, marginal competitors begin to leave the market. Most consumers who would buy the product are either repeat purchasers of the item or have tried and abandoned it. A major consideration in a company's strategy in this stage is to control overall marketing cost by improving promotional and distribution efficiency.

Growth Stage

Characterized by rapid increases in sales. It is in this stage that competitors appear. The result of more competitors and more aggressive pricing is that profit usually peaks during the growth stage. At this stage, advertising shifts emphasis to stimulating selective demand; product benefits are compared with those of competitors' offerings for the purpose of gaining market share. Changes appear in the product in the growth stage.

The Product Level:

Class and Form

Brand licensing

Contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company (licensee) for a royalty or fee. For example, the National Football League (NFL) and the National Basketball Association (NBA) each earn about $3.5 billion annually by licensing team names and logos for merchandise. The Peanuts brand characters, including Charlie Brown, Snoopy, and Lucy, generate almost $100 million annually in licensing fees. Successful brand licensing requires careful marketing analysis to ensure a proper fit between the licensor's brand and the licensee's products (e.g. not Domino's bubble gum)

The marketing objective for the company at the introduction stage is to...

Create consumer awareness and stimulate trial—the initial purchase of a product by a consumer. Companies often spend heavily on advertising and other promotion tools to build awareness and stimulate product trial among consumers in the introduction stage. Advertising and promotion expenditures in the introduction stage are often made to stimulate primary demand.

A fad product

Experiences rapid sales on introduction and then an equally rapid decline. These products are typically novelties and have a short life cycle. ***They include fidget spinners, car tattoos described as the first removable and reusable graphics for automobiles, and vinyl dresses and fleece bikinis made by a Minnesota clothing company.

Laggards

Fear of debt; neighbors and friends are information sources

Creating a New Use Situation examples

Finding new uses for an existing product has been the strategy behind Gillette, the world leader for men's shaving products. The company now markets its Gillette Body line of razors, blades, and shaving gels for "manscaping"—the art of shaving body hair in areas below the neckline—a new use situation.

Product sales in the growth stage

Grow at an increasing rate because of new people trying or using the product and a growing proportion of repeat purchasers—people who tried the product, were satisfied, and bought again.

Five categories and profiles of product adopters

Innovators Early adopters Early majority Late majority Laggards

Trading up

Involves adding value to the product (or line) through additional features or higher-quality materials. ***Michelin, Bridgestone, and Goodyear have done this with a "run-flat" tire that can travel up to 50 miles at 55 miles per hour after suffering total air loss. Dog food manufacturers, such as Ralston Purina, also have traded up by offering super-premium foods based on "life-stage nutrition." Mass merchandisers, such as Target and Walmart, can trade up by adding a designer clothes section to their product assortment.

Product modification

Involves altering one or more of a product's characteristics, such as its quality, performance, or appearance, to increase the product's value to customers and increase sales. Wrinkle-free and stain-resistant clothing made possible by nanotechnology revolutionized the men's and women's apparel business and stimulated industry sales of casual pants, shirts, and blouses. A common approach to product modification to increase a product's value to consumers is called product bundling—the sale of two or more separate products in one package. **For example, Microsoft Office is sold as a bundle of computer software, including Word, Excel, and PowerPoint. New features, packages, or scents can be used to change a product's characteristics and give the sense of a revised product. ***Procter & Gamble revamped Pantene shampoo and conditioner with a new vitamin formula and relaunched the brand with a multimilliondollar advertising and promotion campaign. The result? Pantene, a brand first introduced in the 1940s, remains a top-selling shampoo and conditioner in the United States in an industry with more than 1,000 competitors.

Trading down

Involves reducing a product's number of features, quality, or price. For example, airlines have added more seats, thus reducing legroom, and limited meal service by offering only snacks on most domestic flights. Trading down also exists when companies engage in shrinkflation or downsizing—reducing the package content without changing package size and maintaining or increasing the package price.

