Marketing: Chapter 8 (Test 2)

Brand name selection

desirable qualities for a brand name include: 1. should suggest something about the product's benefits and qualities ex- LeanCuisine 2. easy to pronounce, recognize and remember ex-iPad 3. distinctive brand name ex- Panera, Zappos 4. it should be extendable ex-Amazon.com began as an online bookseller but chose a name that would allow expansion into other categories 5. translate easily into foreign languages 6. capable of registration and legal protection *today's style is build brands around names that have real meaning ex- Silk, Blackboard

Marketing strategies for service firms

-just like manufacturing businesses. good service firms use marketing to position themselves strongly in a chosen target ex- Fedex "faster, farther" -because services differ from tangible products, they require additional marketing approaches 1. the service profit chain 2. managing service differentiation 3. managing service quality 4. managing service productivity

Service intangibility

-services cannot be seen, tasted, felt, heard, or smelled before they are bought ex- people undergoing cosmetic surgery cannot see the result before the purchase -to reduce uncertainty, buyers look for signals of service quality (draw conclusions about quality from the place, people, price, equipment and communications that they can see)

Product mix consistency

how closely related the various product lines are in end use, production requirements, distribution channels -ex Campbell Soup Company's product lines are consistent insofar as they are consumer products and go through the same distribution channels *less consistent as they perform different functions for buyers

The service profit chain definition

the chain that links service firm profits with employee and customer satisfaction; consists of 5 links 1. internal service quality- superior employee selection and training, a quality work environment, and strong support for those dealing with customers which results in.. 2. satisfied and productive service employees-more satisfied, loyal and hardworking employees which results in.. 3. greater service value-more effective and efficient customer value creation and service delivery, which results in.. 4. satisfied and loyal customers- satisfied customers who remain loyal, make repeat purchases and refer other customers, which result in.. 5. healthy service profits and growth- superior service firm performance

Product mix width

the number of different product lines the company carries

Product mix depth

the number of versions offered for each product in the line -ex- Campbell's soups come in 7 varieties (condensed soups, chunky soups, healthy request soups etc)

Brand valuation

the process of estimating the total financial value of a brand

Product and service decision

marketers make product and service decisions at 3 levels: 1. product/service decisions 2. product line decisions 3. product mix decisions

Product mix length

the total number of items a company carries within its product lines ex- Campbell's simple meal= many brands included (Wolfgang Puck soups and broths, Prego tomato sauce, Swanson broths)

Interactive marketing

training service employees in the fine art of interacting with customers to satisfy their needs

Convenience product

-Customer buying behavior: frequent purchase, little planning, little comparison or shopping effort, low customer involvement -Price: low price -Distribution: widespread distribution, convenient locations -Promotion: mass promotion by the producer -Examples: toothpaste, magazines, laundry detergent

Shopping product

-Customer buying behavior: less frequent purchase, much planning and shopping effort, comparison of brands, price, quality and style -Price: higher price -Distribution: selective distribution in fewer outlets -Promotion: advertising and personal selling by both the producer and resellers -Examples: major appliances, televisions, furniture, clothing

Unsought product

-Customer buying behavior: little product awareness or knowledge (or, if aware, little or even negative interest) -Price: varies -Distribution: varies -Promotion: aggressive advertising and personal selling by producer and resellers -Examples: life insurance and red cross blood donations

Specialty product

-Customer buying behavior: strong brand preference and loyalty, special purchase effort, little comparisons of brands, low price sensitivity -Price: high price -Distribution: exclusive distribution in only one or a few outlets per market area -Promotion: more carefully targeted promotion by both the producer and resellers -Examples: luxury goods, such as Rolex watches or fine crystal

Industrial product

-a product bought by individuals and organizations for further processing or for use in conducting a business -distinction between consumer and industrial product is based on the PURPOSE for which the product is purchased -ex- consumer buys a lawn mower for use around home= consumer product. consumer buys a lawn mower for use in a landscaping business=industrial product -3 groups of industrial products and services

Product

-anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need -broadly defined products also include service, events persons place organizations ideas or a mixture of these

2. Increase the quantity of their service by giving up some quality--avoid

-attempts to streamline a service or cut costs can make a service company more efficient in the short run, but can reduce its longer-run ability to innovate, maintain service quality or respond to consumer needs and desires -ex- airlines- passengers encounter "time-saving" check in kiosks rather than personal counter service, stopped offering in flight snacks. As a result--> resentful passengers. In their attempts to improve productivity, these airlines have mangled customer service