Early adopters

Leaders in social setting; slightly above average education

A fashion product

Life cycles for fashion products frequently appear in women's and men's apparel. Fashion products are introduced, decline, and then seem to return. The length of the cycles may be months, years, or decades. ***For example, Crocs, a clog shoe brand made of plastic resin, was popular in the 2000s, experienced a decline in the 2010s, and resurfaced again as a fashionable item in the early 2020s among a new generation of consumers. ***Women's hosiery is another example. Product sales have been declining for years. Women consider it more fashionable to not wear hosiery—bad news for Hanes brands, the leading marketer of women's sheer hosiery. According to an authority on fashion, "Companies might as well let the fashion cycle take its course and wait for the inevitable return of pantyhose."

LO 11-2 Identify ways that marketing executives manage a product's life cycle.

Marketing executives manage a product's life cycle in three ways. First, they can modify the product itself by altering its characteristics, such as product quality, performance, or appearance. Second, they can modify the market by finding new customers for the product, increasing a product's use among existing customers, or creating a new use situation for the product. Finally, they can reposition the product using any one or a combination of marketing mix elements. Four factors trigger a repositioning action. They include reacting to a competitor's position, reaching a new market, catching a rising trend, and changing the value offered to consumers.

diffusion of innovation

Not all consumers rush to buy a product in the introductory stage, and the shapes of the life-cycle curves indicate that most sales occur after the product has been on the market for some time. In essence, a product diffuses, or spreads, through the population, a concept called the diffusion of innovation.

Introduction stage

Occurs when a product is introduced to its intended target market. Sales grow slowly and profit is minimal. The lack of profit is often the result of large investment costs in product development

A high-learning product

One for which significant customer education is required and there is an extended introductory period Computers had this life-cycle curve. Consumers in the 1980s had to learn the benefits of owning the product or be educated in a new way of performing familiar tasks.

Reacting to a Competitor's Position

One reason to reposition a product is because a competitor's entrenched position is adversely affecting sales and market share. ***New Balance, Inc. successfully repositioned its athletic shoes to focus on fit, durability, and comfort rather than competing head-on against Nike on performance and Adidas on fashion. The company offers an expansive range of shoes and networks with podiatrists, not sports celebrities.

Perceptual Benefits Packaging/Label

Package and label shape, color, and graphics distinguish one brand from another, convey a brand's positioning, and build brand equity. ***According to the director of marketing for L'eggs hosiery, "Packaging is important to the positioning and equity of the L'eggs brand." Why? Packaging and labeling have been shown to enhance brand recognition and facilitate the formation of strong, favorable, and unique brand associations. Successful marketers recognize that changes in packages and labels can update and uphold a brand's image in the customer's mind. Pepsi-Cola has used packaging changes to uphold its image among teens and young adults, introducing new package graphics that change every few weeks to reflect different themes, such as sports, music, fashion, and cars. Because labels list a product's source, brands competing in the global marketplace can benefit from "country of origin or manufacture" perceptions, as described in Chapter 7. Consumers tend to hold stereotypes about country-product pairings that they judge "best"—English tea, French perfume, Italian leather, and Japanese electronics— which can affect a brand's image. Increasingly, Chinese firms are adopting the English language and Roman letters for their brand labels sold in China. This is being done because of a common perception in many Asian countries that "things Western are good."

Connecting with Customers

Packages and labels must be continually updated to connect with customers. The challenge lies in creating aesthetic and functional design features that attract customer attention and deliver customer value in their use. If done right, the rewards can be huge. ***For example, the marketing team responsible for Kleenex tissues converted its standard rectangular box into an oval shape with colorful seasonal graphics. Sales soared with this aesthetic change in packaging. After months of in-home research, Kraft product managers discovered that consumers often transferred Chips Ahoy! cookies to jars for easy access and to avoid staleness. The company solved both problems by creating a patented resealable opening on the top of the bag. The result? Sales of the new package doubled that of the old package.

LO 11-4 Describe the role of packaging and labeling in the marketing of a product.

Packaging and labeling play numerous roles in the marketing of a product. The packaging component of a product refers to any container in which it is offered for sale and on which label information is conveyed. Manufacturers, retailers, and consumers acknowledge that packaging and labeling provide communication, functional, and perceptual benefits. Contemporary packaging and labeling challenges include (1) the continuing need to connect with customers; (2) environmental concerns; (3) health, safety, and security issues; and (4) cost reduction.

Functional Benefits Packaging/Labels

Packaging often plays a functional role—providing storage, convenience, or protection or ensuring product quality. Stackable food containers are one example of how packaging can provide functional benefits. For example, beverage companies have developed lighter and easier ways to stack products on shelves and in refrigerators. ***Examples include Coca-Cola beverage packs designed to fit neatly onto refrigerator shelves and Ocean Spray's rectangular cranberry juice bottles that allow 10 units per package versus 8 of its former round bottles. The convenience dimension of packaging is increasingly important. Kraft Miracle Whip salad dressing, Heinz ketchup, and Skippy Squeez'It peanut butter are sold in squeeze bottles; microwave popcorn is a major market success; and Folgers coffee is packaged in single-serving portions. Nabisco offers portion-control package sizes for the convenience of weight-conscious consumers. It offers 100-calorie packs of Oreos, Cheese Nips, and other products in individual pouches. Consumer protection is another important function of packaging, including the development of tamper-resistant containers. Today, companies commonly use safety seals or pop-tops that reveal previous opening. Consumer protection through labeling exists in "open dating," which states the expected shelf life of the product. Functional features of packaging also can affect product quality. Pringles, with its cylindrical packaging, offers uniform chips, minimal breakage, and for some consumers, a better value than chips packaged in flex-bags.

Introduction stage pricing

Pricing can be either high or low. A high initial price may be used as part of a skimming strategy to help the company recover the costs of development as well as capitalize on the price insensitivity of early buyers. High prices tend to attract competitors eager to enter the market because they see the opportunity for profit. To discourage competitive entry, a company can price low, referred to as penetration pricing. This pricing strategy helps build unit volume, but a company must closely monitor costs.

Deletion

Product deletion, or dropping the product from the company's product line, is the most drastic strategy. Product obsolescence such as CD/DVD players, loss of consumer appeal such as Volkswagen's iconic Beetle model, and eroding or lack of product profit typically trigger this strategy

Increasing a Product's Use examples

Promoting more frequent usage has been a strategy of Campbell Soup Company. Because soup consumption rises in the winter and declines during the summer, the company now advertises more heavily in warm months to encourage consumers to think of soup as more than a cold-weather food. Similarly, the Florida Orange Growers Association advocates drinking orange juice throughout the day rather than for breakfast only.

A low-learning product

Sales for a low-learning product begin immediately because little learning is required by the consumer and the benefits of purchase are readily understood. This product often can be easily imitated by competitors, so the marketing strategy is to broaden distribution quickly. In this way, as competitors rapidly enter, most retail outlets already have the innovator's product. It is also important to have the manufacturing capacity to meet demand. A successful low-learning product is Gillette's Fusion razor. This product achieved $1 billion in worldwide sales in less than three years and remains among the best-selling razors in the world.

Maturity stage sales

Sales increase at a decreasing rate in the maturity stage as fewer new buyers enter the market. Profit declines due to fierce price competition among many sellers, and the cost of gaining new buyers at this stage rises.

Late majority

Skeptical; below average social status

The product manager

Sometimes called a brand manager, manages the marketing efforts for a close-knit family of products or brands. The product manager style of marketing organization is used by consumer goods firms. Responsible for managing existing products through the stages of the life cycle. Some are also responsible for developing new products. Product managers' marketing responsibilities include developing and executing a marketing program for the product line described in an annual marketing plan and approving ad copy, media selection, and package design. Engage in extensive data analysis related to their products and brands. Sales, market share, and profit trends are closely monitored. Managers often supplement these data with two measures: (1) a category development index (CDI) and (2) a brand development index (BDI). These indexes help identify strong and weak market segments (usually demographic or geographic segments) for specific consumer products and brands and provide direction for marketing efforts. The calculation, visual display, and interpretation of these two indexes for Hawaiian Punch are described in the Applying Marketing Metrics box