Managing brands

-brand's positioning must be continuously communicated to consumers--advertising campaigns create name recognition, brand knowledge and brand preference -brands are not maintained by advertising but by CUSTOMER'S BRAND EXPERIENCE- customers come to know a brand through a wide range of contacts and touch points (advertising, word of mouth, social networks, company web pages and apps)--company must put as much care into managing these touch points and it does into producing its ads -company needs to train its people to be customer centered, carry on internal brand building -periodically audit their brands' strengths and weaknesses

Branding

-brand: a name, term, sign, symbol or design or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors -consumers view brand as an important part of a product and can add value to a customer's purchase -customers attach meaning to brands and develop brand relationships -advantages: 1. the seller's brand name and trademark provide legal protection for unique product features that otherwise might be copied 2. helps the seller segment markets

Brand equity

-brands are a key element in the company's relationships with customers. Brands represent consumers' perceptions and feelings about a product and its performance--exists in the heads of consumers -(def): the differential effect that knowing the brand name has on customer response to the product or its marketing. A measure of the brand's ability to capture consumer preference and loyalty --->positive brand equity- consumers react more favorably to it than to a generic or unbranded version of the same product --->negative brand equity-consumers react less favorably than to an unbranded version

Licensing

-companies license names or symbols previously created -by other manufactures, names of well-known celebrities or characters from popular movies and books -name and character licensing has grown rapidly in recent years -Disney, the world's biggest licensor

New brands

-company may believe that the power of its existing brand name is waning so a new brand name is needed -company may create a new brand name when it enters a new product category for which none of its current brand names are appropriate ex Toyota created the separate Lexus brand aimed at luxury car consumers -drawbacks- result in a company spreading its resources too thin, concern that there are too many brands with too few differences between them--->megabrand strategies

Consistency

-conformance quality- freedom from defects and CONSISTENCY in delivering a targeted level performance *** A toyota can have just as much quality as a Rolls-Royce. Although toyota doesnt perform at the same level as Rolls-Royce, it can just as consistently deliver the quality that customers pay for and expect

Product support services

-customer service is another element of product strategy -first step-design support services to survey customers periodically to assess the value of current services and obtain ideas for new ones -next- company can take steps to fix problems and add new services that will both delight customers and yield profits to the company

Line extensions

-extending an existing brand name to new forms, colors, sizes, ingredients or flavors of an existing brand category ex- Cheerios-->Honey Nut, Frosted, Banana Nut, Yogurt Burst -low-cost, low-risk way to introduce new products -meet consumer desires for variety, use excess capacity, command more shelf space from resellers -risks= consumer confusion *works best when it takes sales away from competing brands not when it "cannibalizes" the company's other items

Brand extensions

-extending an existing brand name to new product categories ex- Kellogg's--> extended its Special K cereal brand into a full line of cereals plus lines of crackers, fruit crisps, snack and nutrition bars, protein waters ex -gives a new product instant recognition and faster acceptance -risks= extension may confuse the image of the main brand, if brand extension fails it may harm consumer attitudes toward other products carrying the same brand, a brand may not be appropriate to a particular new product ex- flying on Hooters air, wearing Evian water-filled padded bra

Product features

-features are a competitive tool for differentiating the company;s product from competitors' products. -being the first product to introduce a valued new feature is one of the most effective ways to compete -companies should periodically survey buyers who have used the product in order to identify new features and decide which ones to add its its product

Organizations, persons, places and ideas

-in addition to tangible products and services, marketers have broadened the concept of a product to include other market offerings: organizations, persons, places, ideas

Company's market offering

-includes both tangible goods and service -today, many companies are moving to a new level in creating value fro their customers. To differentiate their offers, beyond simply making products and delivering services, they are creating and managing customer experiences with their brands or companies -instead of buying just the product customers are really buying what they do for them

Capital items

-industrial products that aid in the buyer's production or operations, including installations and accessory equipment. -installations- consist of major purchases like buildings (factories, offices) and fixed equipment (generators, drill presses, large computer systems and elevators) -accessory equipment- portable factory equipment and tools (hand tools, lift trucks) and office equipment (computers, fax machines, desks) *shorter lifespan than installations and simply aid in the production process

Labeling

-labels range from simple tags attached to products to complex graphics that are part of the packaging -the label identifies the product or brand -describes several things about the product- who made it, where it was made, when, its contents, how it is to be used, how to use it safely -promotes the brand, support its positioning, connects with customers, adds personality to the brand (ex Pepsi recently introduced a new more uplifting smiling logo red white and blue- feels like the same Pepsi we know but more adventurous and youthful)

Brand positioning

-marketers need to position their brands clearly in target customers' minds; can position the brand in 3 ways 1. product attributes (lowest level) ex- Pampers- fluid absorption, fit and disposability. *competitors can easily copy attributes, customers more interested in what the attributes will do for them not what they are 2. product benefits-ex FedEx (guaranteed on time delivery), Nike (performance), Walmart (low prices) 3. beliefs and values- engaging customers on a deep, emotional level ex- Pampers "where we grow together" brand concerned about happy babies, parent-child relationships and total baby care **brands should strive to become lovemarks, products or services that inspire loyalty beyond reason

Managing service quality

-most service industries have now joined the customer-driven quality movement -service providers need to identify what target customers expect in regard to service quality -customer retention= the best measure of quality; a service firm's ability to hang onto its customers depends on how consistently it delivers value to them -top service companies set high service-quality standards and strive for 100 percent defect-free service -service quality will allows vary, depending on the interactions between employees and customers -good service recovery: can turn angry customers into loyal ones, good recovery can win more customer purchasing and loyalty than if things had gone well in the first place (ex burnt steak, late delivery) -social media such as Facebook and Twitter can help companies to root out and remedy customer dissatisfaction with service

National brands vs store brands

-national brands (manufactures' brands) have long dominated the retail scene, Samsung and Kellogg sell their output under their own brand names ex- Samsung Galaxy, Kellogg's Frosted Flakes -store brand (private brand)- a brand created and owned by a reseller of a product or service --now growing much faster than national brands -->once known as generic or no name brands, todays store brands are shedding their image as cheap knockoffs of national brands -->retailers like Target and Trader Joe's are out-innovating many of their national brand competitors

Co-branding

-occurs when 2 established brand names of different companies are used on the same product -because each brand dominates in a different category, the combined brands create broader consumer appeal and broader brand equity ex: Pillsbury and Cinnabon joined forces to create Pillsbury Cinnabon cinnamon rolls -co-branding can take advantage of the complementary strengths of 2 brands ex- Tim Hortons- Cold Stone Creamery Shops (Tim Horton coffee--peaks morning mid day, Cold stone--peaks afternoon and evening) -co-branding allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone ex- Nike and Apple co-branded Nike+iPod Sport Kit -limitations- complex legal contracts, must carefully coordinate their advertising, sales promotion, trust is necessary

Internal marketing

-orienting and motivating customer-contact employees and supporting service employees to work as a team to provide customer satisfaction -marketers must get everyone in the organization to be customer center. in fact, internal marketing must precede external marketing

People

-person marketing- activities undertaken to create, maintain or change attitudes or behavior toward particular people (people ranging from presidents, entertainers, sports figures, doctors, lawyers). -these people use person marketing to build up their reputations -businesses, charities and other organizations use well-known personalities to help sell their products or causes ex- Nike is represented by Kobe Byrant, Serena Williams etc

Place

-place marketing- activities undertaken to create, maintain or chance attitudes or behavior toward particular places -cities, states, regions and even entire nations compete to attract tourists, new residents, conventions, company offices and factories ex- New York advertises "I <3 NY"

Product line decisions

-product line: a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets or fall within a given price range ex- Nike produces several lines of athletic shoes and apparel -major product decision= PRODUCT LINE LENGTH: the number of items in the product line -->line is too short if the manager can increase profits by dropping items --> line is too long if the manager can increase profits by dropping items

Product mix decisions

-product mix (product portfolio): the set of all product lines and items that a particular seller offers for sale -ex- Campbell Soup Company's product mix= healthy beverages, baked snacks, simple meals with several sublines of each mix (simple meals= soups, sauces, pastas) -a company's product mix has 4 dimensions 1. width 2. length 3. depth 4. consistency

Materials and parts

-raw materials -->farm products-wheat, cotton, livestock, fruits, vegetables --> natural products- fish, lumber, iron ore -manufactured materials and parts -->component materials- iron, yarn, cement, wires -->component parts- small motors, tires, castings **most manufactured materials and parts are sold directly to industrial users **price and service are the major marketing factors, branding and advertising tend to be less important

Food and Drug Administration (FDA)

-regulate the use of health related terms such as low fat, light and high fiber

Service inseparability

-services are produced and consumed at the same time and cannot be separated by their providers -provider-customer interaction- both the provider and customer affect the service outcome

Service marketing

-services now account for close to 65 percent of the US GDP -governments- offer services through courts, employment services, military services, police and fire departments, postal service and schools -private non profit organizations- offer services through museums, charities, churches, colleges, foundations, hospitals -business organizations- offer services through airlines, hotels, banks, insurance companies, real estate firms etc -4 service characteristics 1. service intangibility 2. service inseparability 3. service variability 4. service perishability