Decline Stage

The decline stage occurs when sales drop. Frequently because of environmental changes. Tend to consume a disproportionate share of management and financial resources relative to their future worth. A company will follow one of two strategies to handle a declining product: deletion or harvesting

Six criteria are mentioned most often when selecting a good brand name

The name should suggest the product benefits (e.g. easy off) The name should be memorable, distinctive, and positive The name should fit the company or product image The name should have no legal or regulatory restrictions The name should be simple and emotional The name should have favorable phonetic and semantic associations in other languages

LO 11-1 Explain the product life-cycle concept.

The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline. Product sales growth and profitability differ at each stage, and marketing managers have marketing objectives and marketing mix strategies unique to each stage based on consumer behavior and competitive factors. In the introductory stage, the need is to establish primary demand, whereas the growth stage requires selective demand strategies. In the maturity stage, the need is to maintain market share; the decline stage necessitates a deletion or harvesting strategy. Some important aspects of product life cycles are (a) their length, (b) the shape of the sales curves, and (c) the rate at which consumers adopt products

generalized life cycle

The product life-cycle sales curve, not all have same shape though

Brand purpose

The reason why a brand exists, the place it has in consumers' lives, the solution it provides to consumers, and the brand's role in making society better off. Brand purpose focuses on a brand's underlying values and beliefs and its identity and meaning.

Shape of the Life-Cycle Curve

There are several life-cycle curves, each type suggesting different marketing strategies. , there are several life-cycle curves, each type suggesting different marketing strategies. Figure 11-3 shows the shape of life-cycle sales curves for four different types of products: high-learning, low-learning, fashion, and fad products

Length of the Product Life Cycle

There is no set time that it takes a product to move through its life cycle. As a rule, consumer products have shorter life cycles than business products. ***For example, many new consumer food products such as Frito-Lay's Baked Lay's potato chips move from the introduction stage to maturity in 18 months. The availability of mass communication vehicles informs consumers quickly and shortens life cycles. Technological change shortens product life cycles as new-product innovation replaces existing products. For instance, smartphones have largely replaced digital cameras in the amateur photography market

Health, Safety, and Security Issues

Today, most consumers believe companies should make sure products and their packages are safe and secure, regardless of the cost, and companies are responding in numerous ways. ***Most butane lighters sold today, like those made by Scripto, contain a child-resistant safety latch to prevent misuse and accidental fire. Childproof caps on pharmaceutical products and household cleaners and sealed lids on food packages are now common. New packaging technology and materials that extend a product's shelf life (the time a product can be stored) and prevent spoilage continue to be developed.

Changing the Value Offered

Trading up Trading down

Common reasons for resisting a product in the introduction stage are:

Usage barriers (the product is not compatible with existing habits) Value barriers (the product provides no incentive to change), Risk barriers (physical, economic, or social) Psychological barriers (cultural differences or image).

Innovators

Venturesome; higher educated; use multiple information sources

Reaching a New Market

When Unilever introduced iced tea in Britain, sales were disappointing. British consumers viewed it as leftover hot tea, not suitable for drinking. The company made its tea carbonated and repositioned it as a cold soft drink to compete as a carbonated beverage, and sales improved. Johnson & Johnson effectively repositioned its St. Joseph aspirin from a product for infants to an adult low-strength aspirin to reduce the risk of heart problems or strokes.