Managing service differentiation

-solution to price competition is to develop a differentiated: 1. offer- can include innovative features that set one company's offer apart from competitors' offers ex- Dick's sporting goods- customers can sample shoes on Dick's indoor footwear track, test gold clubs with an on-site golf swing analyzer etc 2. delivery-service companies can have more able and reliable customer-contact people, developing a superior physical environment in which the service product is delivered -ex- many grocery chains offer online shopping and home delivery, most banks allow you to access your bank account info from anywhere- ATM to mobile device 3. image- differentiate their images through symbols and branding ex- Allstate's "good hands" memorable and approachable

Product style and design

-style simply describes the appearance of a product. can be eye catching or yawn producing. may grab attention and produce pleasing aesthetics but it does not necessarily make the product perform better -design is more than skin deep- it goes to the very heart of a product. good design contributes to a product's usefulness as well as to its looks

Supplies and servies

-supplies -->operating supplies (lubricants, coal, paper, pencils) -->repair and maintenance items (paint, nails, brooms) **the convenience products of the industrial field because they are usually purchased with a minimum effort or comparison -business services --> maintenance and repair services (window cleaning, computer repair) -->business advisory services (legal management consulting, advertising)

Packaging

-the activities of designing and producing the container or wrapper for a product -packages must perform many sales tasks- attracting buyers, communicating brand positioning, closing the sale -packages can cause headaches--> hard to open (DVDS), overpackaging (incredible amount of waste, frustrates people who care about the environment)

Product quality

-the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs -Total Quality Management (TQM): all of the company's people are involved in constantly improving the quality of products, services, and business processing, freedom of defects -Return on quality approach: viewing quality as an investment and holding quality efforts accountable for bottom-line results -Product quality has 2 dimensions 1. level 2. consistency

Service variability

-the quality of services may vary greatly depending on who provides them and when, where and how they are provided -ex- Marriot hotels have the reputation for providing better service than others, but where employee may be energetic and cheerful another can be grumpy and slow

Managing service productivity

-with their costs rising rapidly, service firs are under great pressure to increase service productivity, can do this in several ways 1. train current employees better or hire new ones who will work harder or more skillfully 2. increase the quantity of their service by giving up some quality 3. service provider can harness the power of technology **must be careful not to take the service out of service in attempt to improve service productivity

Product and service classification

1. consumer products 2. industrial products 3. organizations, persons, places and ideas

Measuring brand strength

1. differentiation- what makes the brand stand out 2. relevance-how consumers feel it meets their needs 3. knowledge-how much consumers know about the brand 4. esteem-how highly consumers regard and respect the brand *brands with strong brand equity rate high on all 4 dimensions

3 groups of industrial products and services

1. materials and parts 2. capital items 3. supplies and services

Brand sponsorship

1. national brands vs store brands 2. licensing 3. co-branding

High brand equity competitive advantages

1. powerful brand enjoys a high level of consumer brand awareness and loyalty 2. because consumers expect stores to carry a particular brand- company has more leverage in bargaining with resellers 3. because brand name carries high credibility, the company can easily launch line and brand extensions 4. offers the company defense against fierce price competition 5. forms the basis for building strong and profitable customer relationships-->customer equity

A company can expand its product line in 2 ways pg 236

1. product line filling- adding more items within the present range of line. reasons- reach extra profits, satisfy dealers, use excess capacity, leading the full-line company, pulling holes to keep out competitors *overdone if it results in cannibalizations and customer confusion--the company should ensure that new items are noticeably different from existing ones 2. product line stretching- when a company lengthens its product line beyond its current rand. can stretch its line downward, upward or both ways. -companies located at the upper end of the market can stretch their lines downward--->plug a market hole that would otherwise attract new competitors. add low-end products because it finds faster growth taking place in the low-end segments -companies stretching upward--->add prestige to their current products or may be attracted by a faster growth rate or higher margins and the higher end

Labeling has been affected by...

1. unit pricing- stating the price per unit of a standard measure 2. open dating- stating the expected shelf life of product 3. nutritional labeling- stating the nutritional values in the product

Levels of product and services

3 levels (each level adds more customer value) 1. core customer value- addresses the question "what is the buyer really buying" when designing products, marketers must first define the core, problem-solving benefits or services that consumers seek 2. actual product- need to develop product and services features, a design, a quality level, a brand name and packaging 3. augmented product

Multibrands

Companies often market many different brands in a given product category ex- Pepsico markets of soft drinks (Pepsi, Sierra Mist, Mountain Dew), sports and energy drinks (Gatorade, Propel, No Fear), bottled teas and coffee (Lipton, Starbucks Tazo), bottled water (Aquafina, SoBe), fruit drinks (Tropicana, Ocean Spray)-each brand includes a long list of sub brands -multibranding offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space, capture a larger market share ex-although PepsiCo's many brands of beverages compete with one another on supermarket shelves, the combined brand reap a much greater overall market share than any single brand ever could -drawbacks=each brand might obtain only a small market share and none may be very profitable, company can end up spending its resources over many brands instead of building a few brands to a highly profitable level

Product attributes

Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by 1. product quality 2. product features 3. product style and design

Augmented product

Non-physical attributes of an augmented product may include a product warranty, service or installation, and may increase the price of the basic product being purchased, and allow the company selling the good to provide the consumer with other services that may make using the product easier.

Megabrand strategies

P&G, PepsiCo, Kraft and other large consumer-product marketers -weeding out weaker or slower-growing brands and focusing their marketing dollars on brands that can achieve the number 1 or 2 market share position with good growth prospects in their categories

Product decisions

There are important decisions that need to be made in the development and marketing of individual products and services. Decisions about 1. product attributes 2. branding 3. packaging 4. labeling 5. product support services

Service

a activity, benefit or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything

Brand development

a company has 4 choices when it comes to developing brands 1. line extensions 2. brand extensions 3. multibrands 4. new brands

Consumer product

a product bought by final consumers for personal consumption, include: -convenience products -shopping products -specialty products -unsought products

Battle of the brands

between national and private brands PRIVATE BRANDS -control what products they stock, where they go on shelf, what prices they charge, which one they will feature in local promotions -although store brands can be hard to establish and costly to stock and promote, they yield higher profit margins for the reseller. -give resellers exclusive products that cannot be bought from competitors, resulting in store traffic and loyalty NATIONAL BRANDS -national brands must sharpen their value propositions, especially when appealing to today's more frugal consumers -many national brands are fighting back by rolling out with more discounts and coupons to defend their market share -in the long-run must compete by investing in new brands, new features and quality improvements to set them apart -design strong advertising programs to maintain high awareness and preference -find ways to partner with major distributors to find distribution economies and improve joint performance

Organizations

carry out activities to "sell" the organization itself 1. Organization marketing-activities undertaken to create, maintain or change the attitudes and behavior of target consumers toward and organization -ex: IBM's Smarter Planet campaign markets IBM as a company that helps improve the world's IQ. An ad tells how IBM technologies are helping create safer food supply chains "Food is now followed from farm to fork" 2. corporate image marketing- used by business firms, campaigns to market themselves and polish their images

Federal Trade Commission Act of 1914

false, misleading, or deceptive labels or packages constitute unfair competition

The service profit chain background

in a service business, the customer and the front line service employee interact to co-create the service. effective interaction, in turn, depends on the skills of the front line service employee and on the support processes backed by these employees; thus successful service companies focus their attention on both their customers and employees

Level

in developing a product, the marketer must first choose a quality level that will support the product's positioning. Here, product quality means PERFORMANCE QUALITY- the products ability to perform its functions **companies choose a quality level that matches target market needs and the quality level of competing products (rarely offer the highest possible performance quality level-few customers want or can afford this)

Building strong brands

major brand strategy decisions: 1. brand positioning 2. brand name selection 3. brand sponsorship 4. brand development

BMW example of stretching product line in both directions

over the past decade BMW went from a one-brand, five-model carmaker into a powerhouse of 3 brands, 14 "series" and 30 distinct models -downward--Mini Cooper and its compact 1-series models -upward- Rolls-Royce -filled the gaps in between with 6-series coup, X-series cross overs and sports activity vehicles and M-series high performance models -next up-- a growing selection of hybrids and all-electric cars ***BMW has boosted its appeal to the rich, super-rich and the wannabe-rich, all without departing from its pure premium positioning

The Nutritional Labeling and Educational Act of 1990

requires sellers to provide detailed nutritional information on food products

Service perishability

services cannot be stored for later sale or use

Ideas

social marketing- (defined by the SMI-Social Marketing Institute) the use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of society ex- The Ad Council of America has developed dozens of social advertising campaigns involving issues such as health care, education, environmental stability, human rights, personal safety ***SMI encourages the use of broad range or marketing tools- social marketing goes well beyond the promotional 'P' of the marketing mix to include every other element to achieve its social change objectives