Harvesting

When a company retains the product but reduces marketing costs. The product continues to be offered, but salespeople do not allocate time in selling and limited, if any, advertising dollars are spent to support it. The purpose of harvesting is to maintain the ability to meet customer requests and promote goodwill. ***Coca-Cola sold Tab, its first diet cola introduced in 1963, to a small group of die-hard fans called "Tabaholics" long after Diet Coke replaced it in 1982 and became the company's flagship diet cola. Tab had received no marketing support since 2008 and was finally deleted in 2021 after being harvested for almost 40 years. According to a company official, "We wanted to make sure those who wanted Tab got Tab. It shows we cared."

multiproduct branding

a company uses one name for all its products in a product class. This approach is sometimes called family branding or corporate branding when the company's name is used. ***For example, Microsoft, Samsung, Gerber, and Sony engage in corporate branding—the company's trade name and brand name are identical. Church & Dwight uses the Arm & Hammer family brand name for all its products featuring baking soda as the primary ingredient.

brand personality

a set of human characteristics associated with a brand name. Research shows that consumers assign personality traits to products—traditional, romantic, rugged, sophisticated, rebellious—and choose brands that are consistent with their own or desired self-image.

To help differentiate a company's brand from competitors, ... bonus***Changes in fax machines included

an improved version or new features are added to the original design and product proliferation occurs. (1) models with built-in telephones; (2) models that used plain, rather than thermal, paper for copies; and (3) models that integrated e-mail.

branding

an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors.

Consumers may benefit most from ________.

branding Recognizing competing products by distinct trademarks allows them to be more efficient shoppers. Consumers can recognize and avoid products with which they are dissatisfied, while becoming loyal to other, more satisfying brands. As discussed in Chapter 5, brand loyalty often eases consumers' decision making by eliminating the need for an external search.

In the growth stage, it is important to ... for the product. In the retail store, for example, this often means that...

broaden distribution competing companies fight for display and shelf space.

Product repositioning

changes the place a product occupies in a consumer's mind relative to competitive products. A firm can reposition a product by changing one or more of the four marketing mix elements.

Gaining distribution can be a challenge because...

channel intermediaries may be hesitant to carry a new product. Also, a company often restricts the number of variations of the product to ensure control of product quality. As an example, the original Gatorade came in only one flavor—lemon-lime

Some multiproduct branding companies employ subbranding, which ...

combines a corporate or family brand with a new brand, to distinguish a part of its product line from others. ***Consider American Express. It has applied subbranding with its American Express Green, Gold, Platinum, Blue, and Centurion black charge cards, with unique service offerings for each. Similarly, Porsche successfully markets its higher-end Porsche Carrera and its lower-end Porsche Boxster

shrinkflation

decreasing product quantity/size while maintaining or increasing price

Early majority

deliberate, many informal social contacts

Product life cycle

describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

For successful products, the ratio of repeat to trial purchases ...

grows as the product moves through the life cycle. Durable fax machines meant that replacement purchases were rare. However, it became common for more than one machine to populate a business as the machine's use became more widespread.

Marketing attention in the maturity stage is often directed toward ...

holding market share through further product differentiation and finding new buyers and uses. ***For example, Gillette modified its Fusion shaving system with the addition of Fusion ProGlide, a five-blade shaver with an additional blade on the back for trimming. Fax machine manufacturers developed Internet-enabled multifunctional models with new features such as scanning, copying, and color reproduction. They also designed fax machines suitable for small and home businesses, which today represent a substantial portion of sales.

Trademark

identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, thereby preventing others from using it. ***For example, Coca-Cola and Procter & Gamble have trademarked hashtags (#) that make reference to their brands. In the United States, trademarks are registered with the U.S. Patent and Trademark Office and protected under the Lanham Act. A well-known trademark can help a company advertise its offerings to customers and develop their brand loyalty. Consider Kylie and Kendall Jenner, cast members of the former television show Keeping Up with the Kardashians. They filed to have their first names trademarked for use in "entertainment, fashion, and pop culture." Their filing was withdrawn after entertainer Kylie Minogue objected to the use of her name.

For any product to be successful, it must be purchased by ...

innovators and early adopters. This is why manufacturers of new pharmaceuticals try to gain adoption by respected hospitals, clinics, and physicians. Once accepted by innovators and early adopters, successful new products move on to the early majority, late majority, and laggard categories.

Three ways to manage a product through its life cycle:

modifying the product, modifying the market, and repositioning the product.

Companies can choose from among several different branding strategies, including...

multiproduct branding multibranding private branding mixed branding

Product form

pertains to variations of a product within the product class. ***For prerecorded music, product form exists in the technology used to provide the music, such as cassette tapes, compact discs, and digital music downloading and streaming

Product class

refers to the entire product category or industry, such as prerecorded music.

Campbell Soup Company employs a multiproduct branding strategy with soup line extensions. It offers regular Campbell's soup, home-cooking style, and chunky varieties and more than 100 soup flavors. This strategy can result in lower advertising and promotion costs because the same name is used on all products, thus raising the level of brand awareness. A risk with line extension is that ... Line extensions work best when ...

sales of an extension may come at the expense of other items in the company's product line. they provide incremental company revenue by taking sales away from competing brands or attracting new buyers

brand equity 2 distinct advantages:

the added value a brand name gives to a product beyond the functional benefits provided. First, brand equity provides a competitive advantage. The Sunkist brand implies quality fruit. The Disney name defines children's entertainment. A second advantage is that consumers are often willing to pay a higher price for a product with brand equity. Brand equity, in this instance, is represented by the premium a consumer will pay for one brand over another when the functional benefits provided are identical. ***Gillette razors and blades, Bose audio systems, Duracell batteries, Cartier jewelry, and Reebok fitness clothing and footwear all enjoy a price premium arising from brand equity. Brand equity doesn't just happen. It is carefully crafted and nurtured by marketing programs that forge strong, favorable, and unique customer associations and experiences with a brand. Brand equity resides in the minds of consumers and results from what they have learned, felt, seen, and heard about a brand over time. Companies today seek to create and sustain brand equity by communicating and acting upon the purpose of a brand.

primary demand

the desire for the product class rather than for a specific brand, since there are few competitors with the same product

To a great extent, the customer's first exposure to a product is ..., and both are an ....

the package and label expensive and important part of marketing strategy

A strong brand equity also allows for brand extension:

the practice of using a current brand name to enter a different product class. ***For instance, equity in the Huggies family brand name has allowed Kimberly-Clark to successfully extend its name to a full line of baby and toddler toiletries. This brand extension strategy generates $500 million in annual sales globally for the company. Honda's established name for motor vehicles has extended easily to snowblowers, lawn mowers, snowmobiles, and business jets. But there are limits as evidenced by the case of Coca-Cola Energy. Coca-Cola's strong brand equity in carbonated soft drinks didn't transfer to energy drinks. Why? Consumers didn't perceive a fit like they did with Huggies and Honda. Coca-Cola Energy came and went in two years.2

Brand equity four steps

∙ The first step is to develop positive brand awareness and an association of the brand in consumers' minds with a product class or need to give the brand an identity. Gatorade and Kleenex have achieved this in the sports drink and facial tissue product classes, respectively. ∙ Next, a marketer must establish a brand's meaning in the minds of consumers. Meaning arises from what a brand stands for and has two dimensions—a functional, performance-related dimension and an abstract, imagery-related dimension. Nike and Reebok have done this through continuous product development and improvement and their links to peak athletic performance in their marketing communications. ∙ The third step is to elicit the proper consumer responses to a brand's identity and meaning. Here attention is placed on how consumers think and feel about a brand. Thinking focuses on a brand's perceived quality, credibility, and superiority relative to other brands. Feeling relates to the consumer's emotional reaction to a brand. Michelin elicits both responses for its tires. Not only is Michelin thought of as a credible and superior-quality brand, but consumers also acknowledge a warm and secure feeling of safety, comfort, and self-assurance without worry or concern about the brand. ∙ The final, and most difficult, step is to create a consumer-brand connection evident in an intense, active loyalty relationship between consumers and the brand. A deep psychological bond characterizes a consumer-brand connection and the personal identification customers have with the brand. Brands that have achieved this status include Harley-Davidson and Apple